In Australia, the utility lobby says that the payback time to take a suburban home off grid is nearly 30 years. But soaring fixed network charges, and plunging battery storage costs, are rapidly changing the equation. In northern Queensland, the pay-back time may be as little as 7.5 years.
Steve Madson, the head of Country Solar, is feeling pretty pleased with himself.
Five days after installing a 10.8kWh Samsung lithium-ion battery storage system in his suburban Townsville home in north Queensland, and three days after (temporarily) flicking the switch from the grid, Madson is watching the rain fall – and the charge in his battery storage system is still going up.
“Last night was the first rains for the year in Townsville and it was very welcome, because many suburbs in town have power outages because of the rain,” Madson tells One Step Off the Grid. “I decided to make sure I drained my battery to see how much charge I could put in with a rainy, overcast day.
“I have 5KW of solar on my roof currently and I will lift that to 6.5KW in the coming weeks. Right now, my pool pump is running, two fridges and all standby equipment is on – and my battery is charging and has come from 6 per cent to 18 per cent in the pouring rain!!!”
That was Madson speaking at 10am. By the end of the day, despite the rain and the cloudy weather, the battery storage system had charged to 65 per cent. It would have been fully charged if he hadn’t left the pool pump on, but he was keen to test the system.
The result is good news for Madson, because in the next few weeks he intends to take his home permanently off the grid, and judging by the number of inquiries his business is receiving (about 50 a week), he expects many others to follow.
That’s because for an all in cost of around $25,000, consumers can get a 10.8kWh battery storage system and around 7kW of rooftop solar. In north Queensland, that’s enough to take a home off grid, and deliver a payback of 7.5 years. That’s one reason why Madson decided that he’d better lead by example.
“This unit is the first of its kind installed in the world, we have this unit currently still connected to the grid whilst we learn all the features and functions though we plan to be off grid completely at the start of December.”
And Madson does not anticipate problems with going off grid. His 6.5kW of rooftop solar PV will produce more than 24.5kWh per day in winter, more than his home usage of 18kWh a day. In summer, the system will produce an average of 38kWh per day, more than covering his increased usage of 30kwh per day.
“I have a swimming pool, an aquaponics vegetable garden, we are in a hot humid environment so the house is air-conditioned with inverter split system air cons,” Madsons says.
“Because of the grid service fees my initial back up power will be a backup LPG generator, although I will purchase an electric vehicle early in the New Year and that will remove the need for the backup generator.” Here is a screenshot of his solar power output, his battery storage status, and his load, from Wednesday.
“When home energy storage with lithium-ion battery technology started to become a reality I was getting really excited, both for myself having a new toy but also for the greater good of the community,” Madson says.
“For years I have been told the reason electricity prices are so high is because solar does not influence peak demand, that peak demand in sunny North Queensland where I live happens in the early evening these days and that is due to air-conditioning loads.
“I wondered if solar storage households like mine be connected to the grid and used as a filter to level grid demand. Wouldn’t the ability to help the grid by feeding from your home energy storage system or EV solve the greatest problem in the history of the centralised power network?”
Apparently not. The Ergon network they have increased the daily service charges and added metering charges which, when added up, amount to around $600 a year.
“That leads me to believe they will continue to increase fixed charges and lower the rate of electricity. But even if it remains at $600 a year over the expected 15 year life of my (storage) investment, that is $9,000 of fixed charges and $9,000 buys me a lot of extra redundancy to ensure I won’t need the grid.”
Madson says the $25,000 cost of such a bundle should deliver a payback of around 7.5 years, given the high network fees and electricity charges.
That is little more than half the cost ($42,000) and one quarter of the pay-back time (29 years) suggested by the Energy Supply Association of Australia earlier this year, when it sought to throw cold water on battery storage following the publicity surrounding the unveiling of the Tesla Powerwall.
“With our electricity prices, these battery storage systems are already delivering fantastic returns. The modelling (of the utilities) is all wrong,” Madson says. (Although it should be pointed out that homes in southern states, particularly Victoria, would need much more battery storage to get through their winters).
The response by the utilities industry, particularly the move to jack up fixed charges, has left Madson confused and regretting a missed opportunity.
“If we worked as a community connected to the grid, using home energy storage systems and EVs to smooth out demand and supply, everyone in Australia would benefit and networks and retails would be much more profitable.
“And it would mean the road to the state target of 50 per cent renewable energy would be accelerated. Instead, the opposite will happen as a wave of people leave the grid on the back of unfair fixed charges.”
Madson says it would be more efficient to stay connected to the grid and a peer to peer system allowing people to build what they deem enough, and retain the ability to buy and sell electricity with my neighbours when circumstances change ( like family come to stay and energy requirements increase for a week).
“If the electricity grids rolled this model out people could lease their roof tops to investors to trade electricity, they would make money, the grid would make money in transport fees and we would see 100% renewables in just a few years.”
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.
This post was published on November 11, 2015 10:50 am
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I am not the only one thinking about this. The excess costs here in NQ are killing residents budgets.
I already have 2.8Kw installed so the cost keeps going down. An off grid would run the home and the 2.8 Kw could make a dollar by feeding back everything it generates.
It's not more battery storage that households need in the southern states need in winter, it's more solar panels! And you can put the panels on any roof orientation, as the light is diffuse in winter. So you get nearly as much output in cloudy weather on a south facing roof as a north facing roof. Which is just as well as you need as many KWs of panels as KWHs you use in winter. So winter thermal efficiency and efficient lighting is paramount to reduce winter usage.
