We are seeing a lot of battery companies only quoting the payback of solar and batteries combined. But adding batteries makes payback worse. So always compare the payback of just solar.
I want you to know I have a great investment for you. Believe me, it’s great. I have all the best investments. Trust me — it’s yuge! If you invest in the Ronald Trump fund you will get an average return of over 4%. I guarantee it!1 Just hand over your money and you’ll start making money!
What’s that? You want me to actually explain what I will do with your money? Trust me, you don’t want to worry your pretty little head about that!
What? You do want to worry your pretty little head about that? Alright then, what I will do is take your money and invest it in the Australian stock market. Then each year I will take all the dividends and all the capital gains and I will reinvest half and I will take the other half in the form of $50 notes and burn them. It will be great! In 10 years you can have over a 50% return!
Wait a minute! Calm down! You say you don’t want me to burn half the money your investment makes? I don’t understand why you are complaining. You will still come out ahead!
If someone seriously tried to make you the above deal, you’d have no trouble at all telling them to go and make love to a cactus. But unfortunately for Australian households, including many who may not have much money to spare, there are unscrupulous salespeople more cunning and more convincing than Ronald Trump, who are ripping people off in a similar way by blending the high return from rooftop solar with the zero to negative return from batteries to make it look as though batteries can now pay for themselves. And it’s resulting in a good portion of people’s money going up in smoke.
I have no problem with people buying batteries that won’t save them money if that is what they want to do, but I am totally against deceiving people into blowing money by buying batteries they would never have bought if they knew they would be losing money on them.
At the moment no battery pays for itself, not for normal on-grid households, so if you see payback claims advertised for solar and batteries, make sure they also disclose what return you can expect from each independently. If the company can’t or won’t tell you, then you’ll know you are dealing with someone dodgy.
Batteries Don’t Pay For Themselves Yet
Every time I write about batteries I am unfortunately forced to remind people they don’t pay for themselves yet. Not for anyone whose electricity consumption is remotely normal, even in the most favorable locations in Australia.
I should explain what I mean when I say they don’t pay for themselves. It’s not enough for a $10,000 battery system to save $10,001 on electricity bills in today’s money by the end of its life to be worthwile. It will also have to save at least as much value as the next best use of that $10,000 would have provided. For some people, the next best use may be a term deposit. For others it could be paying off the house, investing in shares, or paying off credit cards.
In an earlier article I examined if a Powerwall 2 could clear the lowest hurdle of performing better than putting the money into a term deposit and it could not. This was the case even though I used the $10,150 figure for full installation provided by Tesla and not the $11,000 to $13,000 it is likely to cost in the real world.
The Tesla Powerwall 2 is very likely to be the cheapest battery system available per installed kilowatt-hour2 over the short term at least. This means any salesperson who tells you buying batteries now will save you money is almost certainly wrong3.
Grid electricity prices are, once again, rising. While this will only improve the payback time of rooftop solar it is unlikely to improve the payback time of batteries because solar feed-in tariffs are expected to rise by around the same amount. It is possible the combined price hikes and feed-in tariff increases will make the economics of batteries worse, as I explained here.
Rooftop Solar Has The Fastest Payback Of Any Normal Investment
While home batteries don’t pay for themselves yet, rooftop solar sure as hell does. It is the best investment most home owners can make. Not only does it save money, it also saves the planet!
Alternatively, for those whose hearts aren’t filled to the brim with unbridled capitalism — Not only does it save the planet, it also saves money!
Here in Adelaide, a household that consumes half the electricity produced by a 5 kilowatt system that costs $7,000 can have a payback time of under 5 years. In other words, it can take less than 5 years for the savings on electricity bills to total $7,000.
If the household instead only consumed 30% of the solar electricity generated, then with a 10 cent feed-in tariff, which is easily available, it can have a payback time of 6 years.
Since electricity prices are about to go up in July in every state except Victoria, which had an increase at the start of the year, payback times will only improve and rooftop solar will become an even better investment.
Blending Solar And Battery Payback Makes No Sense (If You’re Ethical)
Because batteries don’t yet pay for themselves and currently don’t provide an environmental benefit4, no one who is interested in saving money is going to buy them unless they are deceived. Good salespeople, as in ethically good and not just good at shifting product, understand this and focus on selling batteries to early adopters who are interested in the technology and don’t mind if it doesn’t save them money.
Bad salespeople, as in ethically bad puppy kickers, use blended payback to lie to people and imply batteries will save money. They know batteries won’t pay for themselves, but intentionally hide this fact by blending the payback time of rooftop solar and batteries together to make a sale.
And this just isn’t good enough. Sure, provided they are careful with what they say they may not technically be doing anything illegal, but you don’t have to be a criminal to be an arse.
There are people in Australia who are struggling to get by — people raising kids, pensioners on fixed incomes, those who are trying to pay off their homes — who are looking to save money on their electricity bills and hopefully do the right thing by the environment. They don’t deserve to be ripped off by unscrupulous salespeople. Even the people who have plenty of money don’t deserve to be ripped off.
As costs fall, home battery storage is likely to become a huge business in Australia. When people can save money by installing batteries the market will boom. But the battery industry is only going to be make things hard for themselves if they allow people to become convinced the industry is full of crooks. One ripped off customer now will cost who-knows-how-many sales in the future. Rather than building up a good reputation that will pay off later when the battery boom begins, current players may be handing the market on a platter to late entrants who haven’t burdened themselves with a bad reputation. These days the internet makes it much harder to sweep a bad rep under the rug and sell to new rubes. This makes it even more important to build a good reputation from day one.
Australian Consumer Law Protects You
Under Australian Consumer Law you are protected by consumer guarantees. These apply no matter what the written warranty may say or what salespeople tell you. One of them is:
Products must be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing.
This means a product must do what the seller said it would. If you were told a battery system will save you money and it does not then you are protected by your consumer guarantees and entitled to a remedy, which in this case would be a refund, as a repair or replacement will not solve the problem. It also means if you tell them you want to buy a battery system to save money, then they can only sell you a battery system that will save you money.
I’m no lawyer, but I do think companies that hide the fact batteries don’t save money by blending their payback with that of rooftop solar are on thin ice. Australian consumer law is based on what a reasonable person would conclude and I don’t think any reasonable person looking to save money would buy a bundled solar and battery system, if they knew the battery part was only likely to lose them money.
The Final Bad Joke
So my final word is, never buy bundled solar and batteries from someone who won’t give you an honest independent breakdown of their payback separate from each other.
It’s not ethical for salespeople to give pensioners, like my grandmother, who are looking to save a bit of money and leave a better world to their grand kids, blended paybacks for solar and batteries that imply batteries will save them money when they will do no such thing. It’s no more ethical than a surgeon who performs a life saving operation, takes out a kidney while he’s at it, sells it on the black market, and justifies it by saying the patient has come out ahead overall.
Footnotes
- Not an actual guarantee. ↩
- Potentially available. If you’ve ordered one, let me know how long it takes you to get it. ↩
- It is possible a salesperson could incorrectly believe their batteries will save money and so technically not be lying. It is possible their boss has filled their head with nonsense. But no battery company can claim ignorance as an excuse for lying. The people running the company have a responsibility to ensure their sales people tell the truth to customers. ↩
- People whose solar systems are export limited can be an exception and batteries may provide an environmental benefit when used by them. ↩
About Ronald Brakels
RSS - Posts
Thanks for sorting out the facts from the sales talk. I thought batteries might be of value but then when i read your info i realise that would only be during a prolonged electricity outage. Then i read that a generator which i have, would be cheaper!!!
Don’t have to be an Einstein to work out the truth about batteries!!!
PS Would getting a switch in my meter box to plug in a generator be a good idea?? Around $3-400 cost approx.
Because a sparky will often have to change loads around so that only essential loads are powered by the generator to ensure it doesn’t get overloaded, if you can get a switch that will cut your house off from the grid and let you run it off your generator for three to four hundred dollars, that would be a good deal in my opinion.
Whether or not it is worth it depends on how often you have blackouts. Some people are happy enough to just have their generator outside and use an extension cord to power appliances.
What is your opinion on thee use of nickel-iron bateries for solar storage?
In my opinion, properly designed nickel-iron batteries are the most reliable form of battery storage available – for people who don’t have a problem completely replacing the electrolyte when required, after hopefully many years of use. Most people consider the economics of lead-acid to be better for off-grid use. On-grid I’m afraid no battery chemistry can pay for itself at the moment. Personally I think lithium or potentially other chemistries will be a lot cheaper in 5 years, so I’m not sure if it makes sense to buy batteries now that can potentially last for 50+ years, but nickel-iron certainly has its fans.
The claims made about Nickel iron batteries are almost as outrageous as the claims made about batteries saving money. I urge you not to believe the sales talk put out by the 2 main dodgy US vendors and instead read the actual specs published by the Chinese company that manufactured them.
For some hard facts see this YT vid by one of our NZ friends
https://youtu.be/QrAwI7SxLh4
BTW different John to the other one in this thread!
Well, I can’t think of any applications off-hand where nickel-iron batteries would be the best choice, apart from, “Person wants nickel-iron batteries.”
There’s a lot of nickel-iron batteries still in use in the States. The original battery was developed by Thomas Edison more than 100 years ago and started selling in 1901. Thomas Edison’s Orange, New Jersey, battery factory was sold to Exide in 1972, then the dirty corrupt suits at the top ran the company into bankruptcy. The Chinese acquired the technology at a fire sale, and their battery product is now called the Edison. Just another example of American corruption at its finest while our wonderful bloated government shills look the other way.
I’m still a bit confused here. I’m trying to work out if batteries are feasible in my situation.
I use an electric car and charge for 5 hours every night @ 2350 watts = 10 kWh/day (with some variations up & down). As is usual with electric cars I (mostly) drive during daylight & charge at night.
I am not especially clued up on solar or batteries, but I would have thought it would make sense to install a battery in this situation.
What are your views?
I’m afraid storing surplus solar electricity in a battery and then using it late at night instead of off-peak power won’t pay for itself. Currently batteries can’t pay for themselves when used to provide peak power for normal households. Currently, if you are not home during the day, you are far better off getting a 10 cent feed-in tariff for sending solar electricity into the grid during the day and paying for off-peak electricity to charge your car at night.
