Installing a home battery system right now will not save you money. Maybe in a year or two it will, but I have a very short time horizon so that’s almost like never to me.
As of March 2018 I know of no battery system on the market that will save money for a household that has anything approaching normal electricity consumption.
And note I said “on the market”. I don’t want to hear about your home made battery system you wired together yourself out of cells found in an industrial bin behind a factory in Tianjin. If you do have such a system I hope you’re not a smoker as that will increase your chance of smelling burnt insulation before it’s too late.
This article is about one very important factor that prevents solar batteries from paying for themselves. If someone says home batteries make economic sense there’s an excellent chance they’ve overlooked it. Forgetting about it is probably the second biggest mistake made when determining battery payback. The most common one is so sneaky and insidious and rarely recognized I will immortalize in song anyone who tells me what it is in the comments.
So what is this one thing that wrecks the economics of batteries? It’s your home’s feed-in tariff. Ignore it at your peril, for if you do, both your budget and your spirit may be broken.
Opportunity Cost
The reason why solar feed-in tariffs reduce any return from batteries is because of opportunity cost. If a home generates one kilowatt-hour of solar electricity they can either:
- Store it for later use, or…
- Send it into the grid for the feed-in tariff.
It’s not possible to do both with the same kilowatt-hour so any household that stores it loses out on the opportunity of getting a solar feed-in tariff. And vice versa. Basically you can’t have your cake and eat it. Because after you eat it the cake becomes a food bolus.1
Opportunity cost is such an important concept in economics it even has its own Wikipedia page2, which I am going to totally ignore in favor of this simplistic definition:
Opportunity Cost = Return of Most Lucrative Option – Return of Chosen Option
So we have some people who are just looking at:
Return from Storing Solar Electricity
And thinking that’s how much they’ll save if they install batteries when what they should be considering is:
Return From Storing Solar Electricity – Return From Solar Feed-in Tariffs
As that is what they’ll actually be saving.
But I don’t think the real problem is people are ignorant and don’t know what opportunity cost is. I think it’s more that people are annoyed with their electricity retailers and want batteries to pay for themselves and so get a little optimistic and overlook the effects of feed-in tariffs in their excitement. Then when someone completely lacking in tact, such as myself, points out their mistake they can get a little defensive. No one enjoys having their beautiful battery system dreams crushed.
Examples
I am going to go through three examples to rub in the importance of taking solar feed-in tariffs into account:
- A magical land where feed-in tariffs are equal to cost of grid electricity.
- A home that receives no feed-in tariff.
- A realistic example of a home receiving a typical feed-in tariff.
I am going to assume the batteries in the examples have round trip efficiencies of 80%. This is significantly worse than what manufacturers normally claim for their products. For example, Tesla says its Powerwall 2 has a round trip efficiency of 89%. Unfortunately, I find the anecdotal evidence is mounting that the round trip efficiency of battery systems is closer to 80% in practice.
Example #1 — Darwin
Far to the north there is the magical land of the never-never3 where feed-in tariffs and the per kilowatt-hour charge are as one in magnitude:
- Cost of grid electricity per kilowatt-hour = 25.7 cents
- Solar feed-in tariff = 25.7 cents
It’s a very popular name. For example, here’s Elon DeGeneres. (Image: Forbes)
Because of this, there is no point installing batteries in Darwin as they will only lose money.
To show this is the case, let’s say there is a Darwinian who installs a home battery system. Let’s pick a name for him completely at random and call him Elon.
If Elon’s batteries have an 80% round trip efficiency he’ll need to charge them with 1.25 kilowatts of solar electricity in order to draw one kilowatt-hour from them in the evening. Using that one kilowatt-hour will reduce his electricity bill by 25.7 cents but if electricity required to charge the battery had been sent into the grid instead he would have received 32.1 cents in feed-in tariff. So for every kilowatt-hour of battery storage he uses, Elon loses 6.4 cents.
The moral of this story is never-never install batteries in the never-never if you can receive a feed-in tariff.
Example #2 — No Feed-In Tariff
Now I’ll look at a home that receives no feed-in tariff. Why it doesn’t have one is not important. Perhaps it’s in a rural area and their Distributed Network Service Provider won’t allow them to export any electricity or maybe they just don’t like feed-in tariffs. They could be feed-in tariff phobic.
If they are charged the Australian average of 25 cents for each kilowatt-hour of grid electricity they use then every kilowatt-hour of stored electricity provided by their batteries at night will save them 25 cents. As long as there is enough surplus solar electricity to charge the batteries it doesn’t matter how efficient they are because if the surplus energy isn’t stored they get no benefit from it.
Example #3 — A Typical Feed-In Tariff In Adelaide
South Australians are charged the most per kilowatt-hour for grid electricity but they also have access to the highest feed-in tariffs outside of the Northern Territory. Origin, AGL, and Energy Australia, the three largest electricity retailers in the country, all offer feed-in tariffs of 15 cents or more.
Using SolarQuotes’ Electricity Price Comparison Tool and looking at AGL’s retail plans, I see that with discounts a household can be charged 36.5 cents per kilowatt-hour of grid electricity used while receiving a feed-in tariff of 16.3 cents.
If this household has a battery system with a round trip efficiency of 80% they can use 1.25 kilowatt-hours of solar electricity to charge a battery and draw one kilowatt-hour from it in the evening and lower its electricity bill by 36.5 cents. But that would cost them the opportunity to send the solar electricity into the grid and receive 20.4 cents in feed-in tariff. This means each kilowatt-hour of electricity drawn from the batteries will only save the household 16.1 cents more than receiving a feed-in tariff for it.
Without a solar feed-in tariff the household would be 36.5 cents ahead for every kilowatt-hour of stored electricity used so in this example the feed-in tariff cuts the savings from storing energy by more than half.
Solar Feed-In Tariffs Versus No Feed-In Tariffs
To show the difference feed-in tariffs make to the economics of batteries, I will compare the total savings from installing a Powerwall 2 in South Australia without feed-in tariffs and with them.
I will make the following assumptions about the Powerwall 2:
- Its total installed cost is $12,000.
- Round trip efficiency is 80%.
- It is only charged with surplus solar electricity.
- It will provide a total of 56.7 megawatt-hours of storage: 50% more than allowed for by its warranty.
- It provides an average of 9.7 kilowatt-hours of stored energy per day.
- Its lifespan is 16 years.
I will also make the following assumptions:
- The cost of grid electricity is 36.5 cents per kilowatt-hour.
- When applicable, the feed-in tariff is 16.3 cents.
- Electricity prices and solar feed-in tariffs remain constant in real terms. (Even though I am sure they will fall.)
- The cost of capital is 1% in real terms.
- All values are given in today’s money.
I regard my assumptions about the Powerwall 2 as optimistic, especially the high average daily use. The low cost of capital I am using is also optimistic, but might be reasonable for a retired couple. Mind you, it would have to be a retired couple that uses a lot of stored electricity each night.
Adelaide Powerwall 2 Without Feed-In Tariff
Without a feed-in tariff every kilowatt-hour of stored electricity would save a household 36.5 cents which would total $20,696 over 16 years. I will assume these savings are invested at the same rate as the cost of capital — 1% in real terms — and so they will be $23,812 by end of the Powerwall’s lifespan. Then from this amount we need to subtract the cost of the installed Powerwall. After 16 years with a 1% real cost of capital that would come to $14,071 putting the household $9,741 ahead. This is enough to make the Powerwall 2 a solid investment.
Adelaide Powerwall 2 With 16.3 Cent Feed-In Tariff
With 80% round trip efficiency the batteries will need to be charged with 1.25 kilowatts of solar electricity for every kilowatt-hour that is discharged. This means the electricity bill will only be reduced by 16.1 cents per kilowatt-hour stored. Over 16 years this would total to $9,129 and when invested at 1% real return it would come to $10,524 over that time. After 16 years with a 1% cost of capital the $12,000 original installed cost of the Powerwall would come to $14,071. Subtracting this amount from the money saved plus interest gives negative $3,547.
This means once feed-in tariffs are accounted for, even in the state with the highest electricity prices, battery storage won’t pay for itself even when using optimistic assumptions. If Tesla’s round trip efficiency figure of 89% is used instead the loss comes to negative $2,202. This is not enough to change the basic conclusion.
