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Home battery maker sonnen sees 'deep integration' sustaining growth under Shell


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Home battery maker sonnen sees 'deep integration' sustaining growth under Shell

German battery maker sonnen GmbH is confident that the breadth of supplemental services in its residential storage offering will push the company ahead of the competition as it continues its global expansion in the wake of a takeover by oil major Royal Dutch Shell PLC.

The company's vice president in charge of strategy, Felix Dembski, said sonnen will weigh up where to expand its smart home storage range and services including electric vehicle charging this year, taking advantage of the fresh wind in its sails after Shell agreed to take over the startup in February.

"We haven't picked a new core market for quite a while, so we'll see in this year's review how we move things forward. With Shell as a partner, of course we have a lot more possibilities," Dembski said March 7 in an interview on the sidelines of the SolarPower Summit in Brussels.

SNL Image
Sonnen's offer home storage systems and services including electric vehicle charging.

Source: Thinkstock

'Deepest integration'

In its continued expansion under Shell ownership, sonnen is betting on its various services to set the company apart from large competitors like Tesla Inc. and Samsung Group that also sell solar-powered batteries to homeowners.

The firm operates a network that allows users to buy and sell excess energy to each other through their smart meters and also runs Germany's largest virtual battery, powered by blockchain, that bundles together thousands of residential systems to help balance the power grid of transmission operator TenneT TSO GmbH. Battery owners that participate in the scheme receive a lower tariff from sonnen for any additional power they draw from the grid.

"Who else has a virtual power plant and provides frequency control?" Dembski said. "We are the ones who do the deepest integration into the system, which then creates the most customer benefit." He said the firm's lithium iron phosphate batteries also have a longer lifespan and are more secure than storage systems produced by some other companies, providing an additional edge.

Shell had previously led a €60 million financing round in sonnen in May 2018 and said that taking over 100% of the company would specifically speed up the roll-out of electric vehicle charging solutions and grid services based on sonnen's virtual battery pool.

The oil company, like rivals including BP PLC and Total SA, has heavily expanded into the power sector in recent years, buying U.K. power supplier First Utility Ltd. and European electric vehicle charging station company New Motion. It has also partnered with IONITY GmbH, a joint venture of European and U.S. automakers focused on creating a network of fast-charging stations.

Expansion at home and abroad

sonnen has so far installed more than 40,000 home storage systems around the globe, produced in its factories in Germany, Australia and the U.S. But Europe has made up the majority of installations to date and the company's home markets on the continent are still far from saturated, Dembski said.

In sun-rich Spain, new regulations are removing barriers to solar self-consumption, while in Germany the expiry of 20-year subsidies for renewables first awarded in 2000 will soon open up new opportunities as well, he said.

More than one million households in Germany have a PV system on their roof and could be potential customers for retrofit batteries in the next decade, according to Germany's foreign trade and investment promoter. Only 120,000 households and businesses had installed PV battery systems by the end of 2018 and forecasters expect a surge in deployment in the coming years as storage prices continue to decline.

"Everybody who drops out of the feed-in tariff with their solar system will want storage — economically nothing else makes sense," Dembski said.

But markets around the other two production centers in the U.S. and Australia are also rapidly growing, according to the strategy chief. The company's U.S. unit, Sonnen Inc., this month appointed a new board of directors including chairman and CEO Blake Richetta, a former sales manager at Tesla, to expand the business throughout North and Latin America and the Caribbean.