By most estimates, the next few years promise to be pivotal for sweeping technological change. Electric vehicles are on the cusp of going mainstream, the adoption of renewable energy is at an all-time high, and the Internet-of-Things (IoT)' devices and wearables will ensure that we're connected in ways like never before.
However, these industries converge at a ceiling that limits not only their ability to improve their products but also their access to markets - thanks to battery technology.
Approaching the tipping point
The primary limiting factors in current battery technology are price and capacity. The average lithium-ion battery - the most commonly used form of rechargeable energy storage - loses approximately two per cent of its capacity per month. This means that technologies which depend on energy storage, such as electric vehicles and power grids, will become less efficient over time and will need to be replaced.
Ideally, battery technology will become more advanced so that we can start producing batteries that can power our daily activities without requiring frequent recharging, and which cost less than $100 per kilowatt-hour (kWh) to manufacture.
The technology has seen improvements at a steady pace over the last decade. According to the Battery University, battery capacity experiences a gain of six per cent every year. The improvements in capacity naturally lead to lowered prices too: in 2008, the price of a lithium-ion battery used to cost more than $1,000 per kWh to manufacture. Today, the price has dropped to as low as $145 per kWh, and is expected to keep declining.
Moreover, in 2015, a report from Deutsche Bank projected that the costs of energy storage would fall by 20 to 30 per cent a year, enabling mass adoption of solar energy by 2020.
An uncertain timeline for success
Despite multiple claims that the world is on the verge of experiencing a "battery revolution", the reality is that we're still not quite there yet. It's also difficult to tell when the technology will experience the sort of breakthrough that is needed to propel renewable energy and electric vehicles into mainstream success.
One of the biggest hurdles is that the technology is still not well-understood. Experimenting with different materials requires years of testing before being implemented, especially with big-ticket consumer purchases such as automobiles.
Financing the market is another barrier to success. Even if a novel solution was prototyped, it would require colossal amounts of funding in order to begin manufacturing. An analysis by Lux Research found that battery start-ups can require up to $1 billion of funding within six years.
The problem is compounded by the fact that battery research branches off into multiple technologies, such as sodium-sulphur batteries, exotic chemicals, flow batteries and more; with each option competing for funding.
Finally, the energy storage market has yet to produce a business model that attracts large-scale investor interest, as it is dependent on a highly complex and interconnected set of factors that are influenced largely by government policy.
The potential for solar adoption in Australia
Still, one of the key markets in which the advancement of battery technology is likely to trigger wide-scale change is Australia. The continent is poised to become the "heartland for the battery-storage revolution", with mass numbers of residents adopting solar energy.
Rooftop installations of solar photovoltaic panels have already surpassed a third of all houses in Queensland. This is unsurprising, when taking into account the fact that the country has the highest solar radiation per square metre of any continent.
Moreover, Australians pay more than four times as much for power from the grid than for tariffs to export their excess energy back into the grid. Under such circumstances, it makes more economic sense to look into battery-stored energy options.
In 2015, Panasonic signed a deal with three Australian energy companies - ActewAGL, Red Energy and Ergon Energy - to trial battery-storage technology in selected residential zones in Queensland, New South Wales, and Australian Capital Territory. The system, which was designed specifically for the Australian market, is expected to help users double their rates of self-consumption from 30 to 60 per cent.
Besides increasing Australian customers' access to clean energy, Panasonic's Residential Storage Battery System also helps them reduce their utility bill. Ayesha Razzaq, General Manager of Retail at ActewAGL, said: "ActewAGL customers are seeing positive results from their solar and battery system; for example, our first installation created expected savings of up to 50% on one family's annual electricity bill."
The arrival of cost-friendly battery storage will also challenge energy providers to change their business models. Ramy Soussou, head of regulatory affairs for Red Energy said: "This is a fundamental change in the market, we have to play in the storage market...We believe customers will embrace the battery storage technology. It might initially be a slow uptake, but we think that most customers will embrace this...We can't afford to miss out."
As the advancement of battery technology continues to result in improved capacity and lowered prices, we can expect to see a revolution in multiple sectors, including energy and automotives. Australia - with its high solar resource and low tariffs on battery-stored energy - is set to lead the global market in the mass adoption of solar energy, and will be in a position to set an example for regulatory authorities and energy players in other countries.
What are your thoughts on how battery technology improvements will impact the world? Join the conversation on our Panasonic Homes & Living LinkedIn page, or subscribe to our Panasonic Homes & Living blog to find out more about sustainable technologies.
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