Feed-In Tariffs Prevent Batteries Paying Anywhere In Australia
South Australia’s high electricity prices make it an excellent location to install batteries, but Western Australia should be a little better thanks to their low feed-in tariff of only 7.1 cents. Their higher and more constant levels of sunshine should also help4. Elsewhere in Australia time-of-use tariffs could potentially make batteries pay for themselves but that introduces a whole new set of complications, many of which I have covered in the past and I’ll probably get around to covering them again in the future. So it’s possible there are homes where batteries could pay for themselves now, but they would be extremely rare and probably really weird.
No Regrets
I’m sorry if I have bummed some people out by dashing their hopes of saving money by installing currently available battery systems. But I have no problem spreading some mild depression if it spares people the pain of making a hefty financial mistake costing thousands of dollars. So I have no regrets.
Footnotes
- And then it becomes chyme and then feces which is the technical term for a sacrifice to the porcelain volcano. ↩
- I would heartily recommend you all use and donate to Wikipedia, except there doesn’t seem to be a page about me, so it’s obviously broken. ↩
- Actually, I had a friend who went to Darwin and she said it was more like the always-always. ↩
- I originally wrote that Western Australians aren’t allowed to install batteries. That is wrong and was stupid of me. I have had some people tell me they haven’t been allowed to install batteries in WA and this is something I might look into at some point. ↩
About Ronald Brakels
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The most common mistake is ignoring that there are other brands than Tesla. Take it away…
A very good attempt Laurens Bloem, but I’m afraid that is not the invisible elephant in the room. For that, you only get a limerick:
There was a Laurens Bloem from Nantucket,
Who met a lass with a brick in a bucket,
He thought she was cute,
So he bought her a ute,
Now when she buckets a brick she will truck it.
Haha, I’ll take that thanks!
True. Like AMPETUS for example. (Cheaper than Tesla).
Disclaimer: I an a Tesla sharholder, have a Model 3 reservation (due some time in the 21st century – possibly after my death). Eagerly await the Hyundai Kona EV as an alternative. Which ever comes first gets my money 😉
Laurens,
Yes, that’s true but why would you bother looking at other systems than Tesla’s. Some battery systems are instant turnoffs as soon you start reading the tech specs (the first two are obviously battery capacity and rated power output). A lot of them are rated lower than Tesla for a dearer price. It’s not just a pretty box with a nice glowing strip LED, but having said that some of these battery boxes are just plain ugly in design. If companies can design good battery boxes, that will help them be differentiated from others.
Solarquotes own comparison shows that Tesla is in the top two for value.
Here’s their comparison link…..
https://www.solarquotes.com.au/battery-storage/comparison-table/
I found the Tesla Powerwall has the right amount mix of features for it to be hard to be beaten on price point. I would dare say that the Powerwall is the “Goldilocks” of all domestic battery storage systems.
The other big name I looked at was Sonnen….. red flags went up immediately, It was only half the power output (2.5kW), it was only 10kWh capacity and dearer than Tesla’s by a couple of grand, so it was not good value for money. Both offered 10 year warranty. What’s so special about Sonnen?
While the Tesla specs are good, there are a number of other batteries on the chart now that are now similar and at least worth considering in a comparison. I’ll certainly admit that Tesla is a strong contender though and at 13.5 kWh of usable capacity, nothing else really comes close at that price if capacity is what you are after.
But most of us aren’t off grid and most of us can’t usefully use 13.5 kWh of power every night to get one full cycle per day out of the battery. It is still very hard to pay of itself with a full cycle every day, but without that there is very little hope indeed.
Myself, based on readings of actual usage, I only really use about 5kWh of power on a typical day from the grid (and some days are as low as 3kWh), which means the Tesla battery is just too big for my needs and there’s no way it will every pay for itself. While my usage may be below average, I don’t think that it would by atypical, especially during the months when heating and cooling are not necessary. The only thing I’ve really done to minimise usage is to install LED lights everywhere – if you still have incandescent lights that you regularly use then it is time to buy LEDs and throw them in the bin and buy LEDs (perhaps wait for the half price woolies special on the Philips bulbs, but do buy them) – it is just about the only thing that has a better return on investment than solar.
So with my usage, the only batteries that could make sense from the comparison table are the SunGrow SBP4K8, Soltaro, GCL E-KwBe 5.6 or Ampetus “Super” Lithium. The others are either too big and expensive (or just too expensive) or in the case of the Enphase the power output is just pathetic.
Last time I looked at the table, I was with Ronald and thought that no battery could make financial sense for a family with typical usage unless there was some other driver involved, but looking at these offerings now, I’m not so sure. I think adding a small cheap battery with decent power output such as the 4 I listed could make sense now for a typical household if it fits in with their Solar system, particularly if it is installed at the same time as a new solar installation because of a combination of the benefits below:
– Unless I’m mistaken, adding a battery means that you aren’t bound by the 1.33x solar oversizing maximum for claiming STC certificates meaning you can install more solar panels with a smaller inverter and particularly in places where you are limited to a maximum of a 5kw inverter for a single-phase installation, this alone could make the battery pay for itself in some cases due to the additional payback from extra solar panels.
– If the battery is charged intelligently then on most days a small battery can be charged entirely by power that couldn’t have been exported anyway by charging it during the middle of the day when production from the solar panels is higher than either the capacity of the inverter or the export limit. This is even more likely to be the case if you oversize the array by more than 1.33x by virtue of having the battery. If the battery gets charged by power that couldn’t otherwise be exported on most days then that is enough to make some of the batteries economical in some circumstances.
– With a small battery that has a decent discharge rate, it is quite possible to get more than 1 cycle per day. There are often spikes in power usage during the day from things like boiling the kettle, the heating element in the washing machine or dish washer, or cooking in one form or another. With a battery that has at least 2kW or so of power output these could often be fully met with battery power. The same goes for running an air conditioner and having temporary dips in production due to the variability in solar production due to clouds. You aren’t likely to get to two cycles per day, but significantly more than one cycle per day is certainly possible and this will improve the return on investment. For many batteries cycling more than once per day will reduce the lifetime of the warranty, but I note that the while the GCL E-KwBe 5.6 has a relatively short 7-year warranty, it has no limits on how many times it gets cycled in those 7 years and it has a very good cost to capacity ratio, so in the right circumstances this one could be attractive.
If you add the benefits of those three together then I think there will be plenty of typical households that would benefit from a battery. It still isn’t a no-brainer like installing the solar panels is, but it seems that in many cases a small cheap battery could pay for itself and in fact turn a profit if it fits in with the chosen inverter and the rest of the solar system – just not a Tesla battery which is so often the one that is mentioned when talking about solar batteries. While it is a great battery from a technical and price perspective, I strongly believe that it is just too big to be viable in a purely financial context for typical households in Australia.
Do you think the new Victorian time-variable FiT that has been announced could change this? It might allow battery owners with a large enough PV system to cycle their battery twice a day – once to completely export at 29c/kWh, then once to offset evening consumption at ~25c/kWh. You’d need to have a pretty particular consumption profile, but instinctively it seems like it would make batteries more competitive. https://www.esc.vic.gov.au/project/energy/2134-minimum-feed-in-tariff/
In the future time variable fits definitely have the capacity to change things. Especially in places like South Australia where rooftop has supplied up to half the state’s electricity consumption in the middle of the day at times. But at the moment Victoria’s time variable tariff doesn’t make batteries worthwhile as the minimum feed-in tariff received for almost all the day is 10.3 cents which is still pretty good.
In addition to the purely economic argument, there are other factors to be taken into account which cost time and money. Consequently, I am still motivated to buy a solar battery when I can afford one. Where I live in rural SA, there are frequent power cuts. Many are short, but others have been longer up to several hours and two lasting sever days. I have lost count of the number of times I have to reset clocks on the cooker, microwave, radios etc. and food in fridges and freezers can only last a few hours without power. On computers I use uninterruptible power supplies in case of a blackout, but these cost money to run too. Personally, I yearn for a time when the whole house can be on a UPS (battery/inverter) system with enough storage to last several days.
