There are already many companies in the energy storage space. Energy Max sees this as vindication that the market for energy storage solutions exists.
Tesla
Tesla is a well-known brand worldwide with a strong image for innovation and a famous CEO in Elon Musk. Despite being most well-known as an electric car company, they are aggressively pursuing the battery energy storage market. They have two product offerings for different market applications: the Powerwall for distributed and “front-of-the-meter” markets, and the Powerpack for utility-scale, “behind-the-meter” markets. They are well funded, have a strong partner network in the United States, and already have pilot projects with a number of strong customers.
They have a large project underway in California, which will be the largest lithium-ion energy storage project in the world when completed. Additionally, they have pilot projects with Amazon Web Services to aid in powering data centers, and the large U.S. retailer
Target.33 Also important to note is Tesla’s partnership with Green Mountain Power (GMP) in
‧
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Vermont. GMP is a utility who is helping distribute the Powerwall product to customers as well as offering payment plans.
An important aspect of Tesla’s strategy is to become a vertically integrated energy supplier.
They recently completed a $2.6 billion USD acquisition of solar energy installer SolarCity.34 They are one of the few energy storage companies who manufacture their own inverters, which also helps bring down pack costs. They are building a huge factory in Nevada known as the Gigafactory in order to build lithium-ion battery cells and packs in partnership with Panasonic. Tesla has stated that the Gigafactory itself will reach full capacity in 2018 and have a greater capacity than all other lithium batteries than were produced in the rest of the entire world in 2013. This aggressive move in taking advantage of economies of scale will certainly drive down battery pack costs. The cost of battery packs is generally proprietary information held by manufacturers, but Musk has stated he believes the price of a Li-ion battery from the Gigafactory could reach $100 per kWh by 2020.35 There are also reports of current battery prices below $190 per kWh for Tesla.36 These are definitely some of the lowest Li-ion manufacturing costs in the market.
Tesla is relatively well spread out geographically, and enjoys a strong retail footprint
advantage due to its electric car business. In a shareholder letter the company stated in Q1 of 2016 they sold 2,500 Powerwalls and nearly 100 Powerpacks in North America, Africa, Europe, and Asia.37 They distribute their Powerwall product through solar installers, which know intricacies of local markets and already have existing customer relationships. Tesla’s distribution partner in the U.K., Solar Plants, stated the company emailed 3,000 solar customers about the battery. Out of the 1,500 who opened the email, 600 said they wanted one.38
Tesla’s vertical integration advantages are also some of the company’s disadvantages. It has invested large amounts of capital into both a distributed solar energy company and its Li-ion
factory. Neither of these technologies are guaranteed success in the future. It’s possible other battery chemistries emerge that store more energy for a lower cost. It’s also possible that despite the success in recent years of distributed solar, other inexpensive forms such as shale gas and large scale wind become more prominent. Tesla has also in some ways tied the success of its energy storage product to the success of SolarCity’s distributed solar.
Product Market Focus Basic Details Pricing
Tesla Powerwall 2 - Residential - Commercial and Industrial
- 10-year warranty with capacity guarantees
- 7 kW / 14kWh
- Scales to max 9 Powerwalls
$5,500
Tesla Powerpack - Utility
- Commercial and Industrial
- 50 kW / 210 kWh - Scales infinitely
$72,550
Table 4: Tesla battery energy storage products
Sonnen
Another large and important company in the energy storage market is a German company named Sonnen founded in 2008. Unlike Tesla, they are exclusively focused on the energy storage market. Despite approximately 66% of the company’s business coming from the German market and a market-leading 40% market share, they are aggressively expanding internationally. In 2015 they launched in Italy and in early 2016 they launched into the United States, followed by launching in the U.K. and Australia later in 2016. They are also active in the Czech Republic.39
Sonnen’s expansion is powered by two key strengths: financing and strategic partnerships. In 2016 they raised a Series D round of $85 million bringing their total financing to about $110 million. The CEO has recently said this will likely be the company’s last round of VC financing before filing for an I.P.O. Sonnen is not pursuing a strong vertical integration strategy like Tesla - in fact, Sonnen uses third-party manufactured battery packs from Sony and inverters from Outback - and the investors the company has attracted are also strategic partners. These include a Czech Republic utility called CEZ that is helping Sonnen deploy
systems, Envision Energy, a Chinese wind turbine-maker and project developer, and lastly GE Ventures, the venture capital arm of GE.40
Sonnen is on the 8th generation of its energy storage product and has installed near 10,000 batteries, more than double that of Tesla. This has given the company greater time to learn customer habits and a significant knowledge advantage.41 Almost all of the company’s focus has been on the residential market to date. However, as of August 2016 they are moving towards the commercial and industrial market and introduced a new product line called SonnenBatterie pro. Unlike Tesla, Sonnen’s product line focuses on the software powering the battery as well. They have a sonnenCommunity product which allows customers to trade energy with one another. This is not a revenue generating addition, but a service on top of the hardware they sell.42
Product Market Focus Basic Details Pricing
SonnenBatterie pro Commercial and Industrial
- 10,000 cycle warranty - 18 kWh
- Scales to 90 kWh
$37,154
SonnenBatterie eco compact
Residential - 10,000 cycle warranty - 4 kWh
- Scales to 16 kWh
$5,950
Table 5: Sonnen battery energy storage products
AES Energy Storage (AES)
AES Energy Storage is a subsidiary of the AES Corporation, a Fortune 200 power company with 21,000 employees worldwide. AES Energy Storage is exclusively focused on the large-scale utility market. To date, most of its energy storage projects have been in California or the Northeast U.S. with the goal of providing frequency regulation. It’s parent company already has an international footprint, and the energy storage arm is aggressively expanding
internationally by establishing a strong partner network as of February 2016. It signed agreements with Mitsubishi and Eaton to market and sell its energy storage solutions;
Mitsubishi in Asia and Oceania, and Eaton will sell the products in Europe, the Middle East, and Africa.43
AES’s product is an integration of supplier products into a package. They even have what they call their Battery Integration Center in Indianapolis, where they source batteries from LG Chem and Samsung, as well as sourcing inverters from Parker Hannifin. They then pair this package with their own battery controller and software. AES’s latest product is called the Advancion 4, which was developed to lower balance-of-systems cost (the cost of entire solution - racks, enclosures, installation, etc.) and provide more flexibility to solve utility needs. The product is designed to remove the need for utilities to build costly “peaker plants”
for times when electricity demand is high.44 Pricing information for the product was not readily available, and likely varies depending on the sales process.
Other Players
The energy storage market has seen a large increase in additional competitors in recent years.
In addition to the large players discussed above, the chart below aims to summarize a few of the other important companies.
Company Target Market
Geographic Focus
Brief Notes Cost
LG Chem Residential Commercial
- Partnered with solar installer Sunrun in U.S.
- Inverter sold separately - 6.5 kWh capacity - Focused on big data/software and uses batteries from Tesla, Samsung, and Panasonic46
Texas, Germany and Ontario.
down financing Orison Residential Not yet launched - Simple, home-use battery.
Ships to door and plug-in - $350,000 raised on Kickstarter - 2.2 kWh capacity - Inverter not included - Hired former Sonnen U.S.
CEO47
Nissan Residential Not yet launched, can pre-order only for Europe
- Developed from recycled car battery cells
Trina Residential - China - Looking at expansion to Australia, Germany, U.S.
Table 6: Summary of other energy storage companies and products
Source: http://www.businessinsider.com/home-battery-rival-tesla-powerwall-2-2016-10/