The scene in the Brakels’ household last Sunday morning.
On Sunday morning the program Sunrise had a segment on solar power and battery storage. While I am glad whenever popular TV takes the opportunity to educate people on these topics, that wasn’t what happened here. It was the opposite of education, as anyone watching it could easily come away believing the following three things:
1. Battery storage pays for itself.
2. Battery storage cuts CO2 emissions.
3. Rooftop solar needs batteries to be worthwhile.
None of these things are true.
Battery storage does not pay for itself when used on-grid and it may be years before it does.
Home batteries do not cut emissions, they increase them. In the future they may allow us to decrease greenhouse gas emissions, but that point is still years away.
Rooftop solar by itself is cost effective. It is adding batteries that can make it uneconomical. The mistaken belief that rooftop solar needs batteries to be effective is causing harm to both the solar industry and the environment, as people are delaying installing rooftop solar until batteries become affordable.
Batteries Can’t Give You $1 A Day Electricity
At the start of the segment, the cheerful presenters of Sunrise looked into the camera and said:
“What if you could spend less than a dollar a day on all your household power?”
“It’s the latest trend in renewable energy with some households saving thousands of dollars a year and it’s all thanks to one small battery.”
The small battery they are referring to is the 100kg Tesla Powerwall. But at this time neither this battery nor any other is capable of saving you money when used for on-grid storage.
This is very easy to determine by looking at how much an installed Powerwall costs and estimating how much electricity it is likely to store over its lifetime.
The Cost Of A Powerwall
A Sydney Hairdresser interviewed by Sunrise was asked about installing his Powerwall. He said it cost him:
“Roughly ’round about $14,000.”
He paid $14,000 with for a Powerwall with an inverter that allows him to use it when the grid is down1. If you want a Powerwall without the ability to use it during a blackout, one can be added to an existing solar system for as little as $9,900.
The Lifetime Storage Capacity Of A Powerwall
A Powerwall has a 10 year warranty. I think it is reasonable to expect it to last two years beyond this point. Because lithium-ion batteries deteriorate from use and degrade over time if they are not used, I don’t think it is reasonable to expect it to last much longer than this. But I will be optimistic and assume that it survives for 14 years.
From looking at its original warranty, I can calculate that if a Powerwall lasts 4 years beyond its 10 year warranty period and is used at its full available capacity each day, which is unlikely, then it would be able to store a total of approximately 21,650 kilowatt-hours2.
If we divide the $9,900 cost of an installed Powerwall by the estimated 21,650 kilowatt-hours of stored electricity it could provide, we get a cost of 46 cents per kilowatt-hour.
Each kilowatt-hour stored will result in the loss of the feed-in tariff that would have been received if it had been sent into the grid. This generally ranges from 5-10 cents. If we assume the home has a 6 cent feed-in tariff, with efficiency losses, that would push the cost of storage up to 53 cents per kilowatt-hour.
Paying for the cost of capital would push the cost higher, but I am going to be extremely generous and assume the cost of capital is 0%. This has the advantage of keeping the calculation simple and saving me a lot of wear and tear on my calculator, but has the disadvantage of ignoring a significant portion of the real cost.
As the cost of each kilowatt-hour stored in my very optimistic scenario comes to 53 cents per kilowatt-hour and the cost of grid electricity in Sydney is around 25 cents on a standard tariff or around 45 cents during week-day peak periods on a time-of-use tariff, it is clearly impossible for a Powerwall to save people money. It simply cannot pay for itself at its current price.
The Cost Of Battery Storage Has To Fall A Long Way To Pay
If a family on a time-of-use tariff only used stored electricity during the period with the highest electricity price each day, then even with my optimistic assumptions, a Powerwall would have to be installed for under $7,000 for them to break even.
For a family on a standard electricity tariff it would have to be installed for under $4,700 to break even.