Perhaps I should have mentioned the value of being about to avoid blackouts but this value varies from person to person and I just wanted to focus on feed-in tariffs as I had noticed some people were not taking them into account.
I’m not sure the thousands needed to set up home storage and the maintenance and the depreciation of the system would be enough to balance the annoyance of resetting a couple of clocks every now and then.
Or having to throw out a couple of hundred dollars worth of (un)frozen food because it may no longer be safe to eat when the freezer(s) stop running?
your expectation of a 16 year life-span for the powerwall is probably “very optimistic”. 🙂
As the goal-posts keep moving, with changes to the FIT, and changes with storage (cost going down, capacity going up), no doubt we will be able to revisit this in a few years time and we may come to a ‘break even’ over, say, a decade.
One other thing to keep an eye on, is the current grumbling about “what happens when there is more solar-pv being fed into the grid than is required?” Maybe there is an opportunity for more commercial generators to look at distributed virtual power plants, and factor those into their Energy Market obligations?
Personally, I intend to have a party when rooftop solar supply exceeds total demand, but I understand some people are less sanguine about it than I am.
Well explained Ronald. Then how is it that there are dozens of battery companies trying to sell their batteries to so many Australians? Why are there so many independent and reputable organisations running seminars and presentations etc promoting batteries? Why is there this general understanding that batteries are going to sell in the 100,000s. And why are lots of Australians buying them?
If you are right, your message needs to get out there and quickly.
If there are organizations telling people that buying batteries will save them money now then those organizations are not reputable. But as I pointed out in the 4th sentence of the article, this could change in a few months. Unless there are major changes in the way Australians pay for electricity the current cost of producing battery packs in China, Korea, and countries with bad food means home batteries paying for themselves is a foregone conclusion. So yes, my message does need to get out there quickly.
Well I’m not an organisation ~ and certainly not reputable, but as stated (and
explained) several times ‘home batteries’ have been ‘paying for themselves for yonks; and certainly since 1981 when I went down track.
There are, of course, provisoes ~ such as applications: eg NOT running air-conditions/space-heaters/ microwaves/etc. off battery-banks……and adjusting your time of use according to innovative parameters……and also keeping well clear of the soopa-dopa gee-whiz hugely-overpriced power-wall type junk. (junk over which you have NO control on any terms.
(Yesterday I had some eager twit trying to sell me a 3-way fridge-freezer, and justified the extra $369 by assuring me it was wifi connected so that I wouldn’t have to go and check the temperature manually.)
Two inviolable rules for general-purpose use:-
1…….Murphy’s Rule:- Murphy was an optimist.
2……The KISS principle is the ONLY universal principle.
3……It’s YOUR money, Ralph ~ and THEY want it.
4……A fool and his money are soon parted.
5……If at first you don’t succeed, fuck it!
The issue I’m facing Ronald is that of the 3 installers referred to me from Solar Quotes one is banging on about batteries and pretty much saying we’d be silly not to install one. One recommended we put a monster solar only system on the roof which is appealing, but another installer said would be meaningless as there’s only so much that can be exported back into the grid and may also impact the ability to attach a battery in the future.
2 of the 3 also recommended the same type of panels, while the 3rd said Australia is the dumping group for inferior panels from this particular provider (what they sell to large international coys and govt’s is the good stuff and we get the junk). At least they all agreed on the inverter!
Hi Bryan,
Finn here.
I couldn’t find your email in our database. Please let me know the 3 companies, either through the comments or via email to [email protected] and I’ll look into it.
Thanks!
email sent Finn. I thought I’d respond on the blog too just in case anyone reading my comment thought I was trying to be negative on your service, which I’m not (I’m just confused!). I’m thinking my work email is in your database but when I commented I used my personal email.
Simplified even more, because I don’t like complicated maths.
This is what I say to people who ask the battery question.
Ask yourself how much electricity can I buy for $10k for 10 years?
This assumes a battery costs $10k and has to be replaced after 10 years.
I know a battery installed possible costs more than $10k and may last a little longer than 10 years but capacity will be reduced.
Batteries don’t pay for themselves yet. Wait a while.
That’s easy…
The average household uses about 5700kWh in Australia.
At 27c/kWh average rate.
10years x 5700kWh x $0.27 = $15,390 – not factoring in any price rises for 10 years which is highly likely to occur, so potentially, maybe $20,000
This does not include daily supply charges.
People I work with regularly have $800/qtr electric bills. So, on this basis:-
$800 x 4 qtrs x 10years = $32,000
So, I think it’s compelling why you would need batteries and solar.
Hi Bob….
If you reckon you’d pay $10k for a battery-bank, do ~ PLEASE! ~ get in touch with me. I have a dirt-cheap coat-hanger-shaped bridge for sale that you won’t be able to refuse.
You can buy decent-value LA batteries for $2 per ah storage (or $83 per kw), with a 3-year warranty and an expected life-span of five years, properly handled.
You can also get useful solar-panels for $1 per watt….and at the price put up enough of them to reduced storage needs.
Anyone who can’t run a household on a maximum of 10kwh per day (unless you’ve got a tribe of kids ~ in which case you’d be saving power-costs in other ways ~ shouldn’t be wasting their time mucking around with alternative power (among other things) in any case.
YOU do the arithmetic.
G’Day Jackson. You should read the battery ‘costs’ table on this web site.
Start at the far left and you will find Ampetus (the cheapest).
It ‘appears’ it may buck the trend of not being able to pay itself back…
Is it technically feasible and allowed by regulators/retailers etc. to charge your battery from the grid overnight at off-peak rates and then during the day have it supply exactly the amount of power you are consuming so that 100% of your PV generation is exported to the grid at feed-in tariff rates?
This is definitely possible and can improve the economics of batteries. But its usefulness does depend on the battery characteristics, household electricity consumption habits, and how cheap off-peak electricity is. In this case, the cost of the off-peak electricity can be thought of as the “feed-in tariff”.
As usual, it’s always interesting to read your articles. But for me, it’s been no regrets so far with my recently installed Tesla Powerwall 2 (2 months old).
But, your argument is lopsided because it focuses only on financials. It’s not just about $$. But as usual, I find in life in general that bean counters tend to forget and overlook the other intangible benefits that battery systems offer.
They are:
1. To shift excess solar energy for night time use, thus taking the load off the generators and hence this leads to reductions in carbon dioxide emissions to support a similar load base. This is an environmental factor which it is hard to put an exact $$ figure on for something that impacts the whole planet not just for now but in the future.
2. Load balancing of the grid and smoothing out the peaks of load demand which leads to less blackouts/brownouts provided no other significant impact event is present (e.g. a storm knocking out lines).
3. No need to add more generators at night if battery storage is engaged on a large decentralised scale to support an expanding population by shifting excess solar for night time use. Even, if the minimum base load generators are running, it will have to increase if the population increases. There will come a time when off-peak rates will no longer apply. For now, in NSW, there is a push to get customers onto ToU plans with SmartMetering. Controlled load plans will eventually become obsolete (e.g., Ripple Injection Relay/Decabit systems).
4. Power blackout protection (fridges for example to prevent food spoilage).
5. Power blackout protection for those who need emergency electric backup such as medical equipment in a hurry.
6. No need to buy generators for short term backup. Even then if the blackout is extended, these generators can be synced in battery backup solutions to fully charge a battery system and then the genny set can be turned off at night – noise pollution control.
6. It has not been taken in account, changes in prices in the future. In most cases electricity has always risen on average, it may roller coaster but it is an ever increasing ride up for prices, not down. Yes, I know that in NSW prices will go up about 10% in 2018 but slated for reductions in 2019/2020 due to more renewable solutions coming online. But it’s not set in stone, it can still go up.
7. With a free power source (the big yellow sun) that each day generates 8000x more energy than the annual global use of fossil fuel, it’s crazy that this source is not utilised to the max. to effectively use this free source, we need batteries to do so.
8. Tax implications – no GST to be paid for grid electricity. And my after tax dollars are more effectively used not paying a large electricity bill. So, the tax implications needs to be factored in on take home pay when considering the financial benefits. Especially, if one is in the 37% tax bracket!
