by Jason Deign, Solarplaza

European utilities face increasing pressure to offer residential solar-plus-storage packages or lose out to battery vendors with seductive consumer offerings.

E.ON's plans for a PV-plus-storage offering could signal the way forward for a growing number of electricity companies as utilities face competition from battery-bearing upstarts. The European energy giant is aiming to soft-launch a residential battery and solar product in April for the German market, where its consumer business is increasingly under threat from challenger brands such as Sonnen. Although Sonnen's customer base is miniscule in utility terms, it is one of the leading brands in the growing German market for energy storage, having recently shipped its 10,000th unit. Last November the company launched a concept called sonnenCommunity, which aims to take market share away from utilities by allowing customers to swap energy among themselves.

"We are promoting a community where you can produce your own electricity and share it," said Philipp Schröder, Sonnen’s managing director. Sonnen is not the only company in Germany pursuing this strategy. Caterva, Fenecon, Senec-IES and Next Kraftwerke are all touting similar business models. One firm, LichtBlick, posted a turnover of €700 million in 2014 based on energy services sold to more than a million residential and small business users on its community solar and storage platform. In June last year LichtBlick unveiled a tie-up with SMA, the inverter giant, to offer an integrated PV-and-storage package to the consumer market. At the moment, though, LichtBlick is more on the side of the utilities than against them.

Competition for this market is likely to increase throughout 2016 following the arrival of US storage vendor Tesla, which started shipping products to Germany, Austria and Switzerland at the beginning of the year. It remains to be seen how the majority of utilities will respond to this threat.

"We offer the IT platform to public utility companies and generating facility operators, so that they can manage and optimise their generating facilities," said Anke Blacha of LichtBlick’s corporate communications team. However, Germany's high retail prices for electricity make it attractive for consumers to consider installing PV and storage as a way of cutting energy bills. Conscious of this, companies such as Sonnen and E3/DC are marketing design-led battery products that appeal to affluent homeowners.

Competition for this market is likely to increase throughout 2016 following the arrival of US storage vendor Tesla, which started shipping products to Germany, Austria and Switzerland at the beginning of the year. It remains to be seen how the majority of utilities will respond to this threat. In Europe, the business case for residential storage is growing in Germany but is not yet compelling in most other territories. Nevertheless, in Spain there is widespread suspicion that dominant utilities may have lobbied the administration to pass a law last year imposing stringent limitations on grid-connected residential solar, and even more challenging conditions for storage.

Meanwhile, a world away in Australia, where the business case for residential solar and storage is as good as Germany's, if not better, utilities are beginning to offer their own PV-and-battery products to homeowners. Last June, for example, the electricity firms ActewAGL, Red Energy and Ergon Energy drew headlines with the launch of residential storage trial in association with Panasonic. In Germany, E.ON is clear about what strategy it intends to follow.

In a press release celebrating E.ON's investment in Greensmith, an energy storage software developer, Susana Quintana-Plaza, senior vice president for Technology & Innovation, said: “E.ON is committed to empowering customers and promoting decentralised energy solutions."


Hear from Thorsten Gross, E.ON’s commercial manager for battery systems, at the upcoming Monetising Solar + Storage EU conference in Milan, Italy, on March 3. Register now so you don’t miss out.