Solar is the future of renewable energy. As utility costs rise, more and more consumers are looking for affordable options to run their homes. After the announcement of Sunrun and LG Chem, homeowners now have a new energy option. But can Sunrun and LG Chem compete with Tesla and Panasonic?
Sunrun and LG Chem Partnership to Build Home Battery Storage
LG Chem is best known for being the world’s largest maker of automotive batteries. Now, they’re entering the home energy market by partnering with San Francisco-based rooftop solar company, Sunrun, Inc. LG Chem will produce storage batteries for Sunrun’s BrightBox home battery system. The partnership puts LG in direct competition with Tesla Motors, who announced a partnership last week with Panasonic to manufacture solar panels which would power Tesla’s “Powerwall” battery.
Essentially, both partnerships envision building out the same product. Homeowners can install solar roofs, which would fuel storage batteries. Those batteries would in turn power the home’s energy needs, such as air conditioning and electricity. However, Tesla and Sunrun both see the batteries as doing more than just that. The solar panels on their roofs would generate electricity to power their homes, charge home battery packs and recharge their electric car batteries.
Currently, solar panels can power a home temporarily. However, storing that energy is a problem. Solar panels are cheaper every day, The US government offers federal tax credits and incentives to help with that. But the high cost of batteries for storage mean that even those homes with solar panels are stuck using traditional energy options from the utility company after sunset. But by bringing on more battery manufacturers, such as Panasonic and LG, the solar industry could start seeing some competitive pricing when it comes to home batteries, making them a very real cost-effective option for consumers.
Sunrun launched BrightBox this year in Hawaii, where utility prices are through the roof, using Tesla-made batteries. The company will now add LG Chem batteries as their major supplier, making prices even lower. Sunrun to focus expansion on California in 2017, but is waiting to see how California regulators adjust electricity rates next year. State residents will soon be paying different prices for electricity at different times of day, paying more during peak hours. And since Sunrun will own the BrightBox systems, the company may be able to sell electricity from the batteries to the utilities during peak hours to save them money. That income would then let Sunrun offer customers an even lower rate.
One advantage Sunrun has over Tesla here is that Tesla’s partnership with Panasonic is dependant on successfully merging with SolarCity. Sunrun does not need any such stipulation. As such, both Sunrun and LG Chem can move forward with no hiccups.
Enjoy watching this cute video from Sunrun on how you can run your laundry room with the sun:
While investors don’t seem thrilled at the news – Sunrun (RUN) is down 6.86% – once energy regulations force utility prices up, shares of Sunrun will follow. Look for Sunrun to be a very affordable strong long-term buy.
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