9. Sheer convenience of being able to use electricity any time of the day/night (I’m on ToU trying take advantage of off-peak rates) and not have to juggle around timing loads to match solar production, what a hassle that was! I used to have timers on, for the most part it worked but very cumbersome. Now, the battery smooths out any excess usage if there was not enough solar or simply use power at night instead of waiting for the next window of off-peak rates.
9… other benefits that I may not have realised or thought of…….
But here’s another argument, fossil fuel use is about 30% efficient. So, I would take a battery’s 80% worse case scenario efficiency any day over fossil fuel’s 30% efficiency system and make some contribution to reducing carbon dioxide pollution. Whether I get rewarded for that or not is another story.
Yes, I do have a 5kW solar system (paid for itself after 5 years some time ago), yes I do have a solar thermal hot water system (can’t work out how it paid for itself but I get 8 months of free hot water p.a.) and yes I do have a Tesla PW2 (2 months old. I imported 32kWh from the grid whilst consuming 871kWh and still exported 350kWh to the grid over the first two months using the PV/Tesla Battery combo). My annual electricity bill comes in under $600 pa on average since I had the 5kW system installed – more than 1/2 of the bill are daily supply charges. This does not take in account the PW2 yet, too early. Have to wait for first 12 months use. Check back in March 2019!
So, I wouldn’t knock back the battery system just on financial payback. That’s not the sole intention of a battery system. My FiT is 11.1c/kWh and market offer TOU rates are 45c for peak, 34c for shoulder and 17c for off-peak.
Granted, the solar PV system does the heavy lifting to maximise the payback but this is a secondary intention. My primary intention is an act of defiance to the energy dinosaurs (the generator/distributor/retailer cartel) by not paying what are extortionate energy rates. In my case, the 5kW solar system has paid for itself already. So, the finanical benefits are now feeding into the cost of the Tesla Powerwall with the battery making better use of my solar production. I can sit in my house with smugness that my air con is powered by solar day and night and not paying grid rates for the use! It’s a shame that I can’t store my summer excess solar production somewhere for winter use! That requires some imaginative method! But I have negotiated with my retailer to match my off-peak rates close to the FiT they offer. That way, my excess solar production can pay for any future off-peak rates by about 95% (of course, daily supply charges still apply) but this is a convenience to have in case total solar production comes to a standstill for some reason and a practical compromise. I practially avoid paying Peak/Shoulder usage now with the Powerwall. I minimise off peak rates, ensuring loads are run during sunlight hours (via remote load controls., e.g., WiFi/Internet enabled Air Con and hot water is remotely controlled by me (not the energy co) and when the PW2 is fully charged up.
Bit long I know, but in short, shouldn’t scare people off using battery systems based on the financial payback. It’s so much more than that.
Lots of good points in that comment, Graham. Home batteries do support the grid, but unfortunately households often aren’t compensated for the benefit they provide.
One thing I will mention is, solar without batteries should cut greenhouse gas emissions more than solar + home batteries. There are no charge and discharge losses when supplying solar electricity directly to the grid and it should drive coal generators out of the market sooner by reducing pushing down baseload demand, which is what coal power is used to meet.
I think you mean to say that houses with Solar + Batteries should cut greenhouse gas emissions. Houses with solar without batteries would need grid power at night, thus greenhouse gas emissions takes place at night.
Yes, that’s another benefit, grid transmission losses are reduced by way of I sq. R. Current (amps) squared over resistance (ohms) of circuit = watts lost in transmission lines. Watts lost in circuits is presented as heat which is then dissipated into the surrounding environment. If anyone challenges this, they can look at the Distributors’ annual reports what they lose in in energy transmission. It’s the difference between what they buy from the generators and what the consumers uses. It adds to up MWh! Hence, another reason why centralised grid is a bad design.
Yes, there is no monetary compensation for environmental factors. But hey, do the coal shareholders care about that?
At the moment each kilowatt-hour of solar electricity sent into the grid will reduce utility scale fossil fuel generation by around one kilowatt-hour. In the future batteries may reduce emissions by storing clean energy that otherwise would have gone to waste, but we’re not at that point yet.
Yes, that is true. Grid exported PV electricity is sent to the nearest load that does not have PV, thus non-PV houses sources green energy (but still pay full retail rates while the PV producer receives 0-17c kWh).
However, what of the Mega Tesla Battery system in SA? Isn’t that the whole point, the big battery system capturing clean energy and releasing it as needed to avoid gas generators to kick in to assist extra demand or some other event?
Also, Sonnen is already using doing this with small scale consumer battery packs. Sonnen release battery power to grid on by their control, not the consumers.
Sonnen take over as being the electricity retailer and in return the consumers pay $30 a month for the smallest plan and get an “allowance” of electricity (7500kWh p.a., this can be a mix of grid, PV or battery).
Sonnen then controls what happens with battery energy, not the consumer. I think in their literature, they take a certain percentage of the battery storage for themselves to send to the grid at any time, regardless what the consumer’s household is doing.
It’s a package called SonnenFlat (here’s an except)
https://sonnen.com.au/en-au/sonnenflat
In closed quotes below…..
————————————————————————————
“What is sonnenFlat?
It is an energy tariff for sonnenBatterie owners. You receive a guaranteed annual allowance of energy for a low monthly fee and in return some of the energy stored in your sonnenBatterie will be used to assist in the stabilisation of the electricity grid resulting in reducing your energy bills.”
———————————————————————————–
But, the gotcha is that the consumer’s PV system must generate a certain amount p.a. If they don’t, then the allowance is pro-rated and the excess usage paid at a rate determined by Sonnen (they say it will still be cheaper than grid rates).
Essentially, Sonnen created a VPP – virtual power plant.
The reason I did not go with Sonnen was that, it was low continuous power output (2.5kW continuous compared to Tesla’s 5kW continuous), low storage (10kWh vs Tesla’s 13.5kWh) and it was more expensive than Tesla’s PW2. Both have 10 year warranty and both have warranted battery level of 10 years of service. Essentially, Tesla’s was better value for battery product offerings.
”My FiT is 11.1c/kWh and market offer TOU rates are 45c for peak, 34c for shoulder and 17c for off-peak”
Do you mind sharing your location?
I would be horrified if I had to pay those rates !
I just switched to Alinta, on a flat rate of 19.8c (after discounts) which is also available with an 11.3c FIT for when my PV array is installed in a couple of months. You should examine if their rates may suit you better…
Regards, Greg. (located in Melbourne)
Ooh, I got one. I don’t know if it’s sufficiently sneaky or insidious, but it’s worth a try… usage patterns.
If your peak loads occur during the day it wouldn’t make sense to use a battery anyway – simply use the power as it’s generated rather than storing it and losing 20% straight away. So, let’s assume that those who are more likely interested in batteries have their peak loads occurring at night.
In most states, time-of-use tariffs mean that power is a lot cheaper at night. So, when using your hard-earned battery power, a more sensible cost comparison would be to use night-time TOU prices (cheap) instead of flat rate prices (expensive) as the effective comparison rate. Not doing so would be making a sub-economic choice, falsely valuing the recouped battery power at a higher rate than what is otherwise available.
For a more evenly spaced out load, maybe the TOU isn’t worth the bother – but then in this case batteries likely won’t be either since a decent part of the load will occur when the sun’s up.
How’s that?
You are around the right area, but I’m afraid you haven’t quite put your thumb on what I think is the most overlooked mistake when calculating how much batteries are worth.
Aha. OK… how about this…:
We generally assume that retail electricity prices will continue to rise, based mainly on past price rises. However, as the energy mix changes and renewable penetration increases, the peaks which contribute disproportionately to retail electricity prices actually get smaller, so future prices could in fact go down rather than up…?
(And if that still isn’t it… could I at least have a haiku for effort?)
It seems so easy,
To count syllables,
But that’s not Haiku.
While I do believe electricity prices and feed-in tariffs as they are currently calculated will fall, that’s not what I was referring to. The sneaky thing that everyone seems to overlook is that solar homes without batteries are normally better off on a standard tariff, but everyone only seems to compare solar with no batteries on a time-of-use tariff to solar with batteries on a time-of-use tariff and that is not the correct way to go about it.
