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German solar battery maker sonnen expands capacity as power subsidies end

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FRANKFURT, Sept 29 (Reuters) - German residential solar battery maker sonnen is extending capacity at its home base in Wildpoldsried with demand for home storage systems expected to grow as subsidy programmes for supplying renewable power to the grid end.

There are 1.8 million photovoltaic plants in Germany, the bulk being small rooftop solar units. Homeowners have benefited from a rolling 20-year programme of generous feed-in tariffs for selling renewable energy to the grid.

But with these being phased out, the systems must become self-financing and it could be more economical for homeowners to use batteries to store the power they produce for later domestic use.

"We're investing a small double-digit million euro sum in new halls and fabrication facilities," said Oliver Koch, who will become sonnen's CEO on Thursday, replacing founder Christoph Ostermann who is leaving the company at the end of the year.

"We will scale up the business at home and also grow more in international markets," Koch added.

Set up 10 years ago and fully taken over by Shell in 2019, sonnen has sold more than 60,000 home storage batteries to date, employing 700 people across Germany, the U.S., Australia, Britain, France and Italy.

As well as providing hardware - rooftop panels linked to batteries - sonnen offers contracts to market the energy output, and integrate the arrival of private electric cars.

The wider aggregation of consumers into virtual communities to interact with power grids is a business model also pursued by rivals including Solarwatt and electric carmaker Tesla.

Prior to leading sonnen, where he has been chief operating officer since 2014, Koch worked for U.S. sector peer SolarCity, now a Tesla subsidiary, and its forerunner Paramount Solar.

He said the internal promotion showed that Shell put faith in sonnen's business.

"Other oil majors plan similar activities. They have understood that the future is not fossil," he said. (Reporting by Vera Eckert, editing by Kirsten Donovan)