A typical 100-watt solar panel retails today for about $50, one-tenth of the $500 it cost in 2000, when hardly anyone could afford the technology. Solar power was then very expensive, and people needed incentives to add solar power to the grid with panels on rooftops or open land.
The solar revolution started with a small policy intervention in Germany – feed-in tariffs.
In 2000, the country’s total installed solar power generation capacity was about 40 megawatts (MW); 16 years later, it had reached over 41,000 MW by end of 2016. Today, some weeks of the year Germany can generate more than half of its power from solar.
When Germany started solar energy feed-in tariffs back in 1991, the rewards were very high to woo early adopters to invest in the new technology.
The principle was then further supported by the 2000 Renewable Energy Sources Act, which allowed any homeowner, business owners, farmer, or private investor to “sell” their electricity back to the grid at 3-4 times the current price for 15-20 years.
In most cases this represented a premium close to 65 cents per kilowatt/hour (kWh) at a time when the price of electricity was about 21 cents per kWh).
Solar revolution started in Germany with feed-in tariffs Feed-in tariffs brought about a revolution in the solar power industry. Germany was the pioneer, and the People’s Republic of China, Spain, and the UK followed years later. In 2018, almost every country has some form of feed-in tariff for solar.
Led by Germany, the world went solar, and the rest is history. People started using the grid as a battery: selling the daytime excess power from solar panels to the grid for others to use, and using the power from the grid in the evening when there is no sun.
This had two impacts. First, there was a large drop in the daytime demand as more and more customers relied on their own solar power. Second, the increase in the evening peak continued as all customers used power from the grid at that time. This caused the demand profile resemble the infamous “
duck curve”.
Utilities around the world will soon suffer because when a significant part of a grid’s transmission and distribution system remains idle during the daylight hours and is only being fully utilized at night, the cost of the capital investment is only partially recovered.
Many argue that the owners of rooftop solar generators are using the grid as a battery for free, while customers with no solar (likely to be lower income households) are subsidizing them.
Australia’s push for self-storage creating new market for batteries So, let’s get rid of the duck. In Australia, regulators are giving a very clear signal to the market: the grid is not your battery, so please get your own.
Australia’s push for solar self-storage is creating a new market for large-scale battery leasing or rent-to-own schemes. Installing a typical household battery costs around AU$3,500-5,000 ($2,577-3,681), of which up to AU$2000 is subsidized by the state government in South Australia.
The system is pretty simple. In New South Wales, the state regulator IPART
sets a range for all-day solar feed-in tariffs between 6.9 and 8.4 cents per kWh. Gone are the days of making 65 cents per kWh about a decade ago.
Now the feed-in tariff is no longer flat for the whole day, but rather depends on the time of the day.
From 6am to 3pm, when 86.2% of solar exports occur, the range is 6.5-7.9 cents per kWh. The rest of the day, the highest tariff (17.2 cents per kWh) can be reached from 5pm to 6pm, and the lowest is 7.4 cents from 3pm to 4pm.
Let’s leapfrog to time-of-use feed-in tariffs in small Asian economies Some consumers are complaining now that their sweet deal under the old pricing system has come to an end. These are mainly early solar adopters that have become used to getting practically free electricity from rooftop solar, and selling their excess for profit to the grid.
The majority of stakeholders seem to be happy with the new arrangement, especially the solar retailer and the battery businesses.
While the power companies are happy to see rooftop solar customers go on their own, their long-term worry is stranded assets – large part of the distribution grid and power stations may have no commercial use as more and more customers build their own household systems, especially in rural areas with dispersed population.
Technology is changing rapidly. In a few years, solar batteries in homes are going to be as common as refrigerators or television sets.
So, why wait? Let’s leapfrog to time-of-use feed-in tariffs in countries where feed-in tariffs have just started, especially in small economies in developing Asia.
Batteries are changing the electricity supply scene in world. Whether its electric vehicles, electric boats, drones, or rooftop solar, disruption is here to stay.
This article was originally published on the Asian Development Blog. Republished here with permission.
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I live in Sydney and can I just point out that AGL under its 'Solar Savers Plan' is paying 20cents FiT ( all day long ) which is way ahead of the other big gentailers - Origin and Energy Australia.
Yes Joe, but their daily SAC is fairly high.
Hello my Solarman. I was previously with Energy Australia ( EA ) before changing to AGL in August to take on the Solar Savers Plan. I did my research and found AGL's consumption tariffs including the Daily Supply Charge ( 105.60 cents per day DSC ) were better than what EA ( 107.8 cents per day DSC ) charged . Throw in AGL's 20c FiT ( guaranteed for 2 years ) vs EA's 12.5c FiT....the decision to change was made for me.
Wow they're sticking it to you, I pay EA 74.7cents/day SAC .However, I too would be better off with switching to AGL by $42/q, I would have to see the T&C's of that offer, like could they change it for any reason within the 2yr period and what will they offer after the contracted period is an unknown. It could turn out to be quite low?
I'm happy to stay the 2 years 20cents guaranteed FiT. After the 2 years I'll shop around if the 20cents FiT is reduced.
You didn't mention (or maybe didn't know) that Energy Australia isn't actually Australian, it's owned by Singaporeans. So your switch also has even more benefits...
Hong Kong actually, parent company is CLP.
I stand (partially) corrected... and bow to your greater knowledge ;-)
Yes, it is, and in regional areas 50% higher, but that is paid only once each day, while the FIT is paid in every kWh exported. 8 kWh pays the SAC, and then there is still a balance of around 20 kWh/ day to cover the power bought in and provide a healthy credit.