What are u smoking or does big power sponsor you . I’m in WA and I have a Telsa powerwall 2. Batteries are allowed you just have to apply
I haven’t been smoking anything, but I have been drinking a lot. I certainly did make a mistake there. I have had some Western Australians complain to me that they can’t install batteries, but that is definitely not the same as Western Australians not being allowed to install batteries. I will update the article and thank you for bringing me back on track.
Hi Ronald,
Thanks for your always interesting articles.
Regarding Western Australia and not being allowed to install batteries. Can you point out a website (or similar) where I can learn more? That seems quite dumb and I’m particularly perplexed since there seem to be a raft of solar providers hawking batteries. Thanks!
Hi Ronald,
I would have thought someone would have got it by now. The most common mistake is surely looking at the overall savings from installing a solar+battery system without realising that just installing the solar component will save you even more.
I don’t understand the current excitement about batteries either, but there can be other factors that might make them worthwhile in some cases, many of which have already been mentioned. Probably the biggest is if installing batteries avoids costly network upgrade or connection fees that you would otherwise have to pay. In that case the batteries will very often end up on top. Blackout protection was already mentioned. Discharging into the grid when there is a shortage of supply, virtual power plant style, adds to the overall value proposition significantly which is the only reason the government’s plan to install batteries and solar in housing trust homes makes sense.
Theoretically strange usage patterns or TOU tarrifs that let you cycle the batteries more than once per day might make them worthwhile, but for a Powerwall 2 it is hard to imagine a household using enough power to do that, perhaps a business or block of units might though. And finally, if you are limited in how much power you can export to the grid, so you aren’t forgoing the feed in tariff then that adds significantly to the value.
The value of all of these things is very individual though and I’d imagine for the majority of households it would be fairly low and not enough to make the investment pay off financially.
That is good and it definitely could be argued that is the most overlooked mistake. But it’s not what I had in mind. I guess I may as well tell you what I think the most commonly overlooked mistake when working out what household battery payback is:
Usually people with rooftop solar are better off with a standard tariff than with a time-of-use tariff. But when people get batteries the most cost effective tariff is almost always time-of-use. But rather than compare solar without batteries on a standard tariff to solar with batteries on a time-of-use tariff, I always see people comparing solar with no batteries on a time-of-use tariff with solar and batteries on a time-of-use tariff, which is not the correct way to go about it as it overstates the potential benefit from installing batteries.
I think WA residents should en mass install thousands of batteries an a non-violent action against the authorities.
…see if the government would throw them in prison (for doing the good things for the state).
Installing a Powerwall2 battery is like that MasterCard ad. Sticking two fingers to your Power company- PRICELESS
Just install more panels and shift your major usage to day time. Enough panels will be far cheaper than a battery, require little maintenance and don’t depreciate as quickly as a battery will. And the power company wiil be paying you. At least in NSW.
Exactly! As I said in my post at 4:49pm 8 March
An act of defiance to the dinosaur industry……..
As I have mentioned before it is not just purely the economics that drove me to install a battery. When I see my battery supplying power rather than slurping up kilowatts from the electricity company at almost 30 cents a kilowatt hour I get a warm glow (also powered by my battery).
Something I heard on the radio recently was that power companies are worried about the amount of power being generated by home and commercial systems in the middle of the day and that the current infrastructure won’t be able to cope with the load soon. How long before the power companies change the feed in tariffs so you get stuff all if the power is being fed in between 12 and 3pm ?
How long before the power companies change the feed in tariffs so you get stuff all if the power is being fed in between 12 and 3pm ?
This is just about to happen in Victoria, but it isn’t the power companies doing it, it is the State Govt.
Details:
In Victoria from 1 July 2017 solar owners will be paid a FiT of 11.3c (see here and here for details).
For the 2017-2018 FiT the ESC has:
based the wholesale value calculation on forward projections of wholesale price rather than historical figures (this is significant at a time of increasing wholesale prices),
weighted the wholesale prices to take account of the time that rooftop solar is exporting based on actual historical data from a sample of solar installations,
included for the first time an allowance (2.5c) for the “avoided social cost of carbon”.
Additional innovations that may be introduced in future Victorian FiT determinations are:
a FiT rate that varies based on the time of day in three bands (peak/shoulder/off-peak) as well as an additional ‘critical peak’ payment at times of very high wholesale prices
an allowance for the network value of distributed generation based on a final ESC report due shortly
an allowance for “the avoided human health costs attributable to a reduction in air pollution”.
I believe this is just about to pass into law (or maybe just has).
The other issue is that many people have spare roof space. While most DNSPs now restrict you to 5 kW on single phase (down from 10 in the recent past), I don’t know of any that limit any amount on 3 phase and most will do approvals for up to 30 kW for free. So consider if you have single phase and an existing 5 kW system. You can spend 12 000 on a battery, or 3000 (probably much less) on pulling a new cable from the street and swapping to a 3 phase solar meter. Then with the remaining 9 000 you can install two 5 kW systems. With that system, for every 1 kWh you would have made, you now make 3 kWh. If you have a feed in tariff that’s more than 1/3 of the peak price then this option is better than a battery, even one with a round trip efficiency of 100% and of infinite size. Even if you don’t self consume anything during the day.
Endeavour Energy will allow 8kW of panels connected to a 5kW inverter without any problems (according to their website).
This makes sense especially for those who have to put their panels on east/west facing roof. As this will reduce solar output down to about 80-85% instead of 100% facing north.
I wish I had this option given to me 5 years ago but no, it was insisted I couldn’t have more than 5kW panels facing west (I had no north roof space as this was taken up by the solar hot water panels.
After 5 years of production, it was clearly proven that I never got more than 85% production. If I had 6kW panels facing west, it would have matched the 5kW inverter. I guess the DNSP have recognised this factor allowing for changes in sun path in relation to panel orientation and that most people will never get 100% production based on a flawed assumption that everyone would have their panels all facing north. The DNSP did not factor in different angles and orientation of the panels in determining what should be the maximum panel output should be. The 5kW inverter is the thing that limits production in the end anway regardless what the panels were doing. Hence why it’s now allowed that panels can be oversized by 133% of the inverter rating to maximise production in less than ideal panel tilt/orientation.
In a perfect world, a dual axis solar tracking system would ensure maximum production.
But 8kW panels is even better, to allow more production on cloudy days/winter days. Not worth retrofitting the panels now, too costly. I would only do it when the panels die off (if they ever do).
That is all very logical,and,dare I say,masculine,but have you factored in the unadulterated joy of thumbing your nose at your electricity provider?
Since the 60c tariff disappeared in NSW I’ve been researching the idea of battery storage thinking it would be when not if. The 6c I was getting as a net feed last year meant quarterly bills of around $100. Now getting a net 15c and am back in the black. Last two quarters were 150 and 200 credit. There is no way that you can justify a battery when you are earning money from your solar array.
Well said BriAn……….But take it a bit further:- Push as much power as you’re allowed into the grid (from as many panels as you can) AND set up a separate stand-alone system to run your house…. Did that when the FIT was 66 cents.
Panels are cheap these days. so a decent FIT will not only pay for the ‘connected’ system’ but also your batteries/whatever over time.
And there are other options:- When your battery-bank is full why not flick-of-a-switch production from the stand-alone panels into the grid as well?
So much for the argument that “Because of this, there is no point installing batteries in Darwin as they will only lose money.”
Well I was one of the lucky ones to get into the first VPP in Salisbury SA and had my Powerwall1 battery and Reposit installed for $4000. South Australia will be having more of these VPP’s after the election this month.
I’ve recently considered batteries, and come to the same conclusion. It’s the opportunity cost that makes batteries unattractive.
I think the thing to consider is that it’s unrealistic to expect that the power companies aren’t well aware of the alternatives to their services. I’m sure they don’t want to loose customers, so putting a whole heap of them in a situation where it is financially beneficial to them to go off grid is not a situation that they want.
I think that if batteries got significantly cheaper and the power industry starts seeing people disconnecting in large numbers that it’s likely that they will counter by putting up the feed in tariff. This will in effect make going off grid less attractive.
I think most consumers hate the power companies so much that they would love to go off grid, but it’s the power companies that make the rules so they can stack it how they like. They will ensure that if you want to flip them the bird then it’s going to cost you.