Ten cent or higher feed-in tariffs are now available in Queensland, NSW, Victoria, and SA.
You may be interested in AGL scheme where they let you charge your car at home for $1 a day. This may not actually save you much money depending on what you pay for off-peak electricity and it’s only for 12 months, but you may find it worthwhile:
https://content.agl.com.au/energy/electric-vehicle-cost-to-run/
Ronald is right – the problem with stuffing 10kWh offpeak into your car batt is that only equates to about a $1 in savings per night. But if you’d sold that same energy back to the grid you’d have made about $0.60 so the net gainis only 40c per night. If the batteries were 100% efficient which they aren’t – you’ll lose at least 10% in conversion and storage whick means you only save 34c per day. Plus if you want to use some of that energy for peak consumption you probably need a minimum size battery of 20kWh – you won’t even save the additional capital cost of installing a larger battery. Or even the interest you could earn on that additional capital.
I’m in the same situation – did the math ?
I have to disagree with you Ronald on all accounts.
It appears to me as you have these points:
Batteries do not pay for themselves,
Batteries are bad for the environment and,
You will save more and do better by the environment by installing more solar panels or buying someone else solar panels.
Firstly, certain batteries will pay for themselves.
I want to ask you a question: What is the price of power when the grid is down? What if the grid is down during the day and your system cuts out because it has no sync? Valuable power is being wasted here. You might say, buy a generator, however this generator will only be used a few times a year and I thought we were also trying to save the environment here…
Put simply, the battery is more economic because it allows you to save money everyday, which a generator doesn’t (not even accounting for fuel costs) AND it allows your system to function normally even when the grid is down. In my opinion, that in itself is priceless.
Furthermore, batteries are good for the environment and installing more solar is better.
Battery production is large-scale and resource intensive – I agree with you there, however per kWh of storage or per $ of the batteries cost, it is negligible compared to most other items you can buy or the dirty power plants.
If that argument fails to satisfy, then think about this: If instead of buying batteries we put on more solar, the need for fossil fuel generation is going to dip below the baseload pretty fast. However baseload cannot be turned off because it is needed at 4pm when the sun starts to go down. So instead of storing our solar, it would be feeding into the grid and not reducing emissions at all because the baseload coal is still producing.
Batteries are good for the environment because they prevent this.
Actually fossil fuel power stations *can* vary their output. AEMO schedules their output on a 5-minute basis. And electricity is shared around the eastern states too. So electricity you feed into the grid *does* directly reduce the amount of power from centralised power stations.
http://www.abc.net.au/mediawatch/transcripts/1234_aemo2.pdf
Even if they do, running them at lower-than-rated outputs would reduce their efficiency. Also I didn’t say solar generation doesn’t reduce demand from fossil generation, I said it doesn’t reduce emissions.
I think you missed the point – the article has no problem with you or anyone buying batts for the environment. It has problems with people selling batteries and solar together and talking about the cost savings when those savings are actually being made by the panels and not the battery. At the moment the payback time for rooftop solar is between 5 and 10 years. The payback
on a battery exceeds the warranty of the battery. If the salesman is honest he will point out the benefits of running a battery (environment, emergency power) but they should also point out that they don’t save you money.
If the salesman is honest, he’ll point out that the battery doesn’t directly benefit the environment (in most situations anyway). Their benefits are more long-term, by supporting the battery industry that’ll be important later, when renewables are a higher percentage of generation.
I don’t think their efficiency suffers much when they reduce output:
“Sliding pressure operation of the steam generator allows the power plant to generate electricity without much deterioration in fuel efficiency at part load operation up to 75% of the nameplate capacity.”
https://en.wikipedia.org/wiki/Load_following_power_plant
Solar generation *does* reduce emissions.
Hey Ronald, love your columns. You blokes down in the Land Down Under can bash Donald Trump, but he won by a landslide even with the corrupt HRC Bilderberg elitists still trying to stuff the ballot boxes. American cities have been destroyed so that a Chinese middle class could be built. Almost all of our manufacturing is gone. Trump wants a level playing field, and that means the ChiComs which the elitists put in power in 1949 with Mao Sedong are going to have to play fair, or there will be war. I’ve seen Americans say that they fear Huawei and Chinese companies, but that is only because the Chinese tax rates and subsidization is much different than here in America, and that is due to the stinking leftists. I hope Donald can deliver, for there are many, many government shills for the globalists like Ryan, McConnell, Pelosi, Brown, Deblasio, Reid, Romney, Shumer and many others. Maybe its 1930’s repeat all over again, who knows. The leftists over here have destroyed the public school systems and polluted the p.c. landscape with gender and bathroom issues, while the young boys barely know how to do anything — basic math, mechanics, etc. No, no, no, Trump is liked by the common blokes over here Ronald, and his latest salvo in getting out of the Paris agreement is a welcome move. Sorry, but American taxpayers are not bearing the burden. How about Australia pay $3B a year to Israel or to the U.N. to start things out??? Yeah, how about it. Sorry that the Rothchilds, Soros, HRC, Obama and the rest of the leftists scum don’t agree, but we’re sick of it over here. You see Ronald, with another leftist win, my country would have been history. Trump is for MAGA and putting Americans first — not Chinese, not Indians, not Mexicans, not Australians. My country’s cities like Detroit, Hartford, Jacksonville, Chicago, Cinncinatti, and many, many others have suffered under the dirty elitists globalism promise for 50 years. You bash Trump, but the mess the leftists left behind is “yuge” as you say. Leftists destroy the economy and spend all the people’s money until there is nothing left but huge masses of people on welfare and foodstamp rolls like we have now in my country (look at Cuba, Venezuelas, East Germany, North Korea — it doesn’t work). You want to play the con story, then start with a Weatherman traitor in the Whitehouse like Obama being stuffed by Ayers, then the corrupt dirty Clintons, Bushes and the rest of the Bilderberg scum. Trump is an American, and I don’t like Trump bashing without putting some history behind it first. Stop drinking the Kool-aid and understand what the globalists are truly doing under the Kissinger, Brezinski, Soros agenda. They don’t care about global warming — it’s all about scarcity and taking away freedom and controlling power and taking it away from the commoners until they’re living in the dark. Trump is a hero here, and the elitists don’t like it. I just hope he isn’t another JFK, because then militias in my country will rise up. It’s best you hear this from an American who voted for Donald, Ronald, and I’ll understand if you don’t print this political hot air, BUT you started it.
Won by a landslide? Not if you look at the popular vote…he actually lost. You really should see someone about the conspiracy theories In your head. And if you think people like the Koch brothers aren’t controlling your agenda, then you have real issues. Let’s see in 4 years if he has “made America great again”
Popular vote? Please!!! Whose popular vote are you looking at? Carlos Slim NY Times? Bezos Washington Post? Gates MSNBC, Rockefeller globalist ABC, CBS, NBC, CNN (Clinbton News Network)? Sure, Koch Brothers are with the globalists; they tried to kill solar in Florida on Amendment#1 and barely failed. Conspiracy theories….ha,ha,ha, you’ve exposed your education. Where did you get that from? The fake news gave you that term. People always label pundits as kooks to ward the sheeple away from the real issues. Move along, nothing here folks. Look, the enemy of my enemy is my friend, and we both want energy freedom, right? Decentralized power is the way; solar and storage can help us get energy freedom. Cheers.
Hey TJ – I’m confused. Nowhere did Ronald mention Donald Trump? He mentioned Ronald Trump a completely unrelated and fictional battery salesman. And what problem do you have with “lefties”? I’m right handed myself but I understand approximately 10% of the population are left handed but you seem to hate all of them. In fact you seem to hate a lot of things. It must be hard going through life so angry. You should come to Australia – we’re a lot more relaxed down here. Unfortunately we do drive on the left hand side of the road, but if you lived here you wouldn’t be angry about that.
Does EVERYTHING have to pay for itself? Apparently in the authors eye it does. The choice of a battery bank gives you many other benefits that you cannot put a price on. One of the biggest problems with the capitalist society is that if you do not have a “payback” then somehow it is not worth putting your money into.
That is truly a sad state of affairs. People buy many things that have a ZERO payback or simple never will have any type of payback.
Paying a utility bill for the rest of your life certainly has no payback does it? You buy nothing and thus own nothing. Choosing a battery bank such as Nickel iron or a lithium battery that has a 10 year warranty and has 10,000 to 11,000 cycles certainly is a good deal in the long run. In 10 years or so a battery pack will look like an appliance and cost will be of little concern. But you know what? Energy independence is priceless for more than one reason.
Ronald covered that point. “I have no problem with people buying batteries that won’t save them money if that is what they want to do.”
If you’re talking about going off-grid, that’s another issue – this post was specifically about on-grid batteries.
John,
Ronald very clearly says:
“I have no problem with people buying batteries that won’t save them money if that is what they want to do”
That sounds like you. Good on you. There are lots of reasons to buy batteries – as you point out – saving money is just one of them.
The problem is when companies try to mislead customers who want to save money by using blended payback.
Best Regards,
Finn
We have a 5.75 kW Enphase system based on its production performance the calculated payback is 5.5 years. We also purchased separately a 1.2 kW Enphase Storage Battery [to gain experience with its performance]. What it saves in energy has a calculated payback of 34.5 years. That is 24.5 years beyond its useful life expectancy. Now for the blend if I add the savings of the PV together with Storage and then divide that amount by the total system cost the payback becomes 6.7 years. More than happy to provide a copy of the data on request that supports those calculations. And the moral of the story ‘If you let a salesman piss in your pocket you get a nice warm feeling which does not last for long’
I am someone who has money ready to buy a battery as soon as I can find someone who can give me the specification I need. I am doing this despite the fact that I know (as Ronald points out), this investment will fall well short of the economics that can be justified by future electricity cost savings. But I am doing this with a full understanding of the economics. In my personal “justification”, I am only looking for 1/3rd of the cost to be justified through future electricity price savings, and the other 2/3rds justified through my own personal circumstances (running a IT business from home, where we have a LOT of blackouts and in a lot of cases a generator is not the most practical solution to the problem…eg nowhere I want to place a noisy smell generator and will not cut in fast enough to keep servers up, so need some battery anyway). But if I take a hard nose look at the numbers for “payback” of batteries from electricity savings alone, even though I only need to justify about 1/3 of the cost, and even though I probably am better placed get this payback than a lot of people (ie high electricity usage in peak times when sun is not up, and living in NSW TOU metering), I would struggle to justify it if I needed to pay for more than about 1/3 for all the reasons Ronald outlines.