So even in an unrealistically optimistic scenario the installed cost of a Powerwall would have to be thousands of dollars less in order for it to pay for itself. This means for Sunrise to suggest people can save money by installing a Powerwall at its current cost is completely nuts. It is as nutty as a lumpy chocolate bar.
The Powerwall Is Very Expensive Backup Power
The Sydney Hairdresser interviewed by Sunrise said one of the reasons he bought a Powerwall was to provide backup power during blackouts.
Unfortunately, a new Powerwall can only provide around 3.3 kilowatts of power for about 1 hour and 40 minutes and this will decrease as it ages. One hair dryer can draw 2.2 kilowatts of power. This means it is not possible to serve many customers for very long using a single Powerwall.
Generators that can provide more power and operate longer off a single tank of fuel than a Powerwall can be bought for less than $1,000. They are smelly and noisy, but are a more cost effective source of back-up power for most businesses. And though it may seem strange, because blackouts happen so rarely in Australian cities, generators can be better for the environment than using batteries.
Reece Turner From Solar Citizens Did Not Set Sunrise Straight
Towards the end of the segment, Reece Turner from Solar Citizens was interviewed. I was looking forward to him setting the Sunrise presenters straight on a few points, but he didn’t do this. Unfortunately, both Reece Turner and the Sunrise presenters incorrectly think home battery storage decreases emissions rather than increases them.
Battery Storage Does Not Reduce CO2 Emissions
Currently in Australia, if a home doesn’t have battery storage, any rooftop solar electricity not used by the household is sent into the grid and reduces fossil fuel generation and so reduces CO2 emissions.
If that solar electricity was instead stored in a battery that was 100% efficient, then the situation would be basically the same. The stored solar electricity wouldn’t reduce fossil fuel emissions during the day, but it would reduce them at night when the household uses the stored energy instead of grid electricity.
But there is no such thing as a 100% efficient battery. There are always losses. Depending on how it is installed a Powerwall is only going to be about 83-92% efficient. This means more energy has to be put into the battery than can be taken out and so each kilowatt-hour of usable stored electricity results in more emissions than if the solar power had been sent directly into the grid.
Batteries May Reduce Emissions In The Future
In the future batteries may reduce emissions by storing renewable energy that otherwise would have gone to waste, but Australia is not near this point. This includes South Australia which generates a greater portion of its electricity from wind and solar than any other state.
Rooftop Solar That Can Power A House Costs More Than $3,000
The presenters asked Reece Turner how people can go about getting rooftop solar. Personally, I recommend starting with three quotes. But this wasn’t what Reece suggested. He said he had solar installed recently and that:
“You pay about $3,000 for a system that completely electrifies your house.”
Now maybe Reece misspoke here. It’s easy to do when you are on a TV program. It is a pretty unnerving experience. Reece Turner most likely leads a very energy efficient lifestyle. But it is not possible to generate enough electricity to match the consumption of the average Australian home with a $3,000 solar system. In Sydney $3,000 is less than the average price of a 1.5 kilowatt system, which is the smallest size normally installed. And I would recommend getting a system with high quality components from a reliable installer that costs a little more than average.
A 1.5 kilowatt system is only going to produce around 5.5 kilowatt-hours a day in Sydney. That is less than one-third the daily average of 19 kilowatt-hours a typical Sydney household of three without gas uses. To produce that much a day on average would require around 5 kilowatts or more of rooftop solar. In Sydney a quality system that large is likely to cost around $7,000 or more.
Not Getting Facts Straight Hurts The Solar Industry
Suggesting that people can get a system that will power a typical home for $3,000 hurts installers. It will cause people to anchor the price they expect to pay too low and when they find out what it actually costs to install a system large enough to match their home’s consumption, a considerable number won’t get solar because they will feel they are getting ripped off. This is despite the fact that installing quality rooftop solar has never been cheaper.