Just musing here, and first thanks for your as usual informative, and suitably provocative, article and responses.
But what about a 10KW (or possibly larger) rooftop array feeding the max 5KW into the grid with the remainder into a battery?
I’m interested in overall possibilities of such a setup and acknowledge that 10KW will not be achieved continuously. Nor the distraction of converting to 3 phase power.
A 10 kilowatt system export limited to 5 kilowatts is an option. But because solar panels rarely provide their full rated output the loss of solar electricity is not as great as most people would expect, particularly if the household shifts some demand to the middle of the day. As a result, the economic benefit from installing batteries is not as large as may be expected. But some household are limited to exporting a maximum of 2 kilowatts to the grid and some can’t export anything and so for these households batteries may pay.
I put this question to you – given the instability and the dangerous nature of the electricity grid supply in WA, is it cheaper and more cost-effective, to put a UPS with battery backup on each and every power point in a house, with sufficient capacity to protect fridge/freezers and washing machines and all other appliances, or, to have a central storage battery for the house, for backup, connected to a hybrid PV inverter? Still sorting out the damage from the two electricity grid supply failures in the last couple of weeks.
And, this IS the state where the girl was electrocuted by the garden tap.
You are assuming that a household has to fully charge up it’s storage battery every day and fully discharges it every night – this is completely unrealistic. This is how I use my Tesla Powerwall.
I have a 5.5kw rooftop solar system and sell approximately 20kw daily to the grid for $3.30 in total. I utilise most electricity in the evening for cooking, AC, television, hot water, etc – around 4.5kw daily. This electricity from the grid costs me $1.62 daily therefore I earn $1.62 per day from my exports with a net profit of $0.00. I only use 4.5kw from my battery each night and recharge it the next day thus reducing my sale to the grid from 20kw to 15.5kw my income is $2.55 for export to the grid plus $1.62 in savings from not purchasing from the grid each evening resulting in a daily earning of $4.17, a substantial increase from $0.00 daily or $1522.05 annually. My Tesla Powerwall was fully installed for under $10,000 and assuming grid electricity goes up at the same rate it has done for the last 10 years (assumed lifespan of Tesla Powerwall, 15 years is more realistic) grid electricity will cost 1.6 times what it costs now $0.36 per kw will become $0.57 per kW. My Tesla Powerwall will pay for itself in 6.5 years at today’s electricity prices or just under 4 years accounting for increased costs of grid electricity – these figures do not assume feed-in tarrifswit will increase in line with supply costs but if they do the payback for a Tesla Powerwall could be less than 3 years. The savings are obvious but for some people, myself included, it’s the principal of telling the electricity suppliers to F.O. and screw someone else. The days of electricity suppliers shafting people are well and truly over. The accelerated addoption of home battery storage will make them pay for how they shafted their loyal customers over the years.
It is great that you are happy with your battery, but I can’t let misleading figures stand like that lest they convince someone else to buy a battery expecting it to pay for itself when it won’t.
Simply put, the 15.5kwh would be exported to the grid in both scenarios so it can be ignored for the sake of comparison.
Without the battery you would export 4.5kw for 74c and then import it back in the evening for $1.62 costing you 88c for the day.
With the battery, that 4.5kw is from you panels and costs you nothing, so you save the 88c a day that it would have cost to export and import which is $321 per year (not $1500). And that’s assuming that battery has no losses, so the reality will be slightly worse.
‘Numbers, numbers everywhere!..Nor any stop to think’.. (Apologies to the Ancient Mariner ~ and yep ~ I know it’s not haiku)
Daily storage of 4.5kw in (12v) lead-acid batteries = about 375ah A t the going rate of about $2 per ah that requires an outlay of of $745.
Double that (perhaps in two separate banks) to accommodate a 50%DOD = $1490.
Double THAT to accommodate replacement after an expected lifespan of 5 years = $2980 for an expected 10-year storage supply.
Dunno how much the confidence-factor of being in control is worth.
Dunno how much the safety of not putting all your eggs in one battery-wall basket is worth. (But given Connelly’s Law ~ “Murphy was an optimist” it’d be worth a fair bit to me.)
Try crunching THOSE numbers.
Oh… and during that period I was getting between $1400 and $1600 pa back from Origin. (@ the 66cent FIT)
(and just for the record:- I bought a second-hand (stand-by) set of ‘Vision’-brand AGM 200ah batteries for $1400 ~ paid for by the first 12-months FIT. The first one died after 8 years…so I replaced that ONE battery. Go figure.)
Scott – haiku (17 syllables?) –
“We need battery storage due to bad electricity supply.”
– WA grotty grid
Strictly speaking 5 / 7 / 5, and I think breaking words at the end of a line might be frowned upon, but try this:
electricity
poles and wires suck over here
batteries for all
Ooh, and I just one-upped myself… here’s a Shakespearian sonnet:
Alas the power system in the West
Lies langushing in need of some repair
Its frailty makes many jibe and jest
‘Fore turning to the bottle in despair
If only we could find a better way
To wave a “fond” goodbye to old king Coal
Washed out by market forces of the day
Banished hence, to history’s deepest hole
Lo, from afar the battery appears
Stores energy like hope within its heart
Financially one could be in arrears
But satisfaction glows, like love, or art
And as the sun dips gently ‘twards the dusk
We raise a cheery glass… to Elon Musk!
Brilliant!….and I’m a fan of Shakespeare……..
This isn’t correct in my circumstances!! I’ve installed a 5kW solar system & a Tesla Powerwall 2. Not only does my solar feed my house all day, it fully recharges my battery from overnight use, but I also fed 702kwh into the grid over 30 days. My FIT might I say, paid for my Supply charge plus left a credit on my account. Add to this fact that I have tank water & septic, so EVERYTHING I do in my house uses electricity!! Turning a tap on, flushing the toilet, twice as much if you’re washing or using the dishwasher, because I use electricity for both the water pump as well as the washing machine!!
I ran my air-conditioning over summer both during the day & night, or at least a fan at night & only used 5kwh in that 30 day period which cost me $1.50is!! ? So your incorrect with that statement!!
As per usual you covered the topic enjoyable well. Its the unknowns that can change things around like will they still charge u a supply charge if you do go off grid like the do with sewer and water. After all whos going to maintain the system, i from W.A.
Nice touch with the we of the never never land.
All of this overlooks the seasonal reliability of solar energy. In Melbourne we haven’t had rain for a couple of months now and very few slightly cloudy days. So I am exporting truckloads of kWh to the grid.
But in winter May-Oct I go for days and weeks with very little solar generated energy. I keep 30 min records and last year I reached a battery deficit of -730kWh.
We will always need the grid to supply energy in Melbourne in winter
Perhaps in round figures ~ but it depends upon usage AND time of usage. I managed for n years in the forest out of Marysville for 20 years without the grid. (and an assortment of horribly-expensive panels the biggest of which was rated at 64 watts)
In the worst weather (including snowfalls) I had to run the battery-charger for an hour or two a couple of times a week. Learnt that commercial battery-chargers are restricted to small charges (6-8 amps at 12v), so built my own:-
alternator out of a Celica (92-amp with a built-in regulator) bolte3d to a plank and connected to a 14hp honda engine with pulleys and belts.
All this was way back when the few purpose-designed components available cost an arm and a leg.
I did better in the LaTrobe Valley years later ~ under similar weather-conditions as Melbourne’s.
Good article. Small point: you say that the three major retailers in SA offer feed in tariffs of 15c or more. However, Origin only offers 11c currently.
Origin says their standard feed-in tariff offer is 11 cents in South Australia, but they have plans that offer up to 18 cents.
(Beware of any plan from them that offers 20 cents. That’s only for people who have recently had a solar system installed by them.)
Hi, so my issue is I have an old A/C unit that works perfectly well and would cost between 8-10K to replace, have had quotes. I am thinking of installing solar as my electricity bill runs in Summer and Winter at around $1200-1800 a bill with the other 2 bills about $800 – 1K. I have been reading all the comments and had my heart set on a battery but now not so sure, input please
At the moment there is no point in getting a battery as it won’t save you money. It only makes sense if you want a battery because you like the idea of having one and don’t care if it loses you money. Some people get them to cope with blackouts but you should consider if you would be better off getting a generator instead.