To defense of Ronald, I don’t think he is in any way suggesting you should not buy batteries. But he is trying to educate, and VERY sensibly debunk some of the miss information that is being spread by a lot of vendors, sales people and all too often lapped up by the media. If you want to buy batteries, and have reasons for doing it, go ahead and buy batteries. We do need early adopters to develop and refine the technology, and in time this will drive the price down. And if you have a way of justifying that to yourself, so much the better. But it certainly should not be done on the basis of an economic justification that does not stack up, and this is what Ronald and others are fighting against.
As a case in point, my 80 yo father has had multiple proposals from solar battery installers who have told him he will save money, and each time was ready to sign until I did some education with him to point out the rather simile fact Ronald has outlined. I have even spoke to the installers, and they continued to try to convince me that there was a payback!! Usually they will give no numbers to back their wild assumptions, or if they do, the assumptions are totally unrealistic. Interestingly, none of these proponents used “grid down” as justification. I assume this is because 1) for most people this is pretty rare, and not that much of an issue, and 2) a lot of the setups they are selling in this space will not provide power in grid down anyway.
I am a big believer and batteries, and think they will play a very important role in the energy mix, and help us solve the problems created in the transition from fossil to renewable power. But I don’t think it helps the cause to claim economic cost justifications, and exaggerated paybacks where it is not realistic.
I don’t think Ronald has anything against people who want to buy batteries, or even suggesting that everything has to pay for itself. Just that if someone makes a claim about payback time, those claims should stand up to some form of basic scrutiny.
Keep up the good work Ronald and Co.
Now that’s a proper case for a battery. To size it properly you just need to work out how much power the essential equipment needs to run – so your servers, internet connection, fridge, lights and monitors etc. Then work out what the maximum amount of time you could be down for. Then its just math. Say your essentials draw 3kW – thats a lot but servers can be power hungry. Refrigerators don’t run continuously but when the pump switches in thats a very high inductive load so you need a battery and inverter system with plenty of power overhead – say 50% or 4.5kW. So say you want to cover the grid being down for 3 hours then a 10kWh battery should suffice. You’ll also need an automatic switch and a sparky to wire in only the essential circuits to that backup system.
Essentially you are building a large UPS. Rather than investing in additional capacity you might consider a genny to keep the battery topped up if the grid goes down for longer at night. The battery will act as a buffer and supply clean power to the system.
To calculate your own needs read your meter and then run only those essentials for a couple of hours, read it again and divide by two or invest in kill-o-watt meter and total up the actual usage.
There are two ways of accessing the efficacy of batteries. One school of thought is the savings they generate should be expressed as the number of years to pay back the capital. This calculation is commonly referred to as ‘Payback in Years’. The argument that follows is the payback should be less than the period of the warranty aka useful life. The other school of thought is ‘Return of Investment [ROI] where the capital produces a better Tax Free return than if the money was invested in any other risk free investment. Ok the first example for a 1.2 kW Enphase storage battery with an hourly charge and discharge rate is 240 watt-hours or 60 watt-hours per 15 minute timed interval. If the anytime tariff is .27072c kWh and the Feed in .07448 then the kWh value of storage per kWh discharged is 0.19624c. But that is not the end of the calculation because for every kWh stored you loose approximately 15.59% available to discharge. Ok so the numbers in the last twelve months with a 1.2 kW Battery we stored 385.14 kWh <= 1 charge to <= 1 charge. In the same period the battery contributed to consumption 325.08 kWh <= 1 charge to <= 1 charge a loss of 60.6 kWh 15.59%. At a value of 0.19624c kWh the savings on 325.08 kWh was $63.79 in 12 months. And the value of the lost energy at the same value was $4.47. Given the battery cost $2,200 divided by the savings $63.89 then the payback is 34.5 years [rounded]. Now for the second option if you had $2,200 invested in a government guaranteed fixed term deposit [risk free] with a Major Bank the current rate would be around about 2.00% PA or $44.00 less PAYE Tax at 32.5% net gain $29.70 or 1.35% on the sum invested. Ok if you purchased a battery for $2,200 and it reduced your cost by $63.79 PA then the ROI on that investment Tax Free would be 2.85% compared with 1.35% you would be 1.5% better off. If you are a pensioner and the capital is assessed at the deeming rate then that creates yet another method required to calculate the ROI.
That is just so wrong. For a start your gov bond is a low interest rate because of security – you could invest in the share market and exceed that value by a lot. And it wouldn’t be any riskier than a battery which is guaranteed to depreciate substantially over its warranted 10 year lifespan. Depreciate in capacity and value. Good luck selling your second hand battery for even 30% of what you bought it for. Meanwhile the pensioner (even allowing for inflation) still has the majority of his gov bond capital intact. To sell to the poorest section of the community on that basis would be unethical. IMO.
Here’s another crazy claim on FB
https://www.evergen.com.au/solar-batteries-quote/?utm_source=facebook&utm_medium=social&utm_campaign=paid&utm_content=201704
Should look at this one Ronald – you could save 80%!
It is important to consider the effect of batteries on consumption behaviour. I’ve just ordered a powerwall2, and for us, I imagine that a battery would turn our power consumption into a game, and motivate us not to over-consume power in the evenings in an effort not to start drawing from the grid. In addition to paying for 100% green power for environmental reasons, I think that the battery will actually pay itself off.
These are not the only issues to consider when it comes to storage 1] You have enough surplus Solar production to charge the batteries during sunlight hours at the regulated charge rate. In our case it is 240 watts-hours. 2] The loss of energy which for us for every 1 kWh stored we get back 850 watt-hours. 3] The consumption rate should preferably be is less than the regulated discharge rate of the battery which in our case is 240 watts-hours. Whilst the battery might have storage available if it cannot deliver then the balance will be imported from the grid. The time interval 3-9pm is a critical issue if you have subscribed to a Seasonal Demand Charge Tariff. And during a period of high demand a Time-varying Feed-in Tariff may need to be ruled in or out when considered as an optimisation option. Details about Time-varying Feed are published elsewhere by SolarQuotes.
Charge and dischsrge rates are measured in watts or amps not watt hours..
Not according to MyEnlighten who choose to report it in kWh more than happy for you to do the conversion.
A Watt hour is a measure of power over an hour. Charge and discharge rates are measured instantaneously – in other words how much power can be absorbed or delivered at that moment. Watt hours for a battery are a measure of capacity. If your battery can only charge at 240W per hour (which I don’t know because the measurement only makes sense when time is part of the equation) then it can only charge and disharge @ about a quarter of a kW. And that is the real issue with the Enphase AC battery. In fact a single Enphase battery won’t power anything much more than lights, mobile phone chargers and a very small PC, a TV – but not all at once. It certainly won’t power an electric kettle. What’s more it can’t absorb much energy from your panels. So the rest of your power gets exported back to the grid. A single 250W panel at peak power is as much as a single battery can take. If you buy multiple Enphase batteries I estimate you would need at least 10 to give you a more useful 2.6kW continuous power. It also takes over 4 hours to charge each battery at max charge rate.
Enphase offer an outstanding warranty but they can only do that because they keep it to about .25C (capacity) in and out. Nearly all LiFePO4 (any chemistry for that matter) batteries will last longer at reduced charge and discharge rates.
Other similar batteries offer charge and discharge rates up to 1C or higher, with warranties approx half as long.
Very topical. I just got sent spam email from solar installer showing 187% ROI on battery install after 10 years, which to me sounds pretty good. But the assumptions they use to come up with this are :-
$12,000 install
6.5kwh Capacity of battery
10 year Warranty
26c Price of peak power
20% Inflation per year
1.5 Battery Cycles per day
After all this they come up with “Return Cumulative” of $22,428
Problem is :-
1. No reduction in saving for sacrificing FIT
2. 1.5 cycles a day look HIGHLY optimistic, and suspect most people will get less than 1 cycle per day.
3. They have not taken into account the decay in battery capacity over time.
4. You can bet your bottom $ that market will not sustain 20% price rises every year for a whole range of reasons.
But hey, why let realistic assumptions get in the way of a good story.
Also a little concerning that they also seem to be targeting retires, with claims “Many of our customers who are getting batteries are people who have retired or nearing retirement and trying to keep their long term expenses down”. Very kind of them to attempt to relieve them of the inconvenience of their nest egg for unrealistic ROI.
Interesting this was install referred to me a long time ago by Solarquotes for an install. So I go to look them up on Solarquotes today to see their ranking. Sure enough, they are not on the leader tables any more, and Solar Quotes has them as going into administration 2016. Looks like someone has phoenixed the company, but not honoring any warranty’s etc. So if anyone had a look at this company on Solar Quotes, it is unlikely that anyone would buy from them, So not surprising this sort of company is happy to make some misleading claims.
Keep up the good work Solar Quote with a place to track reviews and status of this sort of company.
It’s now 18 months since you wrote this article Ronald. Any change?
I’m a self-funded retiree and 5 years ago stayed off getting a battery with my PV system.
My biggest use of energy is during the night, keeping the aircon going whether cooling in summer or heating in winter (reverse cycle).
How about some examples of aircon electricity costs summer and winter vs it coming off a battery that has been charged during the day?
Thanks!
I’m afraid that unless you are in South Australia and can get that state’s hefty subsidy batteries won’t pay for themselves yet for any remotely normal household. But between further falls in battery prices, benefits from joining a virtual power plant, and a potential $2,000 federal subsidy at the start of 2020 if Labor is voted in, it may not be too long before they start to pay for themselves.
I agree 100% that when solar companies are talking to customers(THAT ALREADY HAVE SOLAR) about battery storage they should inform them of the payback period(based on savings compared to cost) and let the customer decide if they would like the benefits of adding this to their solar power system.