Pitching a low price for solar on Sunrise will also make people think the cheap systems they see advertised in newspapers, that use low quality components and low quality installers, are a good idea. After all, Solar Citizens appeared to suggest they are okay. And when these low quality systems have problems and people find the shonky company that installed them has no intention of rectifying them, it puts them off solar and five of their friends.
Suggesting that batteries can pay for themselves also hurts the industry because people will inquire about the cost of rooftop solar plus batteries and when they find out how much it actually is, many will give up on the idea of installing solar. Here at SolarQuotes where we interact with thousands of people a month, we are hearing this more and more. If people think solar power needs batteries to be effective, that hurts the solar industry.
We’re All In The Same Boat
It is not surprising that Sunrise arrived at incorrect conclusions about battery storage. There are marketers and PR people whose entire job is to convince the media to portray the product of whoever is paying their salary in a favorable light. And the media also has a strong tendency to favor ratings over fact checking.
But when false or misleading information starts being spread, those who care about solar power and the future of our environment need to be ready to counter it with the truth. Solar installers, Solar Citizens, and the vast majority of the Australian population, all want clean renewable energy. We’re all in the same boat. We just need to make sure we’re all rowing in the same direction.
Solar Citizens is doing great work promoting solar power and pushing politicians to act in the interests of their constituents and not fossil fuel interests. But more has to be done to stop misleading information that harms the solar industry, whether it comes from marketers with a product to sell, or simply from unrealistic optimism.
Australians need to know that the best way to get their bills down right now is high quality solar plus energy efficiency. In a few years time they can add affordable batteries as the icing on the cake. Until we are united in that message many people will continue to buy low quality solar, or simply put off solar altogether because they can’t afford to shell out $14k for a Powerwall right now.
Footnotes
- It is not possible to install a Powerwall, a multimode inverter, and 42 panels for only $14,000 as the TV graphic suggests. And unfortunately, rather than pay itself off in 4-5 years as the owner says, it simply cannot. Ever. Not at that installed price. (This footnote was altered on the 24th of September to better match reality) ↩
- The Powerwall has a nominal capacity of 6.4 kilowatt-hours and its original warranty was for 10 years or 740 cycles at 85% of nominal capacity, followed by 1,087 cycles at 72%, and then 2,368 cycles at 60% of nominal capacity. I have assumed it will be able to provide 3,287 cycles at 60% of capacity. The percentages provided by the warranty are minimums, but I have used them as the Powerwall’s capacity may fall below 60% in the 4 years I assume it will operate after its 10 year warranty period is over. ↩
About Ronald Brakels
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Are we nearing the point where it’s close to being economically viable to set up rooftop solar with battery storage, if we were to build a house where we were not connected to the grid and therefore not up for those initial connection costs ? Most cost comparisons appear to be for people already connected to the grid. I’m not talking about those situations where people are miles from a supply source and it’s more economic for them to have their own system, due to the enormous capital cost of putting in a long supply line from the existing grid, but a situation where the supply line passes right by the property.
Well, it can easily cost over $30,000 to build an off-grid system that will give the typical family almost as much convenience as being on the grid, so the connection fees would have to be fairly steep to make it worthwhile. But a two person household that was prepared to be careful with their electricity use in the evening could get by with a considerably cheaper system and might find it worthwhile to live off-grid if the connection fees were $10,000 or less.
re. “Footnotes” :- The Powerwall’s nominal capacity of 6.4 kwh translates (in raw numbers) to 530 AH @ 12volts.
You can buy 530 ah LA storage for $2 per ah = $1060
Allowing for a reasonably low DOD of 35% you’d buy 3 x 530 ah of storage for $3180.
That’s to say you could buy FOUR such (1590 ah) systems for the price of ONE Powerwall.
How long each unit would last is sheer speculation (and/or media/advertising assertions); but we DO know from experience that reasonably good LA batteries, properly used/maintained can be expected to last about six years. (and I’ve had 2nd-hand units last 8 years after a couple of years of ‘standby’ use.)