But solar will definitely save you money.
sorry I did forget to say which state I was from, I live in Sydney NSW
Sydney’s electricity is comparatively cheap by Australian standards and batteries will pay for themselves sooner in places such as Perth and Adelaide. North facing solar panels will produce an average of around 3.7 kilowatt-hours a day per kilowatt of panels with considerably more output in summer than winter.
North facing solar panels will produce an average of around 3.7 kilowatt-hours a day per kilowatt of panels with considerably more output in summer than winter.
Are you sure this is correct for Sydney? The figure for Melbourne (much further South) is 4.0kWh per kW installed per day (averaged over the whole year).
The CEC gives a figure of 3.6 for Melbourne and 3.9 for Sydney:
http://www.solaraccreditation.com.au/consumers/purchasing-your-solar-pv-system/how-solar-pv-works.html
This is under optimal conditions. The figure I gave was for a run of the mill, sub-optimal system.
The US PVWatts site gives an average of 3.8 for Sydney and gives a breakdown of average production by month and allows one to fiddle with the parameters:
http://pvwatts.nrel.gov/
ok thanks so solar it is but with the capacity to add a battery later if pricing drops to a reasonable price. will definitely look into it asap
I generally recommend people not pay extra to make it easier to install batteries in the future as battery storage is a rapidly changing field. For example it is possible you will be offered a free battery system in the future as part of a virtual power plant such as the one that is being trialed in South Australia and you may prefer that. But if you are determined to make it easier to add batteries down the line you can pay extra for a multimode inverter (also known as a hybrid inverter).
But if you are determined to make it easier to add batteries down the line you can pay extra for a multimode inverter (also known as a hybrid inverter).
G’Day Ronald.
If you buy a Tesla PowerWall2, you don’t need a hybrid inverter because the PW2 is AC coupled (i.e. to your switchboard).
Battery systems like the Powerwall 2 are a major reason why I don’t recommend people pay anything extra to prepare for batteries, although a multimode inverter can get around DNSP inverter limits which potentially could be a problem.
Hi Ronald,
I’d be interested on your take on battery storage in relation to the Reposit VPP scheme? We live in Victoria, so would most likely sign up through Powershop.
We don’t have a battery storage system at the moment and wouldn’t buy one until we are sure we can make a financial return on it. We do have 3.5kW solar system (3kW inverter) and it generates more power we can use for 9 months of the year. On our most recent (summer) bill we used 702kWh of grid power and sold 925KWh of solar output to the grid. This hurts given the price difference between imports and exports is about 2.5:1.
I’ve only just started to look into the Reposit/Powershop scheme and I so want it to make a battery viable for us, but I have a sneaking suspicion that the $1/kWh credits of which they speak may only be available for a matter of hours each year. What do you reckon?
I’ve only just started to look into the Reposit/Powershop scheme and I so want it to make a battery viable for us, but I have a sneaking suspicion that the $1/kWh credits of which they speak may only be available for a matter of hours each year. What do you reckon?
G’Day Stan.
I’ve been wondering the same thing for a year or more. I recently posed a question on another site asking anyone about Reposit Grid Credits, and received a reply from ‘someone’ telling me that Reposit only supplies the hardware / software, and it is the ‘retailer’ that determines who gets a Grid Credit, and when, and for how much. Basically, telling me nothing…
However, by my own calculations (and opinion), a $1GC would only happen *IF* the wholesale price on the NEM (National Electricity Market) gets over $1000 per MWh *AND* you have the grunt in your inverter to export 1kW (or more) during that peaking event. BUT… those events are very short (in time), so in reality, you need to dump much more than 1 kW for 1 hour. You need to dump say 5kW in the shortest possible time (i.e. 12 minutes minimum).
And for your trouble, you only get $1.00 (which is less than the wear & tear cost on the battery.
I’m not convinced a Reposit can actually earn you any money, and if you go to their web site, there are no actual ‘figures’ anywhere to be found (I’ve looked). But you ‘will’ find them saying it will ‘may’ reduce your battery payback time by 50% which sounds fabulous, but isn’t backed up with any real data (that I could find).
You also need to consider the limited range of power companies that can work with Reposit, *AND* how much more they charge for their power… Which appears to be in the upper echelons from what I have looked at (example: PowerShop)
I may be totally wrong of course, this is just my opinion…
Regards, Greg.
I may be
The other thing to keep in mind that if all of us “battery lovers” keep buying batteries because we enjoy thumbing our noses at the Electricity Companies the price will come down a lot quicker with that increased uptake for the rest of the population – even Mr Brakels himself. When he deems it financially viable to buy himself a battery he should come back on here and thank us !
I have a battery and despite Ronald Brakels’ excellent and sound logical advice I am quite sure looking back on it that I would still buy one again as otherwise I would turn into a Scrooge – turning every last appliance off as dusk fell and begrudging even the phone charger it’s few overnight volts until the sunshine returned. In fact probably going to bed early like an ageing pensioner to save on the lights and TV after enjoying a bountiful solar day forced to watch my photo-voltaic arrays slowly fade towards the zero line and the merciless power used graph start rising upwards.
Okay so the battery steals some kilowatt hours each quarter to charge up that I won’t get the power company’s miserable 9 cents for and the upfront battery cost is high. But to me it is like delaying going to the dentist when you don’t have health insurance even if that insurance is in purely dollar terms, not financially worth it. Once you have got over the hurdle of paying for the health insurance you will at least be prepared to use it and go and get them fixed. The battery allows me that peace of mind that I am not running up a bill for the night use that will arrive in three months time but am paying as I go (admittedly more than I need to) with the high up front cost of the battery.
Also, unlike Mr Brakels I am sure, I buy a Tattslotto ticket every week. Not much chance of that producing a positive return either but I live in hope 🙂
A couple of vaguely cognate points. First – nomenclature. I can’t speak for other states, but in Western Australia, when the Barnett Government was first elected, they went to the electorate with a promise to introduce a “feed-in tariff” (FiT) of $0.60 per kWh GROSS – ie the home generator would be paid the FiT for every unit generated, whether exported or consumed domestically. Once they were elected reality hit and the FiT was reduced to $0.40 per unit (it later was reduced to $0.20, then ceased altogether) and it became net, ie only electricity which was exported to the grid received the FiT. However there was also another means of receiving money called the Renewable Energy Buyback Scheme (REBS) which was an agreement between the utility and the generator to trade power ie the utility would purchase all excess power fed to the grid.
So as I see it, there are two different processes at work. FiT, which is a subsidy paid by the Government to the generator, and REBS payment, from the utility to the generator. FiT was initially to have a very limited life (10 years from time of commencement), whereas REBS is ongoing, subject to the whims of the utility as to how much was paid. At present it is a rather measly $0.07 (less actually) per unit. My power bills are quite plain on the nomenclature, with two separate entries – “Feed-in Tariff” and “Renewable Energy”.
Interestingly when I signed up (for both FiT and REBS) it was made quite plain that should I get another inverter for my system (or replace with a larger one) I was automatically disqualified from receiving FiT, but not REBS. When I did install more panels and another inverter, I found that I was still receiving the FiT. After several phone calls to the utility, I finally had to write to the then Minister for Power (Dr Nahan), and he replied that yes, I was quite correct and should not be receiving any further FiT. The day after receiving his reply I received another phone call from the utility informing me that I WAS entitled to receive the FiT, and I had to read the letter over the phone to convince the caller that the Minister has said …
The Minister in his reply was gracious enough to say that his department would not attempt to recoup any excess payment. (!)
A quick look at my spreadsheet shows that from Oct 2013 I have exported 7,064 kWh, which, had I received the FiT, would have gifted me about $2,800, plus the REBS of just under $500 which I HAVE received.
