Since I wrote about Tesla’s announcement of the release of its battery storage system called the ‘Powerwall‘ back in our May 3rd Newsletter I’ve had countless people ask me what I think about battery storage for solar power systems and how soon we will be able to all go ‘off the grid’. Let me be clear from the outset, I think the future lies in being connected to the grid, not off the grid, and I will explain why.
Off Grid is not Cost Effective
If your house is already connected to mains electricity (or if you live close to the grid) it simply doesn’t make economic sense to go off the grid. At the Greeny Flat, our entire energy bill for our first year was $258. A single Powerwall is likely to cost $8,000 or more installed. So even one Powerwall were capable of taking us off grid, it would take about 31 years to recoup the cost. Meanwhile it will be warranted for 10 years…. so the numbers don’t even come close to stacking up for us. The payback time would be shorter for houses with bigger power bills but they would likely need two or three Powerwalls to meet their power requirements so it still isn’t cost effective.
The only scenario I can foresee in which battery storage will make financial sense is if we are all able to trade power at the spot price through a connection to the grid. There is a company in the ACT called Reposit Power which is in the early stages of rolling out a new kind of software that allows homeowners to trade electricity on the grid. As this Ecogeneration article puts it;
‘Reposit Power’s solution includes the ‘GridCredits’ technology, which automatically decides on behalf of households throughout the day whether to store energy in a battery or sell it back to the grid at a profit i.e. it buys energy when prices are low and sells energy when prices are high to make a profit for consumers.’
If you combine this software with a solar system and battery storage there is real potential for households to not only generate more energy than they use, but to also profit from their investment in solar power. I think this will be the way of the future but it requires homes to be connected to the grid in order to work.
Check out this Gizmag article about the Enphase Home Energy Solution which sounds like it’s already a number of steps beyond the Powerwall before the latter has even been released here.
‘Enphase is billed as the world’s first integrated system that allows home users to store, monitor and manage their rooftop-generated solar electricity, while controlling their overall electricity consumption.’
The Enphase system is scheduled to be released in Australia first under a pilot program to begin in December this year. The Gizmag article quotes a price of ‘AUD$1,150 per kilowatt hour for volume purchases by direct customers in the Australian market, with a margin to be applied by partners’. It will be very interesting to see how much it actually costs us homeowners once the ‘partners’ have applied their ‘margin’ but Enphase is just one of many companies that will be competing with Tesla for the battery storage market so I think we will see prices come down rapidly.
Off Grid is not Environmentally Responsible
If you have the ability to connect to the grid it makes much better environmental sense not to go off grid for a number of reasons.
Firstly, an off grid system needs to be oversized. Because an off grid system doesn’t have the ability to use the grid as a backup for times when energy use is high and energy production is low (e.g. consecutive days of cloudy weather), it has to be about three times larger than would be required to make the same house energy positive on a grid connected system. On a grid-tied system you can size the solar system to meet the home’s annual consumption and use grid power to compensate for the times of high load/low production. The smaller size of the grid-tied system makes it a much better environmental choice.
Secondly, grid-tied solar systems can help to compensate for regional fluctuations in renewable energy production. If every home has a solar system and is connected to the national electricity grid we have the ability to shift power from one region to another. So, if the Southern Highlands is cloudy, we can ‘borrow’ power from Dubbo where the sun is shining, and vice versa. This would help to make renewable energy a more effective solution for the entire country, thereby reducing our dependence on fossil-fuel-produced power.
Thirdly, grid-tied solar systems with battery storage and interactive connection to a ‘smart’ grid have the potential to help the whole country be powered by renewable energy. We are blessed with abundant sunshine, wind, wave, tidal, hydro and geothermal energy. As we learn how to better harvest those renewable energy sources, how to reduce our energy requirements, and how to better manage the way we trade and transmit power via the grid we can start to conceive of a future where we don’t need to keep burning fossil fuels.
We Need the Energy Companies to Co-operate
As I mentioned above, I think grid-tied solar systems with battery storage and interactive connection to a smart grid will be the way of the future. Unfortunately the big energy companies have not yet come to the party but they will. As soon as battery storage systems become an economically viable option we will start to see a significant number of people choosing to disconnect from the grid. When that happens we will see the energy providers do a backflip and actively embrace solar with storage.
Meanwhile there is delicious irony in this Energy Matters post which quotes Paul Adams, the managing director of Jemena (a Chinese/Singaporean company which owns $9 Billion worth of energy and water infrastructure in Australia) as saying that going off the grid is ‘greedy and selfish’.
‘The grid is of so much value here, why don’t you want to share your energy with your neighbours?… Why don’t you want to do something on a community and social basis, why are you so greedy and selfish?’
I happen to agree with him but the irony is, of course, that the main reason people want to disconnect from the grid is to free themselves from the greed and selfishness of companies like Jemena who keep jacking up their electricity bills and reducing their solar feed in tariffs.
I doubt that his argument will convince too many people to stay connected to the grid but I think we’ll see a big shift in the financial incentive towards being grid connected with battery storage in the near future.
And We Need Governments to Stop Subsidising Fossil Fuels and Start Pricing Carbon
The other thing that has the potential to dramatically shift the balance in favour of renewable energy is the price of fossil fuels and carbon. Right now we’re suffering from ridiculously low oil and coal prices because of global over-supply. This is therefore the perfect time for the world’s governments to stop subsidising fossil fuel production. According to this Energy Matters post;
‘The OECD Inventory of Support Measures for Fossil Fuels 2015 shows governments are spending almost double the amount supporting fossil fuels – USD $160-200bn annually – as is needed to meet the climate-finance objectives set by the international community…
“These policies are now obsolete – dangerous legacies of a bygone era when pollution was viewed as a tolerable side effect of economic growth.”
“We are totally schizophrenic,” said Secretary-General Gurria in other comments related to the report. “We are trying to reduce emissions and we subsidise the consumption of fossil fuels’ which causes global warming.”
In addition to environmental issues, fossil-fuel subsidies distort the costs and prices of various goods and services; perpetuating older technologies over cleaner alternatives such as renewable energy and the continuation of energy-intensive methods of production.
The OECD says current lower oil prices present a golden opportunity for governments to phase out support for the consumption and production of fossil fuels.’
Another golden opportunity for things to shift in the right direction is coming up at the United Nations Conference on Climate Change in Paris in December. There are strong indications that the US and China will push for a global agreement on reducing climate emissions and I have high hopes that we might see a global emissions trading scheme after the Paris talks.
If governments around the world stopped subsiding fossil fuels and started taxing carbon emissions we would see the price of fossil fuel energy increase dramatically compared to renewable energy and that would be the biggest incentive or all for more people to choose renewables. I just happen to think that the smart way to do that will be to stay connected to the grid and to use solar power with battery storage to get maximum efficiency out of our household, community and national energy systems.