I’m afraid “little old ladies” and struggling families are not the target market for this product, and companies should be ethical enough to provide the right information about the savings or lack thereof when adding battery storage. There are other benefits, but this group of people are not in a position to take advantage of them(yet).
Battery storage is great for people with high incomes, plenty of disposable income, little or no debt, own expensive homes and cars are not struggling, and wouldn’t blink at spending 10k on a Samsung HD tv. There are lots of those in Australia:)
Where the author has got it totally wrong – Blended Payback Period
With the introduction of home battery systems, consumers now have an option to purchase a COMPLETE ENERGY SYSTEM. That means solar panels PLUS battery storage. THESE SYSTEMS ARE NOT SOLD SEPARATELY, THEY ARE SOLD AS A COMPLETE ENERGY SYSTEM!
Therefore, total generation of both the solar and battery units should be calculated and added together to work out the PAYBACK PERIOD(based on price of the COMPLETE ENERGY SYSTEM).
“Disclosing solar and battery PAYBACK PERIODS independently”
As stated above, we are not selling one without the other, but let me entertain the author.
“Mr. customer your payback period for solar panels is four(4) years(6k system,$1,500 savings/yr)and your payback period for battery storage is ten(10) years(10k battery, $1,000/yr)”
“So Mr.Solar Man, after 4 years i would have paid off my solar power system and paid 4k of my battery?”
“yes Mr. customer”.
“Mr. Solar man, does that mean i can use the solar savings PLUS the battery savings totalling $2,500 to pay off my battery(6k) in the next two and a half years?”
“Mr. customer, i would assume that that is how it is done, but i don’t want to get in trouble. Let me talk to Finn Peacock and i will get back to you”:)
Conclusion
“Headlines” that say battery storage will save you money are not entirely accurate UNLESS pricing comes down to the 5-6k mark.
“Blended payback” is the right way to calculate for COMPLETE ENERGY SYSTEMS
There will always be dishonest people in this industry but the majority of the people are honest hardworking individuals.
To brand anyone that differs from the authors view that calculates “blended payback” a “crook” “cunning” “dishonest” is disappointing to say the least and am happy to discuss this with the author in private or an open forum.
I have no problem with explaining to customers the individual paybacks and “blended” paybacks and let them decide if they want to generate,store,consume their own energy 24/7.
Lets empower the solar industry, not destroy it with negative garb.
Sorry George Dion, I don’t buy this.
Why make something simple complicated. Adding a battery to solar is not likely to save many people any money until things change. That is the simple bit, and no amount of bundling it with solar changes that. Bundling it with solar and pretending it is somehow a “complete system” and that somehow changes things is fascicle. Facts are that as far as I know there is no “Complete Energy System” sold that could not be sold without the battery and offer superior savings and payback. If batteries where such an economic miracle, there would be plenty of people selling them to people without solar, and I would be buying a bunch of them (hell…my off peak rate is less than my solar FiT so for me it is better to export all my solar and charge from the grid anyway). But guess what, that would be even more difficult to justify because you have nowhere to hide the fact that the battery costs money, because you have no solar savings to hide it in. So guess what, no one is spending much time trying to sell batteries to people without solar.
There are good reasons to buy batteries and for this reason I have spoken to many sales people about solar and batteries. And of all the different spiels I have had, the one you outline is not one that I even had (ie battery does not save you money…but it is ok….because you can use the savings from solar to pay for it in the fullness of time and if you don’t mind giving your solar savings up to pay for it). Broadly they seem to fall into 2 different categories :-
1. Solar installers who will quite happy tell you that although they are happy to sell and install you a battery, they will highlight correctly that it is unlikely to save you money.
2. The sales person that tries to trick you with the blended payback, or even worse some payback figures that do not taking into account the factors that will undermine it to make it look like you will save lots of money. Often they will show you case studies of the guy in western Sydney who cut his $6000 electricity bill to just a couple of hundred $ to back it up (probably with an attached news paper article or a link to a poorly researched ACA story), but fail to mention that the guys also got solar and completely changed his usage profile which was the real reason for his savings on not primarily the battery.
And contrary to your claim this is only used to target “high incomes” is not born out as these people have target a number of people I know personally that do not fit this category, and instead fit in the the vulnerable category, but no doubt also the “easier target” category.
I am sorry, as soon as a sales person hears a customer talking about wanting a battery to save money, I believe they have an ethical responsibility to highlight as Ronald is trying to do that this is not going to happen (of course there are many people who have more flexible ethics than me and I accept that). I suspect they also have an Australian Consumer obligation, to do this, as under Australian Consumer law the seller is obliged to not misrepresent the product and arguably the consumer would be entitled to a refund if there are false or misleading claims made about the product at the time of sale. Now you could argue that forgetting to tell someone that the solar is where the savings come from, and in fact the battery will only undermine those savings, is ok, because you have not told them a lie about the “blended payback” of your invented “COMPLETE ENERGY SYSTEM”. And god knows, maybe in court with a bunch of expensive lawyers you might even win this one. And you might even be able to convince a bunch of used car salesmen that this is reasonable. But I don’t think it passes the pub test, and I think most people who understand it would think it is a slimy sales tactic to sell something for which the consumer might have better options available.
It is twisted logic to claim that it is sensible once you have recouped your money for the solar component of the system, to then give no value to the fact that it will still produce power and deliver savings, but instead give the value away to payback the battery which is only costing you money. If you think this is logical, if you have any capital gain on any shares or property you have ever sold, maybe just give that capital gain to your broker / estate agent or bank to help them, rather than keep it for yourself. Hell if you are embarrassed to give that back to the bank or whoever, let me know and I will gladly accept these unnecessary funds from you.
Finally for your argument to stand up, the sales person does not even need to sell a battery. All they need to do is sell solar at twice the reasonable market price for a reasonable solar system. Because it is a “COMPLETE ENERGY SYSTEM”, and the consumer might still get a payback in 8 years instead of 4 years it would have taken if they are paid a reasonable price, it is still saving them money on a system that still has a 25 year life!! Would this be a reasonable and ethical thing to do??? But like your battery “COMPLETE ENERGY SYSTEM” there will be sales people that do that to the unwary consumer. But that does not make it an ethical thing to do.
Again, why make something simple complicated. There are lots of perfectly good reasons to buy a battery (eg blackout protection, or even doing your bit to help support the development of things we will no doubt probably need to make the RE transition), and even some pretty good, but arguably trivial reason to buy a battery (ie loving cool tech toys, or sticking it up the man, or warm fussy feeling of using ones on solar power rather than exporting and buying it back later). So if you value some of these reasons (as I do) then a battery is no doubt for you and the economics become way less important. But if someone is interested in the economics, I have to ask who you would be afraid to say it like it is, and feel the need to somehow cover up the fact that at current battery prices, and with current battery longevity, and with current electricity prices, the battery is unlikely to save money for many people. Now maybe the answer is you need this for your own justification of your own battery purchase (in which case good for you)? or maybe it is because you are the sales person selling it to people and want to justify your own actions? And hey, salesmen sell people stuff they don’t need all the time, so I can’t really be any harder on you than any other sales person doing the same thing. But I don’t think you are doing anyone a service by trying to undermine Ronald and Finns attempts to bring greater understanding to the market of this issue.
This was my first statement,
“I agree 100% that when solar companies are talking to customers(THAT ALREADY HAVE SOLAR) about battery storage they should inform them of the payback period(based on savings compared to cost) and let the customer decide if they would like the benefits of adding this to their solar power system.”
Ronald’s scathing opinion re companies misrepresenting the truth about savings in relation to battery storage, is well justified(good work:)
As far as your reply goes, you only made sense in the last paragraph.
“There are lots of perfectly good reasons to buy a battery (eg blackout protection, or even doing your bit to help support the development of things we will no doubt probably need to make the RE transition), and even some pretty good, but arguably trivial reason to buy a battery (ie loving cool tech toys….”
Precisely what i was highlighting sir.
“A complete energy system is solar panels” Now that is a “farcical” notion.
So, in your opinion, the ability to store energy for later use or the ability to power your home in a blackout scenario, is not considered important enough to be considered a part of our “energy system”?
“Blended Payback”
We get it sir.
Batteries on there own will give you a longer payback period than solar.
No argument there sir and if unscrupulous vendors are telling “little old ladies” with dementia, or pensioners with a $150/quarter power bill or a struggling family living week to week that a 10k battery is going to save them money, they should be shot!(well, you know what i mean).
Lets look at the two scenarios:
1/ Retrofit battery(existing solar)
The numbers will vary depending on retail price. Lets say a 10k retrofit has a 10 year payback(1k/year savings). May be up/down by a couple of hundred dollars).
With Vic. Gov Rebate(up to $4,800) that may potentially halve.
“Mr. customer, this is the scenario. If you pay the full price, payback could be ten years or more. What is important to you? Is it the savings or the ability to power your home 24/7? and/or blackout protection?”
“Mr. solar man, i just spent 15k on a Samsung HD flat screen top of the range tv, and i don’t think i will ever get my money back, hahahahaha! What do you think ?”
“Just sign here sir”
Or
“mr customer, you’ve had your system for five years and paid it off. The battery will cost 10k and will give you $1,000 or less per year in savings and take up to ten years to pay off. Looking at the battery on its own doesn’t make economic sense but you may still want the other benefits it provides i.e blackout protection and your home runs autonomously day and night. Your solar power is currently saving you $1,800 per annum. Do you understand this?”
That is total transparency and the consumer gets to decide whether they want this or not.
From a personal perspective, i have a 4.7kw solar power system installed 2012. Own it outright. Now, i want a battery. I want to have the ability to run my home day and night and the technology is here. Yes, i will put back buying the latest HD tv or the jetski or the home theatre system and make this a priority. It’s my home and i want a “complete energy system”, not just daytime solar(boring:))
2/ Solar plus batteries – “the blend”
Lets see if logic will prevail.
When you receive a quote from a company it will outline what you are purchasing and they will state a price. Let’s say 14k for the whole system.
In this scenario, why wouldn’t you calculate the whole generation from the solar and the battery, since you are buying these as a package?
