Sharp eyes $100m US commercial opportunity

SmartStorage, the Sharp energy storage system, is being targeted at commercial and industrial customers as Sharp see no value in the utility and residential energy storage markets for now.

SmartStorage, the Sharp energy storage system, is being targeted at the commercial market as Sharp see no value in utility and residential energy storage in the US for now. Photo credit: Miyuki Meinaka

Sharp is aiming to make around USD$100m from the commercial energy storage market in the next couple of years, according to a senior US executive.

Sharp’s Energy Systems and Services Group general manager and founder, Carl Mansfield, told Energy Storage Report the company already has a pipeline of up to 400 customer sites under review.

Last week the electronics giant unveiled a 30kW installation with Baker Electric, one of its US energy storage channel partners.

Sharp, which launched its SmartStorage product line last year, is also eyeing expansion of its US-based energy storage products into Japan, Mansfield said. “We are in the process of adapting this product for the Japanese market,” he confirmed.

He said Sharp believes there is “a pretty big opportunity for commercial demand response based on batteries.”

North American market possibilities

The conclusion is based on an exhaustive review of North American market possibilities that began up to five years ago and ended up with a dismissal of the residential and utility energy storage markets.

“There was a lot of interest at the time in home energy management,” Mansfield said. “We concluded the customer prospect is not very appealing.”

The company also wrote off utility-scale energy storage, because of the lead times and pricing involved. “What we discovered was that most early deployments were government-funded pilots,” said Mansfield.

“It became apparent that if we relied on utilities we’d be waiting a long time. And what matters is price, first, second and third. We’re not targeting that segment because one of Sharp’s differentiators is the customer value and utilities don’t reflect that.”

Hence Sharp’s SmartStorage system, which is currently only available in the USA, is specifically aimed at commercial and industrial customers that are subject to peak demand charges.

Up to 50% of monthly bills

These charges are for the occasional spikes in energy consumption that represent a small fraction of a customer’s total power use but can account for up to 50% of monthly utility bills, Sharp says.

SmartStorage is designed to handle these spikes with battery power rather than grid supplies, so peak use is effectively capped and companies see a big drop in their utility bills.

In markets where businesses are subject to pricey demand charges, such as California, Mansfield said the system could pay for itself in as little as four years.

SmartStorage comes in two 30kW configurations, one delivering 40kWh and one providing 80kWh. It can be connected to solar panels or the batteries can be recharged with grid power in off-peak periods.

Up to 16 units can be connected in parallel and Sharp provides an optional 10-year Asset Management Service Agreement which provides all routine and unscheduled maintenance coupled with a 10-year demand reduction performance guarantee.

On-site control and cloud-based monitoring

Under the hood, SmartStorage consists of Samsung SDI lithium-ion batteries, Ideal Power bi-directional converters and on-site control and cloud-based monitoring systems developed by Sharp. These systems are “extraordinarily reliable,” Mansfield said.

The control software, housed in a computer server on site, takes its cue from the cloud-based monitoring system but is capable of working on its own for days if the connection between the two goes down.

Assuming a decent connection, however, “our strategy is to deploy additional features online to generate savings,” said Mansfield. “Our system is designed to be 100% field upgradeable. Our approach would be to offer software updates with an ROI attached.”

Sharp is only selling SmartStorage through channel partners such as solar installers and electrical contractors. Before selling the product the company looks at a customer’s energy use to see if it is a good candidate for peak demand reduction.

Sites such as office buildings, light manufacturing facilities, schools and some hospitals all fit the profile, Mansfield said. And for now it appears that focusing on such commercial or industrial locations could be a shrewd move.

Knowledge of consumer electronics

Sharp’s in-depth knowledge of the consumer electronics market means it is unlikely to have written off residential energy storage lightly. But Mansfield said he thought a significant residential market opportunity was still about “three years away in the US.”

And when it arrives, there is evidence from more developed markets, such as Germany, that home-based energy storage vendors could struggle even in the face of significant growth.

Meanwhile, other companies are reporting success after pursuing Sharp’s model of commercial-scale energy storage systems for US demand response applications.

Last week, for example, Energy Storage Report covered news of Demand Energy’s sale of 1MW of battery systems in Manhattan residential high-rises. Mansfield clearly thinks Sharp will be a strong contender in such deals.

“We’re confident California is the largest market opportunity right now,” he said. “But the product works well in New York and New Jersey as well. We are pretty excited about where this business going.”

Written by Jason Deign

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