In any case, if you had to replace a brand new LA battery-bank over the 10-year CLAIM for the powerwall you’d STILL be far (60%) better off financially than buying a Powerwall. And (given the plentitude of materials and manufacturing costs) be kinder to the environment too.
And the clincher is that you would HAVE THE OPTION of using your batteries in conjunction with the grid or entirely independently of it.
ps. has anyone got figures comparing the manufacturer’s profit-margins for ‘Powerwall’ storage as compared to LA?? I’ll lay odds such figures would be quite revealing as re. comparatives prices…..And account for the readiness to spend money on speculative advertising. (check out ITV –> Ishop tv)
My off-grid system cost me around $3500 for 12 used 180w panels, 4 x 280ah SLA batteries, and Australian electronics apart from a 3kw chinese inverter.. It has already half paid for itself in 2 years. That said, I really couldn’t give a rats if it carks it prematurely because the main object of the system was to allow me to nark the Queensland government by selling the whole output of my 64 panel grid connect system for 52c per kw. As it is, I can run the house for two days on battery alone and if the sky falls in, I have both the grid connect system and a 6kw Honda generator to fall back on. My house is somewhat more energy than the average one, with average consumption under 5kwh per day. A colleague (actually an ex colleague because he fell of his perch a whole back) had an even more cost-effective off-grid system. That one was constructed out of crap components including a motley collection of discarded panels, junkyard truck batteries and 12v inverter, however it ran his house for over 35 years,supplemented by a kero fridge and a generator to run the washing machine. It would be simple for anyone needing a bargain basement solution to do something similar today. Mind you it would be preferable not to have a tribe of yard-apes with the attendant 20kwh plus per day energy expectations.
Yes Minister!
Quite right.
It’s simple and satisfying beyond price to see such systems work: I’ve been doing it for years.
(and, consequently, fulfil all my needs on 2 kwh per day. (live by myself)
……..and the innovations are without limit. eg. it takes about an hour to convert a kero fridge to run on lpg….and running a turbine into your battery-bank as a supplement is a no-brainer.
The PM WILL be pleased!
Was interested , that the idustry marketers are leaving us in the dark, and yes we do have “Anchor price” expectations, ; but who are we to believe!I’m a complete greenhorn, when it comes to solar electricity!
A word to the wise from the Ancients. Alex. Get as much information as you can get from any source.
The Suck It And See.
…..and do what suits your needs.
Many consumerables you buy usually depreciate in value. That is a concept usually welll understood by anyone who purchases a vehicle and keeps it for 10 years. So if you was to apply that concept to batteries what then is the benefit derived from them as a depreciating asset. Will the simple answer is return on investment (ROI). We have just installed a 1.2 kW Enphase battery which at worst will save about $75 PA which on an investment of $2,200 is about 3.75% tax and risk free. The ROI will increase as the price of energy increases year on year.
Return on investment, or ROI, is certainly an important metric when looking at battery storage. Unfortunately the return can’t help but be negative for on-grid storage if the cost of storing one kilowatt-hour is greater than the cost of using one kilowatt-hour of grid electricity.
The only possible, although unlikely, exception to this would be if the battery system was able to provide back-up power, a very high value is placed upon this ability, and a greater value is placed upon back-up power supplied by batteries than by a generator. But I don’t think there would be many people in this category.
You are correct in what you say if you seek to amortise the cost of the unit over say 10 years [its useful life] then the cost per kWH is considerably more than the average kWH usage tariff [including inflationary increases]. But that is only one way of looking at the efficacy of installing batteries. If you fully expense the cost of battery storage then the loss of opportunity cost between investing the capital [before tax] and ROI tax free is about 2%. From a cash flow point of view the real question is where are the funds best employed.
BUT what’s with the ‘on-grid storage’ mantra?? (including the Powerwall crap)
That’s like touting the esoteric advantages of buying a 3-legged racehorse.