“mr. customer, your savings from the battery is $1,000 per year, savings from solar is $1,800 per year, totally $2,800 per year. Based on 14k purchase that is a 5 year payback period”.
a/ The customer has invested 14k in total for solar and battery
b/ The customer is saving $2,800 from both sources
c/ The customer is given the break down of both sources
d/ Adding the battery will give the customer what they want ie some control over their power
Mathew, this is the most transparent way to deal with a consumer. Give them the right information ie the truth and let them decide based on their needs and financial situation.
Is this a “slimy sales tactic sir?”
In closing, i’m not trying to undermine Finn Peacock and we commend his efforts in bringing important information to the solar public for the last ten years or so:) I think he is wrong on certain points and logic has to prevail sometimes. It’s not just black and white.
I believe we are on the right track on the most important issue here ie honesty and transparency for the consumer( i was told by a salesman two days ago that Link panels were manufactured in Melbourne-Finn would’ve loved talking to this guy:))
Forgot to address this sir.
You wrote:
“Finally for your argument to stand up, the sales person does not even need to sell a battery. All they need to do is sell solar at twice the reasonable market price for a reasonable solar system. Because it is a “COMPLETE ENERGY SYSTEM”, and the consumer might still get a payback in 8 years instead of 4 years it would have taken if they are paid a reasonable price, it is still saving them money on a system that still has a 25 year life!! Would this be a reasonable and ethical thing to do??? But like your battery “COMPLETE ENERGY SYSTEM” there will be sales people that do that to the unwary consumer. But that does not make it an ethical thing to do.”
So the “ETHICAL” thing to do is sell someone a 4k “complete” energy system for 8k.
So ripping someone off for 4k is “ETHICAL”?
Is this what you do sir? Find the “unwary” consumer and slug them another 4k for a “reasonable” solar system?
Doesn’t make sense sir.
This was my first statement,
“I agree 100% that when solar companies are talking to customers(THAT ALREADY HAVE SOLAR) about battery storage they should inform them of the payback period(based on savings compared to cost) and let the customer decide if they would like the benefits of adding this to their solar power system.”
Ronald’s scathing opinion re companies misrepresenting the truth about savings in relation to battery storage, is well justified(good work:)
As far as your reply goes, you only made sense in the last paragraph.
“There are lots of perfectly good reasons to buy a battery (eg blackout protection, or even doing your bit to help support the development of things we will no doubt probably need to make the RE transition), and even some pretty good, but arguably trivial reason to buy a battery (ie loving cool tech toys….”
Precisely what i was highlighting sir.
“A complete energy system is solar panels” Now that is a “farcical” notion.
So, in your opinion, the ability to store energy for later use or the ability to power your home in a blackout scenario, is not considered important enough to be considered a part of our “energy system”?
“Blended Payback”
We get it sir.
Batteries on there own will give you a longer payback period than solar.
No argument there sir and if unscrupulous vendors are telling “little old ladies” with dementia, or pensioners with a $150/quarter power bill or a struggling family living week to week that a 10k battery is going to save them money, they should be shot!(well, you know what i mean).
Lets look at the two scenarios:
1/ Retrofit battery(existing solar)
The numbers will vary depending on retail price. Lets say a 10k retrofit has a 10 year payback(1k/year savings). May be up/down by a couple of hundred dollars).
With Vic. Gov Rebate(up to $4,800) that may potentially halve.
“Mr. customer, this is the scenario. If you pay the full price, payback could be ten years or more. What is important to you? Is it the savings or the ability to power your home 24/7? and/or blackout protection?”
“Mr. solar man, i just spent 15k on a Samsung HD flat screen top of the range tv, and i don’t think i will ever get my money back, hahahahaha! What do you think ?”
“Just sign here sir”
Or
“mr customer, you’ve had your system for five years and paid it off. The battery will cost 10k and will give you $1,000 or less per year in savings and take up to ten years to pay off. Looking at the battery on its own doesn’t make economic sense but you may still want the other benefits it provides i.e blackout protection and your home runs autonomously day and night. Your solar power is currently saving you $1,800 per annum. Do you understand this?”
That is total transparency and the consumer gets to decide whether they want this or not.
From a personal perspective, i have a 4.7kw solar power system installed 2012. Own it outright. Now, i want a battery. I want to have the ability to run my home day and night and the technology is here. Yes, i will put back buying the latest HD tv or the jetski or the home theatre system and make this a priority. It’s my home and i want a “complete energy system”, not just daytime solar(boring:))
2/ Solar plus batteries – “the blend”
Lets see if logic will prevail.
When you receive a quote from a company it will outline what you are purchasing and they will state a price. Let’s say 14k for the whole system.
In this scenario, why wouldn’t you calculate the whole generation from the solar and the battery, since you are buying these as a package?
“mr. customer, your savings from the battery is $1,000 per year, savings from solar is $1,800 per year, totally $2,800 per year. Based on 14k purchase that is a 5 year payback period”.
a/ The customer has invested 14k in total for solar and battery
b/ The customer is saving $2,800 from both sources
c/ The customer is given the break down of both sources
d/ Adding the battery will give the customer what they want ie some control over their power
Mathew, this is the most transparent way to deal with a consumer. Give them the right information ie the truth and let them decide based on their needs and financial situation.
Is this a “slimy sales tactic sir?”
In closing, i’m not trying to undermine Finn Peacock and we commend his efforts in bringing important information to the solar public for the last ten years or so:) I think he is wrong on certain points and logic has to prevail sometimes. It’s not just black and white.
G’day George.
Lotsa people are labouring under false assumptions. Any sensible argument needs to be based upon agreed definitions.
I’ve demonstrated time and again that stand-alone, battery-powered systems CAN comfortably pay for themselves, even from purely dollars-and-sense (sic) perspective. That has been the case ~ all things considered ~ since I installed my first ‘system’ in about 1980.
It’s even more the case in these days of dirt-cheap components (I paid $13.80 PER WATT for my first ~ second-hand ~ panels. (that’s down to 20 CENTS per watt these days.)
Other than the $’n’c issues (and leaving aside the ‘but if you invested the money at 3% instead’ distractions) the stand-alone principle provides you with endless OPTIONS ~ and that’s worth a lot, but in cash and satisfaction terms.
YOU get to choose your components and ignore the ‘trendies’; eg. proven and relatively cheap AGM* battery-banks as opposed to the ‘power-wall’ crap everybody presumes to push as the ‘only way to go’. It’s NOT. Regardless of the hype, the idea of expecting a ‘consumable product’ to last the umpteen years required to make it a financial proposition is a nonsense… before you even consider the likelyhood that today’s Ferrari will be tomorrow’s horse-and-buggy ~ as soon as next year!
Moreover, there are possibilities other than reliable and cheap deep-cycle (say) AGM batteries. I used to get used 1140AH batteries for free (finished up with a few hundred of them ~ funny story!) discarded by a local industry. Not super-efficient, and needed to be checked fairly often, but lasted between 6 months and EIGHT years. A steal at the price! And when they died I replaced the acid with water and used them as building blocks to erect the best glass-house (walls and paved floor) you ever saw! Two foot (600mm today) of snow on the ground and a temperature hovering around 28 degrees inside.
Imagine how stupid I’d’ve felt if I’d just shelled out ~what? $40k for a power-wall style set-up that would supposedly lasted longer than I did.
Finally (hooray!!) I suggest the comparison must be drawn in realistically-applicable terms. eg. Since solar-panels are so very cheap, it’d even pay (assuming an appropriate environment) to replace a battery-bank with a huge array and a solar-powered pump to push water up to a tank during the day and making use of hydro-power at night. The cost of, say, a large above-ground pool, would be the only major expense ~ and once set up would cost nothing more for years. The other components can be scavenged and/or improvised from stuff we’ve all got laying around in the shed.
Bottom line:- relatively cheap and reliable stand-alone power has not only ALWAYS been possible, but should be an imperative. Reducing usage is also possible, and should be equally as imperative.
Happy to discuss details, here or elsewhere.
George,
I think we might be largely on the same page, and think we agree that it is important the any claim of savings are properly and accurately represented. I assume we also agree that it is important that consumers are not tricked by companies that realise with main stream media support, there is a widely held myth that everyone can save money with batteries. I suspect your assumptions about battery economics are more optimistic than Ronald or mine. And thus you position. I have no problem with a company presenting realistic battery + solar payback figures. But only as long as they are using realistic assumptions, and I believe that this should be presented with the same figures with solar alone. But I believe it is also important that this be presented along with figures that show the return on investment for JUST the incremental battery (which is where I think we might disagree. But lets be real, if economics is the driving factor the options of solar only needs to be presented and green fields or retrofit nothing changes that. If the battery savings are as good as some people suggest, why would you be afraid to present them as such??? If done accurately for each individuals circumstance, it would likely show most end users :-
1. solar is were the savings are, and
2. sure, I hybrid system can also give some sort of return, but
3. the purely economic return on the battery is not there for most people, and if you are doing this purely for economic reasons, there will be better things to do (ie put more solar up).
This is all Ronald I think it trying to highlight, and if companies did this, then they would be help spread an accurate message.
I suspect if the ACCC made it clear that anyone who sold a battery systems supported with a cost justifications that did not play out in reality, the consumer would be entitled to a refund, there would be a lot of spreadsheets that would be very quickly updated or thrown out (or companies looking to make quick $ and run aware with the money before anyone realises). eg the classic bull@#$% cost justification based on the marketing kWh size of battery x cost of electricity x 365 days a year x 10 year battery warranty which is often presented for a PW2 as 13.5kWh * 30c / kWh * 365 * 10 = $14,782 (often adding significant price rises into the future for good measure that not even the forecasters are predicting to help tricking you into buy a battery before it is a good investment in year 1 which would be the sensible thing to do if it was just about economics). This does not taking into any of the real world factors which mean you will NEVER get this. But even ignoring this, even if in some alternate universe you could get this, $13500 up front for something that might give you savings of $14,782 over 10 years and with probably not much usable life after that just does not look like something that would drive a objective, purely economic argument in my mind.