Victoria has much cheaper power courtesy of a higher density of population and their filthy brown coal generators, so battery prices still need to drop a lot to be economic. But it's coming, and a lot sooner than the utilities realise, or at least will admit.
Your dead right with more panels.I put a 1.5kw system on my roof, it ran everything and and left me with a small surplus. I did add more panels to 2.28Kw. I left my electric.hot water as is. My feeling was, adding enough panels to cover the cost of running it was way cheaper than fitting a overpriced solar hot water system.
“Because of the grid service fees my initial back up power will be a
backup LPG generator, although I will purchase an electric vehicle early
in the New Year and that will remove the need for the backup
generator.”
It sounds like Mr Madson wants to use the EV as a backup. At this stage there are no EV's capable of feeding back energy.
EV as a backup is done abroad with the Nissan Leaf + Leaf to Home system.
But for other EVs such as the Tesla MS it isn't possible till now.
There are. But Tesla has a policy of giving away electrons so they will not let you discharge your Model S battery to power your house.
Another reason why I hate "free" supercharging.
Good story Steve, but as Terry says more panels not more battery's, for everyone not just southern states.
There is a balance between the number of panels, KWh of storage, daily demand, weather impact and back-up generator capacity.
Living in coastal Sydney, with the panels at the near perfect N facing incline, provides a good balance between weather extremes (not excessively cold nor hot).
The house being double brick and tile, mostly built in 1920s provides a great benefit with double brick internal walls, external eaves etc making it a surprisingly energy efficient design (cross draft etc).
For a family of 5 with 3 teens - daily power demand avgs 8.25 kwh (no aircon but ceiling fans that do the job but for 3-4 days a year).
With just 2 KW panels installed, total Gen > total use over a rolling year since installed in 7/13. But many traps for the innocent/newbies.
Such as 1 KW panels 99.99% of time will not generate 1KW to the meter/house. only exception is brief time with remnants of a sun shower magnifying the sunlight,
Panel degradation sets in almost immediately. Some manufacturers over-supply (under-rate) panels so that this impact is not noticeable for a while (14 months in our case).
What is more interesting (to a pedant) is the following:
Total operating hours: 3,888 13/14; 3,846 14/15
Total Gen KWh: 3,126.1 13/14; 3,003.2 14/15
KWh produced per KW installed per operating hour: 0.80 13/14; 0.78 14/15
Now I recorded (daily) relative cloud cover, level of precipitation, max temp to see how they impacted. Subsequently however I used it to 'adjust' to see exactly how the per hour per KW installed generation was. For us there were more evil weather days (and more severe) during operating hours in 2013/14 than 14/15. Made about a 6% difference by my rudimentary calcs. So relative drop in production is more pronounced than the apparent 5% (0.80 to 0.78).
Long winded way of getting to the balance of Gen vs storage. Worst run was 6 days of negligible gen (totaled 11KWh) vs demand of 56.
Having more panels would not work in isolation (especially off-grid) as the surplus energy is lost. On a typical day we only consume 24% of our generation and that is with washing/ironing/cooking (weekends for the last two) shifted into gen time. WM heats the water itself - so maxing as much as possible. Interesting watching how much power is used to boil a kettle. Even more so when boiling just the right quantity required (try telling teenager that a cup of coffee does not require 1.5 litres to be boiled!).
Out of Gen time use would require battery (available) storage of 6 KWh roughly - so close to 10KWh given issue with not running battery down to below 30% or so.
But that only gives cover for one day and avg load. Major drain is night time cooking and non-gen time running of fridge/freezer. Lights etc (LED/CFC mostly) are next to nothing, heating not required more than a few days a year (double brick, insulation and day time passive solar capture works a treat).
To get a payoff between the costs of battery storage vs 'add more panels' vs add a back-up generator (in suburbs) is much more daunting.
To fully cover runs of 3 poor days would require (for our relatively miserly 5 person demand) around 25KWh capacity so effectively 37KWh battery.
More panels only benefit, for us, on bad days and go close to no way towards benefiting us (payoff perspective) for the other 300+ days a year. For the utility operators it would be a great deal at 6 cents per KWh put back in the grid and sold next door for 30 cents.
Hey journalists! 1. Hybrid systems are NOT new in Qld. My company Cleanswitch has been doing this for the last 2 years now with both Li Ion and lead acid storage. 2. This is a hybrid system (grid backup) - not off grid. Please get this right.
I think Madson makes it pretty clear he intends to go off-grid, with no grid back-up.
I'm interested to see a story with the gear your using, rationale and payback time.
Thanks for the article, a couple of points; the average annual solar resource in North Queensland is significant >21 Mj per square metre. In essence one only needs the proverbially piece of wet string to capture enough solar. Ergon knows what their solar systems embedded in the grid have been delivering and I suggest the figure is impressive. The fixed charges do make the economics of Stand-alone Power systems attractive and the author is correct in making the point of lack of partnership with Ergon customers is missing many mutual economic and system benefits.
This is the tipping point in history what happens now will determine the future. Does a business harness the passion and desires of its customers or spiral into a Kodak? The problem for Queenslander's is that we own the Ergon business, surely this gives us an opportunity to re-design the engineering and business models more easily into the 21st century low carbon model we need!
Ayup. This is what I predicted. It would make more *sense* for the grid operators to cooperate with solar-and-battery deployment... but they won't, so everyone will just go off-grid.