Because off-grid storage pays — or at least it does for people who don’t like using kerosene or whale oil for lighting or fueling a generator if they want electricity at night. On-grid storage is a different kettle of whale oil and isn’t going to pay for most Australians, although it can in the right circumstances with a large enough subsidy. Maybe if you do it all yourself it can pay but that’s not something I do or can recommend.
The greatest error made in this kind of debate is the insistence upon referencing ‘Power-Wall’ type storage systems. It’s a bullshit concept the very principle of which flies in the face of ‘renewable’ precepts: the bloody things have no value UNLESS they’re connected to NON-renewable grid-power!
Suitable reasonable-quality lead-acid batteries are still far and away the best option in most respects. Including cost-efficiency on any level.
Other than that the commentary may be generally accurate, but not quite er…. ‘straight from the horse’s mouth’:- “Battery storage does not pay for itself when used on-grid and it may be years before it does.”
But there are too many variables (including size of your system and location) to be horsematic…..sorry: dogmatic.
eg. depending on pricing (including your particular FiT) and your usage (quantity AND TOU) it might pay you to feed ALL your (cheaply) oversized solar production into the grid and use a battery-bank (particularly one bought ‘at the right price’) to run the house on off-peak grid-power during peak-hours via batteries charged at off-peak rates. Neigh?
Though other considerations also come into play, such as your particular ‘service-to-property charge’.
My favourite option is still a stand-alone system. Was offered a 5kw system (including regulator/inverter but not including batteries) based on tier 1 panels (for what that’s worth) for $4000. (Euro Solar promotional offer).
At the end of the day the most fundamental way to save dollars and the environment is to REDUCE usage. (WHOA! dammit!)
Unfortunately, charging battery storage with cheap off-peak electricity to take maximum advantage of a high feed-in tariff can’t pay for itself at current battery costs. Even if a battery is charged off-peak for 10 cents a kilowatt-hour which lets you allows the household to receive a 44 cent feed-in tariff during the day, the 34 cent difference isn’t large enough for it to pay for the cost of storage. But it is definitely an interesting application. There are people in Queensland who will be on a 44 cent feed-in tariff until 2028. I’m sure some of them will be interested in trying it once battery storage falls enough in price to make it worthwhile.
As for Euro Solar, I do not recommend using them. For now I will just give one reason why. Here is a link to Australian Competition & Consumer Commission giving details on how they fined Euro Solar $145,000 for shonky business practices: https://www.accc.gov.au/media-release/145000-penalty-for-fake-testimonials-and-false-solar-energy-country-of-origin-representations
EDIT: Just to be clear, when I say battery storage can’t pay for itself at current battery costs I am referring to buying a new battery system and paying to have it installed. If you salvage old batteries, install them yourself, and don’t put a value on your time and effort then you may get a different result.
I wouldn’t argue with any of that, Ron; but I think the point is that one shouldn’t ever take claims, assertions or ‘what everyone is doing’ at face value. There are always options that should be considered, and every mistake we make in life is a result of overlooking a better option.
And always remember:- just because you’re paranoid doesn’t mean they’re not out to get you. (I suffer from Grandpa Simpson Syndrome.)
A comment from my favourite mentor (the fact that he’s a fictitious character means nothing except that he’s not trying to diddle me!):-
What are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the unguessable “verdict of history”–what are the facts, and to how many decimal places? You pilot always into an unknown future, facts are your single clue.
Read more at http://www.notable-quotes.com/h/heinlein_robert_a_ii.html#qsS5sJHKiK65kHAh.99
Your comments, incidentally, reiterate another favourite issue: cut your cloth to suit YOUR needs.
I’m on the 66 cents per kwh contract until 2024. And my initial battery-banks were as many-as-I-wanted used ( +/- 1000 ah batteries recycled out of bulldozers, log-skids and timber jinkers,etc.
Generally only lasted 10/12 months. but good value at the price. (free)
And made good heat-absorbing walls and floors when filled with water.
The PowerWall is a very expensive option even at the advertised price.