I would like to see the assumptions that underlie your statement “Lets say a 10k retrofit has a 10 year payback(1k/year savings).”, as I doubt many people would really be in a position to make that sort of return on a $10K battery. I suspect there are a lot of real world factors which will undermine much chance of many people being in a position of making that sort of return. Sure there might be a few people in very unique positions that might…eg Jackson with his free batteries and skills, dedication and time to maintain them etc etc, but for most of us it will be different. I have developed a battery simulator, which uses real world solar generation figures, real world consumption figures, and allows you to configure and simulator various different battery sizes, characteristics, play with solar sizing, electricity tariffs, TOU vs fixed etc etc etc etc. It factors in all of the factors that I can think of that come into real world battery economics including offsetting solar FiT you will loose if you charge the battery, efficiency losses, reserves used for blackout protection etc. Also being “real world” solar and consumption data, it factors in the times you will not be able to charge the battery due to bad weather as well as the times that you will not get a return from the battery, because noone is home to use the battery (ie holidays). I personally thought I would be a good candidate to get better economic return out of the battery than your average person because 1) I am a large electricity user with a big house, pool, large AC, and run a business from home and run some power hungry servers 24×4 etc etc 2) compared to average, I would guess my peak usage after the sun has gone down would give me lots of opportunity to use the battery to offset expensive peak usage and 3) I have a very large solar system with a better chance of fully charging the battery on more days despite the weather. However, my real world savings from a Tesla Powerwall 2 would be less than $450 per year. And this does not factor in any cost of capital figures to buy the battery, or the battery degradation that will happen over the life of the battery. I will leave “cost of money” calculations, but if I factor in battery degradation, my savings will be less than $400 per year. Intuitively this was certainly a surprise to me, that my figure was so low. But a detailed dive into the figures looking for the errors, revealed the truth is that it is simply a product of the real world factors wittling away the intuitive figures to a shadow of their former selves. eg things like factor in your loss of solar FiT, the efficiency losses, lower utilisation factors than most people intuitively factor in even if they try etc etc. Different people will have different circumstances, solar sizing, usage profiles and tariffs which will mean everyone’s calculation will be different. And I am happy to share my spreadsheet with anyone who wants it. But I suspect there will be more people whose factors will mean their savings will be less than this, than there will be people who can save more. But to give better context so people can better understand how it applies to them, my calculations above are based on the following assumptions :-
– Calculated savings from a Tesla Powerwall 2, which is warranted for 70% 13.2kWh / day at the end of 10 years or 37.4MWh which effectively means whatever comes 1st (in practice the 10 years is only if you only use solar to charge the battery and 37.4MWh if you use anything else other than solar to charge the battery, but in practice it is probably the same thing because with typical utilisation figures people will generally struggle to get more than 37.4MWh out of the battery in ten years. My savings presented above are based on 13.2MWh capacity (which is too generous because over time degradation will mean that average capacity over the ten years will almost certainly be less than this). I factor in 10% for blackout protection, which should also assist with longevity of the battery.
-Ausgrid NSW TOU plan (see https://www.ausgrid.com.au/Connections/Meters/Time-of-use-pricing for rather complicated TOU times
– Peak/Shoulder/Off Peak/Controlled Load and Solar FiT tariffs of 42.2c/19.2c/11.7c/9.3c and Solar FiT of 12.5c respectively and daily supply charge of $1.06. As would be true to for a lot of people with solar, and almost everyone with a battery, I am using TOU because that will be the cheapest option to me. If I flick the switch to select the fixed rate tariff, my savings fall below this.
– as stated I use more than the average power being a big house, large AC, pool, run a business from home with a number of servers running 24×7. To offset this I have a large 18kW solar system which increases the chance of being able to fill the battery even when the weather is bad (but reality is when the weather is bad, you can’t always fill the battery even with a solar system this size).
– I average about 48kWh / day over the year. Because of servers running 24×4 etc, my base load consumption is about 1kW before we do anything extra. Being a typical family, our peak draw from the grid, tends to be in the TOU peak times (making us a good candidate for offsetting this with battery savings). We are not a family that runs the AC 24×7 throughout the year, and certainly don’t turn it on any time the temps stray a few degrees from 23C. But we do turn it on when needed when it gets hot in summer and cold in winter (Sydney). We do what we can to reduce costs before before and after simulating any battery. eg run the disk washer after 10pm, and we mostly run the pool pump in off peak times. But we use things when we need them, and are not that worries about the savings that are difficult.
– I have set the battery to charge fully during off peak times (my solar FiT is more than my Off Peak tariffs, so doing this presents the best savings). Obviously I do not discharge into any off peak times, because again this would reduce my savings that I make with the battery. If I did not do this, I would not save as much. This also has the side benefit that the battery sends more of its time fully changes and less time completely discharged which is helpful for potential blackouts.
– these savings are based on me already doing whatever I can to reduce power costs that have little impact on my life without the battery. So I make no apologies for this being purely a spreadsheet that shows incremental savings from adding a battery without including savings from negotiating a better rate with your retailer, which is often all people need to do to get a big saving.
Of course if you get a massive subsidy for your battery (or like Jackson can get it for free), then this might change the economics a little and good luck to you. But not the savings. For the savings to change, the cost of electricity needs to go up, or FiT need to go down a fair way to make a big difference. For the economics to change, there will need to be a big change in prices, or a big increase in subsidies (which will all pay for anyway, so I am not sure that is a good thing for everyone), or the prices of batteries need to come down a lot. Or a combination of all of it, and I suspect we are a little way off that, as it appears in the last 2 years, home batteries have gone up in price and not down.
Anyway, this post is long, but hopefully highlights what I suspect is a typically large gap between what people intuitively think the battery will save them, and what it will actually save them.
Again there are many reasons to buy a battery besides economics. And I don’t want to rain on anyone’s parade who has brought it thinking they will get an economic return. But many people will be interested in the realistic figures, and I think those are the ones that should be presented.
I should also add for further context in the above post :-
– servers are are running 24 x 7 (not the 24 x 4 I put in the post above).
– my battery simulator also simulates saving from solar as well as batteries as well as other insights. To put the whole battery savings vs solar savings into context. My 18kWh solar actually saves me over $3800 a year!! Yes, that is real world saving. Effectively I have not paid an electricity bill since I increased the solar size to 18kWh in July last year. Despite being a bigger than average electricity user, my account is in credit with my retailer (it is possible I will use that up and have a small bill before the end of winter depending on how things play out). This is without a battery. So as you can see, battery savings are very small indeed in comparison. And certainly don’t be fooled into thinking that you need a battery to get your bills to zero. It is better to focus on the things that actually save you money (ie solar). Now it is true that 18kWh of solar has cost me a bit more than a PW2 would. But I expect the solar to be good for 25 years and LONG after it has paid for itself, whereas the battery will likely be end of life not long after the warranty is up in 10 years, and certainly before it ever has any realistic chance of paying for itself.
Mathew, no arguing, you know your stuff. I agree 100% with the numbers, that’s never been in dispute. The “false” advertising that batteries save you money would be a big issue and we are on the same page there( ie complete transparency required).
Yesterday i came across two people, one had three young kids, wife home all day and power bill $700-$800 per qtr. The other had one kid and one on the way but only spent $200-250 per qtr. They both asked about savings and very interested in batteries. My answer: If saving more money is the main motivator for getting batteries then you are better off with more solar panels. If it’s important for to run circuits in your home during blackouts(blackout protection) then you can consider adding a small battery unit. They both loved the idea of having this technology available and are keen to add this to their solar panels.
Now i will give them a complete rundown on savings for solar and batteries(on their own) and give them a price.
E.g – made up numbers,not accurate
Payback(yrs)
,Solar cost $7,500 3
Solar savings(made up) $2,500
Battery cost $8,400*
Battery saving $750 11
Total savings $3,200
Total cost $15,900**
Now if i’m a consumer all i care about is getting what i want ie solar with battery back up.
And consumers aren’t stupid either,they will work it out.
The bottom line is $15,900 cost and $3,200 total savings combined.
In conclusion, we have been totally transparent on the paybacks and the savings for solar and batteries(individually) and now the customer will make a decision.
They will quickly work out that although the battery has a much lower return, they love the idea of having that “added power security” it provides.
They will also add up the “total” “blended”(lol) savings versus the total cost ie $15,900/$3,200 = 5 year payback.
If a consumer were to recoup their $15,900 in 5 years, do you think they would care where it came from?
You may be jumping up and down saying “but the battery hasn’t paid for itself!,the solar has paid for it” but the consumer would be saying “yes, we are aware, but $15,900 went out five years ago and now we’ve recouped that money”. “we have all our money back sir, and we powered our home day and night and in times when the grid went down. We are happy consumers”:)
Do you get it?
Batteries now are more of a “luxury” item. Not everyone can afford them. It’s not always about the “payback”. It’s about the”wow’ factor. “i just got my batteries installed Bob. I’m the only house in the neighborhood that has day and night power and can even run lights and tv when the grid is down!”
“come over next time you’re in the dark and watch tv with me”(smirk)
Cheers Mathew
*with rebate this will be up to $4,200 cheaper
**these people aren’t short of a dollar either
Finn… any chance of installing an ‘edit’ function so that, eg, spelling errors can be corrected?
Probably not due to potential for misuse by spammers. (But I could be wrong about this. Computers are basically magic boxes to me.)
“Do you get it?”
Totally get it. You have presented solar alone savings and cost. And incremental cost and savings for adding a battery. If realistic calculations about the expected realistic savings from the solar and the batteries have been given. And the performance of the product and and the fact that the battery is unlikely to recoup itself before the end of its life at that payback rate is clear. If they understand all of that, they can then quantify what the benefit to them of the blackout protection or the “cool tech” or any other reason, to see if it is worth it for them. And if so, happy days to salesman and customer. Transparency is there. But there are a lot of “ifs” in there, and it only takes a few oversights on some of these “ifs” and the customer will be presented with potentially grossly misleading information, especially if the media and sales people and talking about “free power” from batteries and presenting case studies of customers who have made big saving on bill by adding solar, battery and changing their usage profile, but implying that the savings are from batteries. That this is the misinformation I think Ronald is trying to bring more objective reasoning to.
But I would be very interested in the assumptions you are using to come up with savings for a $8500 battery that has any chance of saving you $750 per year after all the real world factors are accounted for. And if this case is something that is unique to a small number of people for some reason (ie very high power prices they can’t avoid for some reason and no solar FiT or something else pretty unique to them), or it is something you think is applicable to a wider group of people. I suspect that is not likely to be achievable in the real world for most people.