Second – hidden benefits. I installed 11 kWh of lead acid batteries in 2013 to store power from my 3.2 kW rooftop panels. (Cost of the batteries was $11,000 including installation). I have three electric vehicles, two of which carry their own solar panels and use the power to supplement my pedalling input. The third is a 4 kW electric scooter which, since I have purchased it, has saved me roughly $15-$16 per fortnight in petrol for my internal combustion fuelled motorcycle. (The figures – like almost anything apart from initial purchase costs – are very difficult to quantify precisely – so I just say $15 saved per fortnight and be done with it.) I have the choice of recharging the scooter during daylight hours free or recharging from my house batteries, and then having them recharge the next day, or I can recharge overnight and take extra power from the grid during off peak hours. Of course there are the imponderables that arise such as not using fossil fuels to charge the scooter and reduction in pollution as well as the not inconsiderable problem of traffic congestion caused by so many cars on the roads (whether petrol or electric or hydrogen powered) cf scooter/motorcycle traffic.
I stopped receiving FiT in Oct 2013, but my latest power bill shows that I am in credit to the tune of $15 – and have not paid ANY thing for electricity since about Oct 2010. I don’t count the supply charge, which is an impost on EVERY user of electricity in the state, and is meant to cover the “poles and wires” of the distribution, not generation, of power. However, I add that there is a supplementary payment from the Government to those in need, such as pensioners, unemployed etc, but this does not meet the entire cost of this charge.
I’ll leave it to others to decide whether my figures justify my decision to install batteries for my house. But myself I have no doubts about the move.
In reading back on this post, I note an error. I initially wrote that the batteries cost $11,000, including installation. However, in checking more closely I found that batteries actually cost $4,620 and cost was installation of the batteries (AND a smart charger) was $2,346.
Suggestion: as different rules, different schedules of utitility company charges and rebates/FIT’s, etc, and, different products availabilities, apply, depending on location, I am wondering whether it would not be a good idea to modify the Comment submission form, to include an extra, mandatory, for publication, field, of state (and, an optional extra field of locality, also for publication, if entered), so that readers of, and, responders to, posts, know where the poster is coming from.
Whilst it might not be clear, in my last previous post above, the word “state” shouid be “state/territory”.
I am currently building a second house on our 12 acre property and have been told that I cannot get any extra electricity, only the same amount allotted to a single house. This is not enough to run 2 houses and a home workshop with air conditioner, water pumps and sewage systems. I do not have 3 phase power. It seems like my only option is to get a battery system and a large solar array to power my homes.
If it avoids the need to pay for a grid upgrade or it impossible to get the power you need from the grid then that is the best justification for batteries that there is. Firstly, regardless of anything else a large solar array will pay for itself quickly and reduce your draw from the grid during the day – if your biggest loads are during the day, e.g. air-conditioning while it is hot and sunny then just adding solar might be enough to keep you under what you are able to draw from the grid.
If 3-phase is available in your street then it should be possible to upgrade your connection to 3-phase and then you’ll essentially be able to pull three times the power from the grid (you’d have a certain number of amps that you can pull per phase so with three phases you have three times the amps than one phase) – even if you just hook up one phase to each house you’d probably be looking OK.
But batteries sound like a good solution too in that case and while they won’t pay for themselves just from the electricity pricing difference between import and export, once you take off the three-phase upgrade cost or factor in the ability to get the electricity you need if there really is no other way then of course they are worthwhile. You’d probably want to look closely at both the capacity and peak discharge rate possible from the battery to make sure that it will be able to keep your total import below what is available from the grid.
Thanks Bret, I think 3 phase is available. But I am sure I could buy a good battery for the cost to upgrade to three phase. Air cond during the day is ok, it is an induction cook top during the night is the problem. I will have to look into the performance of the battery for when we need it at night.
easy-peasy…..Chuck out the cook-top and replace it with a $40 lpg 2 or 3 ring from Bunnings.. Not only does it cook faster and cleaner than any electrical must-have (eg instantaneous hot-water service) but is much cheaper to run. (and if you wanted to go to the trouble it’s cost you NOTHING to run.)
it will be interesting to see how the economics of a battery stack up when tied to a reposit scheme /VPP. The extra income per kW/h may drive the IRR enough to justify the expense.
Don’t lump a Reposit with a VPP, they totally different.
I’m in broad agreement with the model. And a good analysis. But…..
13.5kWh for a Powerwall, not 9.7
Don’t those 4 extra kWh’s push the model into the black…just.
On the assumption the
1) battery is flat at sunrise, all 13.5kWh consumed.
2) Solar array has enough spare capacity to fully charge it .. on a winters day.
And, in summer, with several hours of extra sunshine, the battery would charge before sundown, and the excess power fed in at 15c.
1) Seems to me a household must know what power the household consumes after sunset.
2) The solar array is dimensioned to produce 13.5kWH at whatever round trip efficiency (16.88kWh) + energy consumed by household during sunshine, on a winters day.
Then you should be free of the grid in winter, and exporting power to the grid in the summer.
What I marvel at, is the lack of detailed geographical information on the average hours of sunshine vs cloud time by location.
That information is being collected by the solar arrays out there. But where is it published online?
Is there an online database with that information?
A Powerwall 2’s capacity is 13.5 kilowatt-hours when new but that will decline over time. More importantly no normal household will use it at 100% capacity. The 9.7 figure I used is what I call optimistic. If the average usable capacity over its lifetime is 12 kilowatt-hours then that represents a capacity factor of 80% which is high.
The PVwatts site:
http://pvwatts.nrel.gov/
Will give average generation you can expect by the month. But you’ll probably have to be near a major population center for it to have data for your area. Also, since it is American, it will often try to send you to a US location, such as Melbourne Florida, so watch out for that.
Average sunshine levels (for the whole country) are on the BOM web site. See:
http://www.bom.gov.au/watl/sunshine/
No need to use American estimates…
This was a very interesting article, although I had been including feed in tariffs in my calculations I had not been including the fact that only 80% of the battery capacity was available.
A couple of questions though;
1: Is it correct to assume that a fully charged 10kW battery while only giving back 8kW will still require another 10kW the next day to be fully recharged again?
2: If the battery is only partially charged ie to 6kW only about 4.8kW would be available?
3: I live in WA and Western Power has a 5kW Inverter limit for feed in and I currently have a 5kW inverter. So if I use a battery and replace my inverter with a 5kW Hybrid inverter I assume I would still be able to feed in any excess power. Whereas if I use a batter with its own inverter (Powerwall) I would exceed the 5kW limit and would therefor not be able to feed in excess power.
Could you confirm (or refute) this assumption as it is significant for my calculations.
Peter,
Re your query on inverter capacity you may find this link useful.
https://www.infiniteenergy.com.au/maximum-residential-solar-pv-system-size-wa/
Also if you add another inverter or replace your present inverter you may find yourself losing your feed-in tariff. (See my post of 13 March.) Further, you could also find yourself unable to replace your inverter due to “compatibility” issues if your existing system is not fairly new. I tried to add an additional 1 kW of panels to my existing system but three different suppliers said my system was too old and I’d need to replace everything to be compliant with new regulations. You should check those points out with a couple of suppliers.
The WA issue relates to retrofitting batteries to already installed solar systems. “Unfortunately, retrofitting a solar battery with an existing inverter 2.8kW to 5kW in size can be a complex process, depending on the state in which you reside. In WA for example, Western Power has limited the aggregate inverter capacity for single phase homes at 5kW, meaning we’re unable to use the additional hardware required to achieve the integration of a battery.
These rules (which are governed by Western Power) may change, however the time frame could be anywhere from six months to a matter of years. The only current option is to replace your existing inverter with a compatible hybrid inverter, and to replace your existing panels.”
Your cost of capital at 1% seems very low. My bank currently charges 11.99% interest on personal loans.
You do not mention GST which is charged on top of grid tariffs but is not involved in the feed-in tariffs.
Lots of good communication by everyone.
What if we all get off the grid altogether and turn our houses to off grid houses, is this a viable solution for people in Australia as we get an abundance of sun all year round,
There has to be a solution to all of this palava, i fear that the way the greedy corporations are treating us with big profit margins and high salaries and profits for shareholders it is inevitable that prices will rise out of control for most people.
Oil and gas will not be here forever we need to have answers the sooner the better.
Solar YES Batteries YES but not push back into the grid for greedy VPP corporations to dictate what prices etc they will give us. Lets keep the power for our households. is it a viable consideration.
Ian