Problem is that you can’t actually buy one at that price.
They are only available to a few carefully chosen customers as part of a package supplied by what are effectively Tesla/Musk subfranchises.
Dozens of companies are advertising “PowerWall Ready” systems and are happy to take your money with the PowerWall “coming real soon promise!”
I’m pretty sure that the Musk house of cards will come crashing down long before the PowerWalls are really on the market.
The wheels are already falling off the Tesla Model S.
Google Tesla Whompy Wheels
Oh, they’re not available? I guess the people I know who have them installed actually have fake Powerwall shaped boxes on their walls to trick me?
Tokenware!
I can buy a Lead Acid battery or even a Lithium battery online at a known price and have delivery within a matter of days.
Try that with a PowerWall.
Mind you, if people are crazy enough to plonk down a thousand dollar deposit on a mythical Model 3…..
BTW how many people do you know that have got a PowerWall?
How many have actually been delivered in Austrlia?
I visited one today. I saw stock of Powerwalls ready for shipping to installers. today. I don’t supply them BTW, but they certainly are very real. There have been several container loads delivered in Australia, which are sitting n a variety of warehouses as the installs roll on.
Cosidering that the “off the hook” demand for PowerWalls was enough to spike the share price in preparation for another billion dollar fund raising I am not at all surprised that they can afford some nice window dressing.
Come back and tell me when they are actually on sale to the public and you have some genuine customer reviews after some time in service.
If all cooking, refrigeration and hot water is on gas then you only need minimal power for lighting and television. Then this argument is irrelevant .
And the argument for buying a PowerWall gets even weaker.
Oh, did you know it’s obsolete already?
Tesla CEO Elon Musk announced earlier this year that the company was already working on second generation Powerwall, Tesla’s home battery pack. He made the following comment during an exclusive event for Tesla owners in Paris:
“We are coming up with the version 2 of the Powerwall probably around July or August of this year, which will see further step changes in capabilities.”
You hit the nail on the head David. ….and there are even more variations on a theme.
A homemade hot water system is simple and cheap to build: there are a dozen options, but mine is a coil of black poly-pipe in a sealed box (will heat water even when it’s snowing if the light is bright) which is then run into an old HWS cylinder and then through an instantaneous lpg HW heater on the delivery side.
Gas is not the best option for refrigeration, given the variables. Nor, though, is running a fridge through a battery-bank. My favourite solution is to have as many dedicated ~ cheaper every day! ~ solar panels as it takes feeding into the fridge.freezer/whatever all day long ~ at the ‘coldest’ setting. And not at all at night. My experience is that even an ordinary fridge will almost ice up over the day (eg a 130 litre caravan-style fridge) and will keep everything cold enough. For the days when there’s just not enough insolation you use the alternatives (sparingly!) gas, a small generator, etc. And I’ve also learnt over the years that extra insulation and ventilation is hugely successful.
eg. I glue pine floorboords to all surfaces of the fridge ( tarted up to suit the general decor of the kitchen). Ventilation can be a HUGE efficiency if you use an old-fashioned fridge (and freezer) which have the cooling grid (there’s a word for it I can’t recall). You position the fridge a couple of inches out from the wall and drill holes in the floor which allow cold air from under the house to rise up over the grid as it heats. If you want to get REAL flash you’ll enclose the whole coolomng element and feed it into the ceiling ….the effect is the same as increasing the efficiency of a flue from a stove. Not only does heat rise, but properly funneled can increase the speed enormously.
As you say, much of the either/or argument is irrelevant.
ps contact me:- [email protected] if you feel inclined.
ps, ps… another trick we used in the day was to carry a few spare batteries in the ute/car. We ‘dropouts’ generally lived a fair way from civilisation, and had to drive EVERYWHERE. One woman I knew drove her kids to the school bus ~ 10km each way ~ and charged up the batteries in her ute from the car alternator. Then just plugged them in to the house circuit when she got home.