On Oct 10 I will have 12 months of solar. The average daily output is more than 5 times the rated power of the system and covers my usage with heaps to spare. Best investment ever, and the AGL Solar Savers deal makes it even better.
I am due for an account on Friday,, Oct 6 and will be able to give a balance sheet for near as dammit to the full year then.
I'm perplexed as to why you feel the need to tell me all that, when I know how good your playing the game and you know that I'm also a player and winning like you?
Yes, I know you know, but there are other readers here, new ones all the time, who may well not be aware of just how good the investment is.
Oh I see, forgive me I turned 59 yesterday and it's a well known fact that old farts start to loose their psychic ability.
Origin also have a 20c FiT available - I saw it on WattEver yesterday... 10 Oct 18
I agree Joe. Our household is actually much better off since July 1! The caveat with AGL Solar Savers is that a household must export at least 70% more than it imports to break even. That's very easy for us because we export six times more than we import!
I recommend PV owners check out the electricity retailer comparison website, WATTever: https://wattever.com.au/ and input your electricity data for 12 months to find the best deal for them. Please be mindful that some of the cheapest prices are offered by some of the least environmentally friendly retailers as judged by Greenpeace's Green Electricity Guide: https://www.greenelectricityguide.org.au/
My local council has organised a solar and battery scheme. While I may well add another 5kW to my 2006 1kW solar installation I can't see that a battery is financially viable. I buy power at about 37c/kWh and can sell it to AGL, any time, at 20c/kWh. The difference is not worth the capital cost of the battery as I see it.
Think about how much grid power you use at night and imagine it gone, what will you save. Then look at how much feed in you can profit from, that will give you an idea if a battery can pay for itself in 7yrs.
Can you give a calculated example?
Yes I could but I won't. You can do it yourself, call a Solar business and get quotes and do the calcs.
I have done the calcs. And I have not yet seen a battery that pays for itself within 7 years.
It makes much more financial sense to put your money first into maximising the solar system.
As long as your methodology is correct and you have taken everything into account, then for you if it doesn't add up, then of course you would increase the size of your PV. Not uncommon, just keep in mind for some it makes sense to get a battery and those people send a lot of excess generation back to the grid, like myself and that helps the payback!
G'Day Solarguy.
IMO, batteries need to be a whole lot cheaper than what they are now to make them financially viable. However, if Tesla can get batteries for their cars from Panasonic for around US$100/kWh, imagine how low they 'could' sell a powerwall for if they were really keen...
With prices currently at nearly $1000/kWh they certainly are no bargain as yet. Even with the proposed upcoming $5k rebate from the Vic State Govt, they are still too expensive (IMO).
Hello Greg, When working out if a hybrid battery system is suitable, one must take into account how much that battery will offset grid power from dusk to dawn in the worst case to least case scenario. Peak power costs can be higher than 50cents/kwh. You need to also look at your daily SAC charge, if your PV can generate enough power to pay for the SAC, charge the battery and still power the loads then you're likely on a winner.
My 9.3kw PV generates at times 4 times the cost of SAC even after battery is charged and daily loads are taken care of, which means I'm always in credit, up to $700/p.a. plus my battery and PV generation offsets $2,400 p.a.
Tesla has just increased the cost of their battery by $2k, however LG and others haven't, umm.
That $5k rebate is deal maker, as it almost pays for a Sungrow 4.8kwh battery on it's own!
G'Day SolarGuy. I have done some back of envelope calcs at my worst case scenario which is currently 36c buy and 11.3c export. May be switching to AGL or Origin for a 20c FiT.
My average (non solar hours) is only 5kWh usage per day because I have trained my missus to only do washing etc in the middle of the day. In reality it is now ME that does it while she goes to work ;-) I only have 6.4kW on the roof (installed 7 Sept), but I have managed to generate 42kWh on my best day so far, but lately it has been much lower due to massive cloud cover (for weeks almost non stop).
According to my calcs, based on average 5 hours sunshine for Melb, my minimal use, $1 per day in service fees, I should be able to cover all power I buy from the grid ($2/day), plus pay the service fee ($1/day), and still make a small FiT credit. Changing to AGL (20c FiT) I calculate I'll be able to make a profit of about $3 to $4/day. Payback period should be less than 2 years (total cost was $3050 fully installed Sungrow 5kW inverter and 19 Trina 305w panels) allowing for the fact that I now have $0 to pay in power bills (previously $400/quarter).
IMO anyone (with the ability and roof space) has rocks in their head if they don't install solar. I live in a block of 8 units, and I'm the first to install solar...
This is exactly what I commented on above... 37c/20c compared to my 19c/11c
Which is better ? It depends on how big your array is, and how much you export.
The author is rather optimistic on battery cost.
I don't understand how AGL can pay 20c/kWh (=$200/MWh). Wholesale electricity generally sells for $40-$100/MWh; why pay far more?
I'd like to think that AGL is doing it for the 'love of solar'. I suspect there is a bit of customer churning going on amongst the retailers and perhaps AGL is dangling the 'bait' to sign up new customers just like I have recently done.
It looks like the old bait and switch con...
Check the price you would PAY for power, and it would no doubt be much higher than a plan with a lower FiT (even from AGL).
Better yet, use the FREE Wattever.com.au web site and see ALL the plans available to you...
(I use their web site monthly)