Other interesting observations from my analysis :-
1. on my analysis in my case, I would get 71% utilisation out of the battery. If I change to not charging off peak and instead discharge off peak, my utilisation of the battery goes up to 88%, but my savings go down to about $350 per year. For comparison, on a whirlpool forum there was a bunch of Tesla PW2 users who gave their battery utilisation, Figures ranged from 43% at the low end, and 82% at the high end, and an average of just 61%. These real world numbers are below all the figures I have seen in most cost justifications, and will impact returns.
2. I used round trip efficiency of 88%. I have chosen this figure as it sounds like this is what a wide range of people are really getting on average with the PW2. This is a little short of the specification but the specifications from vendors tends to be a “best case” under ideal circumstances and not likely to be realisable in the real world.
Matthew, agree on all points.
The numbers i used were only made up numbers(as stated) as an example. Real scenarios will be different.
I believe if you are honest with people and totally transparent about savings in relation to batteries(or lack thereof), and they decide to add one because of other reasons we’ve already outlined, no wrong has been done on the part of the company selling these items.
If solar companies are going to essentially mislead people into making a decision to buy, those companies need to be made accountable.
Now, we have 10,000 batteries to sell, and if “savings on batteries” is the marketing message for some of these solar companies, they will fail.
One more thing. Is 11k for 10kwh battery good price?(plus install/inverter)
After rebate of $4,800, $6,200 price(10kwh)
Now that Tesla has updated their app to include more meaningful figures on the Powerall utilisation and solar usage, I can write the following.
The lifetime stats (since December 2017 when the Tesla Powerwall 2 was installed) are as follows:-
30% of the energy to the house was from the Powerwall
39% of the energy to the house was from the Solar PV system
31% of the energy to the house was from the grid.
That’s almost 1/3rd from each energy source supplying the house. Fairly evenly distributed.
Now, that tells me that while solar is the biggest lifter but not as big as some people say it is.
Lifetime of the Powerwall stats shows:-
Solar generated : 14043kWh
Powerwall suplied to house: 4261kWh
Grid supplied to house: 5849kWh
The rest must have been solar to the house.
House consumed: 14223kWh
Solar energy destinations:-
Home 36.5% = 5125kWh
Powerwall 33.3% = 4676kWh
Grid export 30.3% = 4255kWh
Clearly it shows that the Powerwall added 33.3% of the solar energy to house use (less round trip efficiency), which would have been exported if there was no battery. If this is not a big chunk of energy from the Powerwall, then what is?
And that kinda makes sense, because prior to the battery, the house was only self consuming up to about 1/3 of the solar generated.
Basically, I’m able to add another 33% of the solar energy generated to use at night via the battery. So, I’m about 70% self-powered since the battery was installed. Obviously, the goal is to be 100% self powered but with winter usage, it’s not possible.
So, the comment that solar panels are doing the heavy lifting is debatable. The panels on their own, I’ve found in most people I know, can only do 25-35% self-use. 65-75% is being exported at low FiT rates.
Adding a battery pack increases the value of the solar system, in my case to be self-powered at almost 70% (effectively doubling the solar energy harvested to be self-used). I don’t know if I can do better that to self-consume any more than 70% across the year because of winter figures (low solar generated & high heating usage) for an all electric house.
But it does prove the point, that batteries on their own will never pay for itself. It needs a solar system (or a free energy source).
A solar system on its own is a good start but not very efficient at achieving high self-usage percentages from what I’ve seen in my own system and other people’s.
A battery system compliments the solar system very well to improve the self-usage figure to over 50%. (in my case – self powered to 70%).
If solar was the biggest lifter, then I would expect that it has to be greater than 50% to be directly fed to the house without a battery. But I don’t think it is a practical reality for most people. Hence why a lot of people are opting to divert their excess PV to hot water systems because off-peak hot water tarrifs are greater than FiTs. (the method of diversion is another subject when it comes to costs).
A 20kW solar system is not as good as a 10kW Solar system with a 10kWh battery system. Most people would not be able to make use of a 20kW solar system very effectively (unless on a very very generous FiT scheme or have very large daytime loads to offset).
Anyway, that’s my take but I would take the comment that solar panels on their own are the “biggest lifter” of energy self-consumption with a bit of caution as much as a grain of salt.
You numbers look pretty typical for a battery.
It sounds like your goals are more around “solar self-consumption” and the battery assisting you with that. Ronald’s article is more about battery economics and potential savings from batteries (or lack of in the case of batteries). If maximising solar self-consumption, or reducing grid import is your goal, there is no doubt a battery is going to make a significant contribution (in your case doubling self-consumption or halving grid usage and this would be pretty typical for a lot of people as you say). And if you think the price you paid for the battery was worth it for the contribution that it has made to that goal, then happy days for you. But do not confuse maximising solar self-consumption, or reducing grid usage to be directly related to cost savings. And your case is a VERY good example. Short version is even under tariff conditions which favour battery payback, my estimate of you likely savings from your battery is probably about $450 / year, whereas solar savings are more likely to be $1870 / year. This is damning when I assume you paid a LOT more for your battery than your solar AND the battery has a LOT shorter lifetime. Read on to see the assumption behind this. Your tariffs are probably a bit different and your real outcome is likely to be a little different because of this. But I suspect not different in that the vast majority of you savings will not come from the battery.
If you are buying a battery to save money, your numbers actually confirm the premise of Ronald’s arguments in this article (ie that batteries undermine the economics of a solar purchase). But given I suspect you might mistakenly believe your case might in some way contradict Ronald’s arguments, lets do some further analysis on your actual real life battery. On even a quick look at your numbers, they look very similar to every other analysis of batteries I have done which again and again confirms the poor economics of batteries. They confirm that the battery is unlikely to ever give anyone a payback (unless you are a rare person who can somehow get the battery for a few thousand $ installed which might occasionally be possible in SA where they have massive subsidies, AND if you work the right VPP deal in the right way AND you find an installer that drops their pants on the installation and the PW2 price AND you have exactly the right usage).
A few observations about what your numbers confirm :-
1. I suspect you very much under rate the amount of “lifting” solar actually does. Even if your goal is only about reducing grid usage, and therefore you don’t care about anything that is exported, even then it looks to me the solar supplied 69.5% of your house. Remember, the battery does not actually generate any power in itself (in fact the opposite, because of efficiency losses, it is a net power sink not generator). Without ALL of this 69.5% solar, the battery would be completely useless for you “reduce grid demand” goal. So attributing all of the 33.3% just to powerwall and not power + solar probably is a common mistake people make (ie using solar + batteries, but attributing all of the benefit as coming from the batteries and none from solar). So the most battery optimist way of phasing what has happened for you will be Solar offset 69.5% of my usage, with battery assisting for 33.3% of that usage and the grid needing to supply 30.3%.
2. even ignoring the point above, only 30% of the power for the house actually comes from the battery. The difference between the 33.3% you calculate is 3.3% and is your actual efficiency losses you mention.
3. From your numbers, we can easily calculate your actual efficiency numbers for your usage which is 4261 / 4676 = 91% which is a REALLY good result and probably as good as I have seen. Over a wide range of PW2 users this is at the very top end of the figures I have seen, with averages typically closer to 88%.
4. As is typical of a PW2 battery usage, looks like your average daily utilisation is quite low. Instead of the 13.5kWh / day a lot of people use to do their unrealistically favorable battery economics, it looks like your average daily utilisation is closer to 6.7kWh which is pretty close to 50%. A figure this low will hurt your ability to actually get a financial return on your battery. Is this figure because you are only a small user of power on a lot of nights (only about 22kWh / day average by my calculation), or is it because your solar is not big enough to fill the battery on a lot of days?? Or most likely a bit of both. But either way, there is no doubt, if you have enough roof and are not export limited, getting a bigger solar will help with the economics.Mostly because the good economics of solar will further dilute the bad economics of the battery which is already a sunk cost for you. The bonus of larger solar it should help you make a few more $ saving from the battery.
5. Looks like you only use about 22.3kWh per day which is going to limit the return you can make on a battery.
6. But have you calculated the amount you actually saved from having your battery alone compare to solar savings? It is simply (“kWh the powerwall supplied to house” * “Electricity tariff”) – (“kWh that went to the PW2” – FiT). In your case this is (4261kWh * “Electricity Tariff”) – (4676kWh * solar FiT). If you are on single rate tariff (hopefully you are not because with a battery TOU tariff will almost certainly be better for you if you can get it), this calculation is really easy. Where I am in NSW Ausgrid on this would typically be (4261kWh * 23c) – (4676kWh * 12.5c) = $395 in 1.75 years (or $226 per year) which is obviously not going to go anywhere near paying back a $13k-$16K battery in the 10 year warranty). Now, it is true that TOU is probably the best plan for you as overall it will probably reduce the rate you pay for electricity you have to buy. And on the face of it as my peak rate is 42c, and that presents a much more beneficial arbitrage. But the downside is peak hours only apply 10% of the year where I am (might be a little more where you are but still probably not much more as I know nowhere that has peak rates on weekend). The shoulder (19.2c) and off peak (11.7c) rates are MUCH less attractive and will erode the more reason “peak” saving. Looks like with your average daily usage of only about 22kWh per day and I assume it is quite likely that even with TOU a lot of your usage will be offsetting shoulder and off peak rates. Probably still better than being on fixed rate, but it is not going to suddenly having you making thousands of $ a year in savings needed to get a ROI. Some of the most attractive arbitrage figures I have seen is in SA where single rate TOU is 36c and solar FiT is 16c (bit 20c arbitrage between import and solar FiT which will help battery economics). So lets run those numbers. With that you actually get $786 savings over the 1.75 years (or $450 / year) you have had your battery, which is a bit more attractive, but nowhere near enough to get it payed off before the warranty expires.
