Sunrun to offer solar panels plus batteries with LG Chem

SunRun installers Brandon Anderson and Will LaRocque prepare to install one of 28 Q-Cell panels on a home on Friday, July 15, 2016 in Sunnyvale, California. SunRun installers Brandon Anderson and Will LaRocque prepare to install one of 28 Q-Cell panels on a home on Friday, July 15, 2016 in Sunnyvale, California. Photo: Michael Noble Jr. / The Chronicle 2016 Photo: Michael Noble Jr. / The Chronicle 2016 Image 1 of / 1 Caption Close Sunrun to offer solar panels plus batteries with LG Chem 1 / 1 Back to Gallery

The same company that builds the battery for GM’s upcoming Bolt electric car now wants to put one in your basement — and plug it into solar panels on your roof.

LG Chem and San Francisco’s Sunrun announced a partnership Wednesday to offer solar arrays paired with in-home batteries — a combination that many analysts consider the future of the solar industry.

LG Chem, based in Korea, will supply lithium-ion batteries for Sunrun’s BrightBox system, which gives homeowners the ability to store solar energy generated during the day for use in the evening. Sunrun started offering BrightBox this year in Hawaii, using batteries made by Palo Alto’s Tesla Motors, and hopes to expand it to California in 2017.

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“As a country, in order to get to the level of renewable power penetration we need, we’ll need storage,” said Sunrun co-founder Ed Fenster.

LG Chem supplies batteries to 16 of the world’s largest automakers and makes the lithium-ion batteries for the plug-in Chevy Bolt, which is expected to drive more than 230 miles on charge.

Combining solar panels with batteries at a price consumers can afford has become a holy grail for the industry and is one of the driving forces behind Tesla’s proposed $2.6 billion acquisition of SolarCity.

And yet, even though battery prices are falling, the combination is still considered too costly to make sense for most homeowners.

“It’s probably the next big thing,” said Shayle Kann, senior vice president of research at Greentech Media. “But it’s important to remember it’s not an economic proposition right now.”

Sunrun introduced BrightBox in Hawaii because the state has America’s highest electricity prices, due to its isolation. That makes it easier for the solar-plus-storage system — which customers lease with monthly or annual payments — to compete.

According to Hawaiian Electric Co., the cheapest residential utility rate on the islands last year was 28 cents per kilowatt hour. Fenster said Sunrun offers BrightBox in Hawaii at roughly 20 cents per kilowatt hour. The average residential rate from Pacific Gas and Electric Co., by comparison, is 22 cents.

Homeowners will typically lease, not buy, the systems, so there are no up-front costs. Still, not everyone will want solar panels on their roof and a battery in their home, not to mention locking themselves into a 20-year contract.

Sunrun plans to offer BrightBox in California and on the East Coast, Fenster said. But the company is waiting to see how California regulators adjust electricity rates next year.

Under changes already approved by the California Public Utilities Commission, state residents will soon start paying different prices for electricity at different times of day, with the highest prices hitting when demand on the state’s power grid reaches its daily peak. This type of rate, called time-of-use, is expected to cover most California homes by 2019.

Since Sunrun plans to own the BrightBox systems, the company may be able to sell electricity from the batteries to the utilities during peak hours, when prices are high. That income would, in turn, allow Sunrun to offer the system to its customers for a lower cost than would otherwise be possible. But first, Sunrun needs to see where California regulators set those peak-hour prices.

“The million-dollar question is how much more valuable is power going to be on-peak than it is off-peak,” Fenster said. “The fine points of these details matter.”

David R. Baker is a San Francisco Chronicle staff writer. Email: dbaker@sfchronicle.com Twitter: @DavidBakerSF