Sonnen has stepped up to challenge Tesla in the Australian market for energy storage paired with solar roofs.
The German residential storage company's Australian branch has teamed up with Bristile Roofing to deliver storage systems alongside the latter's solar roof product, One Step Off the Grid reports. The tile maker plans to release its solar product in September and start targeting the 102,000 new-build homes expected in Australia through 2018.
Tesla conspicuously advertizes the Powerwall in conjunction with its solar roof, which the company says it will start installing in California in June, before “rolling out to additional markets over time.” They are expected to commence in Australia in 2018. If the fledgling solar tile market takes off, appealing to homeowners who want solar power but don't like the aesthetics of PV modules, it could become a profitable vehicle for pushing battery sales.
Sonnen doesn't make solar products of its own, so a partnership was the way to tap this potential market.
“The new home market is going to be one of the biggest channels for solar and storage as it will be a prominent feature for home builders in their designs,” Sonnen Australia Managing Director Chris Parratt told OSOG.
The deal offers Sonnen several advantages for competing with Tesla. If the timeline pans out, Bristile will have the jump on the market by several months. Being based in Australia, it should be able deliver products more rapidly than Tesla, which will have to ship them around the world. Bristile's website says it produces up to 250,000 conventional tile units per day from three plants.
Both companies' solar tile offerings will be new and untested, but Bristile at least boasts three-quarters of a century of roofing experience. One of the major open questions in Tesla's push for roof tiles is how it will compete with established roofing distribution channels, and whether homeowners will trust a Silicon Valley upstart with keeping their homes dry.
As Eric Wesoff put it last fall, “Reaching through to the end customer for an integrated PV roof in the new homes market is not a semiconductor, mechanical or financial engineering problem. You're looking to drive a completely new type of product through the very conservative roofing channel — and that's a daunting marketing challenge.”
Sonnen found a partner that knows this territory. It's also choosing to pursue this market in Australia, which has much more favorable residential storage economics than the U.S.
Australian solar penetration soared in recent years, but now customers get minimal reimbursement for excess generation.
“Demand for behind-the-meter storage is rapidly increasing, particularly as new solar customers can't access the formerly lucrative feed-in tariff programs,” said Brett Simon, a BTM storage analyst at GTM Research. “Now, there's a greater trend towards self-consumption in order to maximize value from solar-generated electricity, particularly as Australia boasts high retail electricity prices.”
In the U.S., most Sonnen customers use the system for clean backup power in the event of an outage. The payoff there is more psychological than financial. Residential storage generally remains an early adopter item, rather than a mass consumer good.
It's not surprising, then, that we haven't seen a similar announcement of an alliance with one of the many U.S. companies seeking success in the solar tile market.
The Australia strategy does synchronize with Sonnen's push to enter the new-build home market. As we have reported previously, the company is finalizing contracts to install batteries in American new-build housing developments, which would make it easier for customers and utilities to get on board.
For a customer, the cost of the system would appear as a marginal bump in the mortgage, removing the barriers of cost and financing that often stymie a storage purchase. That's particularly helpful for Sonnen, which sells a higher cost product than Tesla, banking on a longer battery life and more valuable operations to pay off over time.
Meanwhile, a large housing development could offer a substantial aggregated storage resource to perform utility services, under the right market conditions.
“One of the best ways to ensure higher deployment levels is for storage system vendors to make these sorts of deals and ensure their products become standard in new construction,” Simon noted.
The solar roof tile industry hasn't achieved a widespread commercial success to prove the concept. There's no guarantee it will soon. Even without that, a closer relationship with the homebuilding industry could serve Sonnen well.