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Batteries Surging, But Arkansas Solar Leaders Feel Price Pressures

4 min read

Just 15 months ago, when COVID was a strange new word, Shine Solar of Rogers had sold only about five battery storage systems on the hundreds of residential solar arrays the company had installed.

Now 20% of customers are requesting batteries, company co-founder and CEO Nick Gorden reports, adding that the pandemic and February’s brutal cold and grid crisis have changed consumers’ thinking.

“Our feeling then was that unless people could save money by going solar, they wouldn’t do it,” Gorden said, “so they wouldn’t be interested in getting the battery.”

The battery units’ extra costs do alter how quickly solar configurations will pay for themselves, and that was often an expense too far.

The past year knocked that assumption aside, Gorden said. “What we found is that we were wrong.”

A streak of independence and self-reliance emerged, he said. “They want to take care of themselves, and not rely on utility companies. So a lot more people are investing in batteries with their solar panels. Backup generators are another alternative.”

Energized for Batteries

Several Arkansas solar developers noted the new market for batteries last week in a series of conversations with Arkansas Business.

Most see a lot of blue skies ahead, but general inflationary pressures are becoming a concern, along with some material shortages affecting the pricing of photovoltaic cells, or solar panels.

“One thing to understand is that if you have solar panels on your roof, and you don’t have a battery, when the power goes out, even in the middle of the day, your solar panels are going to stop working,” Gorden said, noting that utility companies don’t want customers’ solar power backing up on the grid during a power outage, a potential risk to linemen working on repairs.

“So the only way to have electricity when the power goes out, is if you have the solar panels and the battery to go with it. Then you’ll run whatever power the solar panels produce with the excess going into the battery for use when the sun goes down.”

Shine gets a flood of calls after every power outage and storm, he said.

“So that’s what we’re seeing is batteries, and I believe they’re transformational to the solar industry,” Gordon said. “I think in the future, it’s just going to become standard.”

A top-of-the-line Tesla wall might cost a customer $19,000, Gorden said, but lesser-known or smaller models might get the price down “to ten or 12 thousand.”

It’s a big ticket, he admits. “But what a lot of people don’t realize is 95% of our customers will take out a solar loan to go solar. And so they just finance that battery right along with their solar panels, it only adds about an extra $40 to $50 a month on their monthly loan payment. For a lot of people, that’s what they pay to go out to dinner.”

The Future of Solar Prices

John Sawyer, CEO of Stone Creek Solar of Jonesboro, said battery adoption will continue to surge as the storage systems become more efficient. He also noted a long run of falling prices for solar systems, but he fears material shortages and other issues have ended that decline, at least temporarily. The price of solar plants has fallen from $3.57 in gross cost per watt in 2016 to $2.81 in the second half of 2020, according to EnergySage, and Sawyer expects costs to continue falling in the long run.

“However, I do not believe the industry has seen a drop in pricing from 2020-21,” Sawyer said, “and personally I do not expect prices to drop until the solar industry deals with shortages of glass and solar cell raw materials.” He said Stone Creek is paying basically the same prices to vendors now that it paid in 2020.

Bill Halter, the former Arkansas lieutenant governor and CEO of Scenic Hill Solar of Little Rock, said an explosion at one manufacturing plant for polysilicon and a fire in another had created a shortage of that solar cell ingredient. “Prices have tripled,” he said, adding that steel and glass prices have soared.

“Steel prices are up globally for all kinds of reasons, and COVID plays into all of it, but it isn’t the only factor,” said Halter. “There’s also a shortage of semiconductors that is playing into many different industries. It’s even inhibiting the manufacture of automobiles.”

So far, he said, Scenic Hill has “managed around” the price spikes to avoid passing the costs on, “but nobody can manage around things forever.”

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