Until recently, Australia’s incumbent utilities – both network and gentailers – would have comforted themselves with the thought that going off-grid in a big city would be too expensive to contemplate.
A report from the Grattan Institute in 2015 suggested that taking an average home off grid in the city would cost around $72,000. It simply didn’t believe that it was going to happen.
The continuing fall in the cost of rooftop solar, and the plunging cost of battery storage, has turned that assumption on its head.
SA Power Networks, which delivers electricity to 850,000 customers in South Australia says the cost of of solar and storage will fall to around 15c/kWh before long, less than half the cost of grid power. Little wonder the networks lobby is calling for radical change of policies and rules to stem the potential loss of one-third of their customers.
Roger Franklin, a resident of the Brisbane suburb of Wynnum is a typical case in point. He got so fed up with the soaring cost of gas and electricity – and their surging “network charges” – that he decided to cut links to both of them.
He dumped his contract with his gas supplier, which was costing him $2 a day just for a connection, and decided to instead install LPG for his hot water and cooking. He then cut off the electricity supply, after installing a 6.5kWh LG Chem battery storage system to go with his 4.2kW solar array.
Already, his bill as gone from a combined $600 a quarter for electricity and gas to just $20/quarter –the average cost of replacing his LPG bottles.
The battery storage and the controls that go with it were installed by Brisbane-based software company Redback Technologies.
CEO Phil Livingston isn’t actually a supporter of individual homes and businesses going “off-grid”, but admits it is inevitable in some cases.
He uses this example as an illustration of what could happen, and the implications of new technologies and their plunging costs.
“This is an extreme example, but it proves a point,” he says.
“Self consumption of solar- generated electricity is the number 1 motivation for many consumers …. And what this shows is that even with small battery, going off-grid is a possible scenario.”
Today, Livingston adds, Redback Smart Hybrid systems with similar PV array sizes and battery storage capacities as Franklin’s can be bought and installed for under $10,000.
Franklin’s system in Queensland, a state with some of the lowest electricity prices nationally is saving $2,400 a year as a result. “You do the math,” he says.
Looking as part of an overall energy system, Livingstone says Redback “doesn’t see much value “in such a scenario.
“But (we have to acknowledge that) this is a very real scenario,” Livingston says. “We are seeing a significant proportion of customers moving down this track … a double digit percentage.”
This fits in with forecasts from the likes of the CSIRO and network owners lobby, who suggest that more than two thirds of homes will connect with solar, and if they don’t get a good deal from utilities, around one third will quit the grid altogether.
To avoid this scenario, they suggest, Australia needs to start changing its energy market rules to allow the adoption of new technologies to accelerate, and adapt to this reshaping of the energy market.
Franklin’s household uses around 8kWh of electricity a day. Most of his appliances – such as his reverse cycle air conditioning – are scheduled to run during the day, and he has a smallish quote of around 3kWh for the evening.
The graph above shows a typical recent day. In cloudy weather, the battery storage system is fully charged by around about noon (that’s the red line at the top).
The solar array meets Franklin’s day-time needs and fills up the battery. After that, it becomes a “load follower” – providing enough power during the afternoon to power the house, while excess power is spilled.
When the sun goes down, the battery storage is discharged, powering the house.
On average, Franklin wakes up in the morning with around 45 per cent of his battery capacity still there, sometimes it falls to 30 per cent.
The lowest he can go – the depth of discharge – is 10 per cent, so maybe winter will provide some challenges; but while the days are shorter and the angle of the sun is lower, there are usually more clear days. Time will tell.
“We think he’ll make it. It might get down to 15-20 per cent .” There is no back-up generator, so if it does go below 10 per cent, Franklin will do without lights – something that he is prepared to do.
Giles Parkinson is founder and editor of One Step Off The Grid, and also edits and founded Renew Economy and The Driven. He has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.
