I have to say that I really like Enphase's market approach here. Some more thoughts:
- Surprising, but Logical!:
Obviously, I didn't see this one coming
. (Perhaps QueenBee did?) That said, it's a logical next step enabled by the miracle that is modern power electronics. Just like a "Brushless DC Motor" is really an AC synchronous motor with an electronic commutator to allow connection to a DC power source, we need to get used to the idea that an "AC battery" is reall a DC battery with an electronic interface to the power grid.
- Leverages Strengths, Minimizes Development Costs:
Enphase has come up with an approach which leverages their strength in microinverters and at the same time will support their position in the overall PV market. This approach minimizes their development costs and risks and should allow them to slowly and steadily ramp up this product as the market grows. It will be interesting to see Enphase try to convince their customers to purchase batteries after telling them for years that batteries were liabilities.
- Emerging Market:
The market for chemical batteries for grid storage is in its very early stages. Utilities have wanted to do this for many decades, but cost and reliability concerns have limited grid storage primarily to pumped hydro (which is currently growing rapidly worldwide).
- Very Low Barriers for Entry:
Enphase's offering minimizes the barriers to entry by reducing the cost, risk and difficulty of adding grid storage to any installation. They also allow an incremental approach to adding AC batteries. This should give Enphase access to a large base of early adopters who already own and (mostly) trust Enphase microinverters for their PV systems. It will be trivial to "dip your toe into the water" of grid storage technologies with this product. (The exception here could be related to regulatory issues that utilities may try to put into place to restrict the installation of these devices.)
- Low Cost:
As drees has pointed out, cost is the key issue that Enphase must focus on in order to grow this market. And even then, it will likely be limited to areas with steep TOU rate structures. That is likely to be a steadily-growing market as energy becomes a more and more expensive commodity and/or net metering becomes less available.
- Future Support for Grid Failures?
If Enphase wants to create a much larger market for this product, they will need to come up with an offering that will provide power in the case of grid interruption. While I do not expect to see such a capability for at least a few years, such an offering would directly compete with traditional battery-based inverters and eventually even home backup generators (when combined with controllable microinverter-based PV).
- Batteries and Microinverters on Similar Growth Path:
I expect Li-ion battery capacity to grow at a steady rate, just as we see happening with PV module and microinverter power ratings. That should allow the AC battery to steadily improve as all three technologies mature together.
- Safety is Critical:
Safety will be a critical issue for this product. That has always been a hallmark of microinverters, but the addition of Li-ion batteries to the mix changes the equation significantly. If there is even a single house fire caused by one of these AC batteries, the market for this product could quickly disappear. Because of this, I will be a bit surprised if these units actually come in a plastic package.
- Reliability is Critical:
Reliability will also be critical to the success of this unit. Obviously, the battery is the main concern here. But I will point out that even with the hardware design for the microinverter being shared with the PV version, it does NOT follow that the microinverter will be as reliable in the battery as it is on the rooftop. This is because on the rooftop the PV module has distinct limits on the amount of current and voltage that it can deliver. In the battery application, the inverter now faces very low-impedance sources on BOTH the AC and the DC sides. Drawing power from the AC side also adds new forms of stress to the inverter that Enphase inverters have not previously faced. These facts can make it more challenging to keep all the components in their safe operating areas. I expect the firmware for the battery application will take a few iterations to iron out. Overall, I do not expect the AC Battery to be as reliable as the microinverters on the roof. Clearly, neither does Enphase, given that the warranty period is only 40% as long.
- Will EVs Compete?
My first thought was that Enphase's main competition in this space might come from EVs. My reasoning was that as EV battery capacity and reliability improves, EVs should be able to provide more-and-more grid-interactive capabilities. And personally, I do not relish the idea of purchasing and servicing batteries for BOTH the car and the house. But the EV may not be able to fill the role that Enphase is targeting since the EV will often not be at home when the PV is producing and will also need to charge when the PV is NOT producing. As such, Enphase should be able to provide capabilities that EVs cannot touch.
Overall, I do not expect these things to fly off the shelves anytime soon. But Enphase's approach allows them to deliver a product into the market with a minimum amount of development and manufacturing costs, which should allow them to withstand a very slow market ramp-up and learn as the units get deployed. It will be interesting to watch.