7. But the premise of the article Ronald put together was not about “reduce grid usage”. It was about financials and pointing out that solar is where the significant savings come from, with batteries almost certainly undermining the ROI and the dangers of blended payback actually helping to hide that fact. While I suspect you might have a feeling your numbers do not support the premise of the article, in fact they totally confirm what Ronald is saying. With your figures, we can actually calculate your actual savings with and without a battery if we make some assumptions about your electricity tariffs (which you can correct for your actual tariffs). Lets work you numbers on kind of a likely “best case for batteries” scenario for batteries (big gap between import rate and solar FiT of 20c) with the import of 36c and FiT of 16c. As outline above, your savings from your battery is about $450 / year. So your savings for your solar is going to be (36c * “kWh you self consumed”) + (16c * “total kWh that would be exported if you did not have a battery”) = (36c * 5125kWh) + (16c * (4676kWh + 4255kWh)) = $3273 or roughly $1870 / year. So already we can see that the heavy lifting of the savings come from solar. That is already before you factor other things that make this even more 1 sided. Eg :-
a. I am guessing your solar system is roughly 6kW. Based on that, I am guessing it probably cost your about $6000-$7000, whereas I assume you likely paid well north of $13,000 for your battery (if they did not mix the too together to hide the crap economics of the battery).
b. Your solar will still probably be pumping out 85% if current capacity in 25 years time. My guess in about 10 years time your battery will be end of life and you will probably have to pay someone to come and uninstall your battery and safely dispose of it (ie negative residual value). ie at the end of the battery life, it will have negative residual value, where the solar will have significant positive residual value.
Bottom line if you want to save money :-
1. forget batteries. As a rough guide, you probably don’t even need to think about them until the installed price is somewhere south of $4K installed with no other catches AND/OR there are significant changes to the power AND/OR solar FiT rates.
2. get as much solar as you can fit on your roof and still get a reasonable solar FiT. Even 8c is more than enough to get an attractive ROI EVEN if you use none of it and export everything (anything you self consume will be even better). I recon even for a FiT of only a few cents, it would still be much better than getting a battery. So I recon the smart money says, get as big a solar system as you can fit now with attractive FiT and get the solar system payed off ASAP. I recon the solar FiT over the longer term is heading down (supply and demand as we get more solar because it is already the cheapest form of grid scale power). BUT if you have a big solar system that is already paid off, you will then be in a good position to buy a battery when FiT are not worth much, and battery prices drop and kick in the 2nd round of real savings all driven by the solar. If you don’t have solar, or have already brought an expensive battery today, you will probably have shot yourself in the foot twice from “a saving money point of view”.
3. don’t buy a battery today on some sort of unrealistic promises from savings on the battery on forecast changes in power prices. Even if they occur (which is far from certain, given RE should soon be making power cheaper and not more expensive if we do it properly which I will admit is far from certain with our current political oxygen thieves holding too much power and doing everything they can to shoot us in the foot), it is better to wait to buy the battery in the 1st year it does give savings and give it a better chances of making savings through its whole life.
4. I suspect that as a rough guide with actual power prices across Australia, for most people the actual battery savings will be in the $200 – $500 range. There might be a few outliers whose personal circumstance might deliver savings of a bit more than that, or a bit less than that. But most people will save less than they intuitively think. Don’t buy a battery until that looks like an attractive saving for whatever price you have to pay for a product which in all likelihood will not have a life much beyond the 10 warranty period.
The huge size of Australia and the wide differences in climate and seasonal fluctuations between states and territories unfortunately means that there is no ‘magic bullet’ or ‘one shoe that fits all’ approach that is ever going to work satisfactorily.
Just to illustrate, Tasmania has a huge proportion of their power generated via hydro and wind, some but not much generated by roof top utility solar.
Overall, pretty much 100% of Tasmania’s power generation is from ‘renewable’ sources most of the time, and they ‘export’ quite a bit to the mainland esp at night.
In South Australia, they get virtually nothing from hydro, but solar and wind meet some 80% of their needs during the day with the split between solar and wind being 53% and 32%. At night though, solar is zero, while wind provides around 70%.
Thanks to the efforts of the Queensland Premier, QLD gets 78% of its power generated via black coal and a less than impressive 35 % by roof-top and utility PV plus a bit of hydro., and most of the excess over 100% gets ‘exported’ to other states, presumably to ‘brown coal’ burning Victoria.
The National Energy Market website as https://opennem.org.au/ is a good one to visit, if you want some general idea of how much power gets generated in your state by each type of power source. I used it to get the rough percentage numbers I mentioned above
Whats missing from the above numbers is the quantity of solar PV that’s self- consumed by households and businesses, prior to them sending what’s left to the grid. My guess is that self-consumption is growing quickly compared to recent past years because more and more quite large enterprises (think Woolworth’s, Coles and Ikea as examples) are now putting solar on the roof-tops of their distribution warehouses, shopping centres, local council buildings, schools and university buildings, light manufacturing businesses and so forth all over Australia.
This August 2019 Guardian article is worth reading, it gives some idea of just how many major firms are now installing solar to cut their power bills.
https://www.theguardian.com/australia-news/2019/aug/21/coles-signs-long-term-contract-for-electricity-from-three-new-solar-farms
You can’t really get 100% certainty about the relative mixes of power generation sources at any one moment. But, the fact that grid electricity distributors and retailers such as Synergy in WA, along with AGL and Origin are now all sending signals of one kind or another that ‘self consumption’ is increasingly impacting their businesses significantly, is a good indication that they are ‘hurting’. Their pain increases with every new solar PV system installed, and every new large scale utility solar farm brought on-stream.
I don’t think there’s much to be gained by waiting for PV system prices to drop significantly like they have in the recent past, because the rate of decline does seem to have slowed. As well, the risks are that FIT rates will drop further, and we know already that the STC credit/rebates on the purchase price will continue to drop each year according to schedule.
Although its unlikely, there is now some small risk in my view that the STC off-set might suddenly disappear over-night depending on just how bad and how quickly the overall financial situation of a particular state becomes, for reasons that have nothing to do with energy costs.
Even if I’m wrong on all of those, at the moment there’s every likelihood that you’ll have recovered 50% of your outlay after about 2 years, and 100% of it in 4-5 years or so, assuming you installed only roof-top PV without a battery.
Those periods vary from state to state of course, and also assume that youl make some effort to change your consumption patterns by shifting the timing of such things as laundry, dish-washing, cooking etc where you can, to improve your self-consumption of generated PV.
After reading all of the opinions of whether batteries are worth it or not, there does not seem to be a clear answer. Those that have them love them, those that don’t say you are wasting your money. It seems to be very individual.
One thing no one seems to address is the limit of 5kW that SA power puts on feed in to the grid on single phase. What is the point of having a large solar array on the roof if you can’t sell it back to the grid? 3 phase helps but who has $3000 to install it.
For us we use most of our energy in the evening or at night so selling back to the grid on say a 9kw system seems to be a huge wasted opportunity given the limitation of 5kW in SA. Surely it make more sense to store the wasted energy into a battery and use it at night?
We have 3kw system already I want to add 6.6kw Trina/Sungrow Hybrid and battery 13.5kWh LGChem. This additional system is around $11000 with all of the rebates and installation.
We use 15 – 19 KWh at evening/night and the remainder during the day around 5 kwh. (weekdays).
When you do all of the sums:
38c tariff
14c feed in tariff
The blended payback seems to work at 4 years.
Use monthly consumption figures? Yes kWh/Day
Jan Feb Mar Apr May Jun
28 28 28 26 24 24
Jul Aug Sep Oct Nov Dec
24 24 26 26 26 28
Step 2 Enter your solar PV system details
Solar PV system size 9.6 kilowatts (kW – peak)
Closest city Adelaide
Tilt angle and orientation Northeast – 30° tilt
Step 3 Enter your battery storage details
Battery capacity (Enter “0” for solar PV system estimation only) 13.5 kWh
Pre-charge battery by off-peak grid power by: 0% (available only under ‘time of use’ billing)
Additional battery details (optional)
Max input power 5 kW
Max output power 7 kW
Energy storage efficiency 0.85
Max Depth of Discharge 0.90
“Discharge battery whenever possible?
(If ‘no’, battery only discharged during ‘peak’ and ‘shoulder’ times.)” Yes “(please select –
available only under ‘time of use’ billing)”
Battery warranty period 10 years
Battery expected lifespan 15 years
Battery cycle life (number of cycles) 4000
End of life retained storage capacity (% of original capacity) 70% (please select)
Peak $0.38 /kWh SA Power Networks
Shoulder $0.38 /kWh
Off-Peak/Flat $0.38 /kWh
Solar Feed-in Tariff (FiT
$0.14 /kWh
Supply Charge
$0.89 /day
Energy Inflation Rate
0.03 (enter percentage as a decmial – e.g. ‘0.03’ for 3%’)
*Energy Inflation does not apply to FiT
Solar PV system cost (Enter $0 for battery retrofit) $5,500
Battery storage cost (Enter $0 if system does not include batteries) $5,500
Total system cost (no finance plan) $11,000 With finance plan: $0
First year estimate bill before PV and Battery $3,605 excl. supply charge, demand charge
First year estimate bill with PV and Battery installed $736
First year total savings $3,026 incl. FiT revenue
First year savings breakdown Savings from direct PV offset $1,587
Feed-in tariff revenue $812
Savings from battery $627
First year energy independence stats Number of days of energy independence 0 days
Energy needs met locally (%) 80%
Extra costs for charging battery by off-peak grid power $0
Payback details Payback period for the solar PV + battery storage system 4.4 years < warranty period < expected lifespan
Payback period for the battery storage only 8.9 years < warranty period < expected lifespan
Years until cycle life max is reached 10 years < warranty period < expected lifespan
I might be wrong and have missed something here but this makes sense doesn't it?
G’day All
I have found all your information and discussions pretty much what i have thought but I could be wrong in this particular case! Situation NSW.
My problem (perhaps) if it is a problem, is that I have two 15KW solar units on two properties on the one block, business and private.
The business solar unit exports a large percentage to the grid at ever decreasing rates, started at 14 cent rebate and now only 9 cents.
The house exports far less and is the far more expensive bill.
I was thinking of adding a battery system to the business circuit and using the excess power for the house at night and potential blackouts.i don’t know whether this is legal or just being a penny pincher!
Your thoughts appreciated
Bs & Cs
Bob
Do economics of batteries (going off grid) stack up if the cost of upgrading power box and pole plus installing underground line to house cost around
$46,000?