Are you installing solar batteries?

Tuesday 23rd January, 2018

When talking about solar energy or efficient houses I often get asked whether I am installing batteries. At this stage, though my house and solar system are battery ready, I’m not installing batteries as they are of neither cost or environmental benefit to me.  This doesn’t however mean they don’t suit others and I wanted to explain when they are beneficial.

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Solar batteries are used to store the free excess solar energy you generate to reuse it at a time when your solar panels aren’t generating, usually at night. There are a number of different brands and options available. Let’s consider a typical case with the batteries costing $10,000 for 10kWh with a 10 year warranted life.

So why aren’t I installing batteries?

Firstly, from a financial perspective. My house typically generates about 20kWh/day and my energy use is about 4kWh, half of which is used during the day and other half at night. Though my solar offsets my daytime energy use for free, I buy the night-time electricity for about 30c/kWh.  My excess solar I sell for about 12c/kWh.  The result after all costs is that my energy retailer pays me about $50 per quarter.  The battery would work by storing 2kWh of my free solar electricity during the day for me to use at night.  Therefore I wouldn’t be buying the expensive electricity and instead using my solar.  The difference between what I could have sold it for (12c/kWh) compared to what I buy it for (30c/kWh) is 18c/kWh.  By saving 2kWh, or 36c/day using my battery, I’d save myself $131per year or $1,314 over the warranted 10 year life of the battery, which doesn’t even come close to paying for the initial $10,000 cost.

Next is the environmental perspective. Batteries don’t generate electricity themselves so don’t offset any carbon emissions. They do have a benefit of enabling the electricity grid to have a greater installed capacity of renewable energy, but that’s not yet a limitation in Australia.  Batteries have a relatively high embodied energy and are not able to offset this by generating energy. However, solar  panels repay their embodied energy in 1.5 years (http://reneweconomy.com.au/dispelling-myth-of-energy-payback-of-renewable-energy-systems-75607/).  Therefore, with $10,000 to spend it’d be far more environmentally beneficial to spend it on 10kW of solar panels.

Even by using 10kWh at night and fully utilizing the battery, the batteries still don’t pay for themselves at the current electrical tariff rates. I’ve heard about and researched some companies that will pay you a lot more for stored electricity at certain times of the day which could make more than an 18c benefit of stored electricity, but there is a hidden catch… though you can offset your electricity bill to zero, if you make money, they will never pay you out, just give credit towards futures bills.  So whereby now I’ll get physically paid $50 per quarter, with these special retailers I’ll never get cash and only credit to offset a future cost that I’m unlikely have.  If I were a larger energy user with consistent bills, then the offsetting capacity of these retailers would appear to favour batteries, though at that point, the money if spent on additional solar panels would still outweigh the benefits of the batteries.

“I have no doubt that there are particular situations where solar batteries would be of significant benefit. Some examples that come to mind include not being near an electrical grid connection, if your power was unreliable with blackouts, if you have maxed out available roof space or use significant energy at night.”

There are some fantastically successful examples of large commercial ventures, including Tesla’s South Australian energy storage system (http://theconversation.com/a-month-in-teslas-sa-battery-is-surpassing-expectations-89770) as well as various pumped hydro and large scale storage systems (https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity).  At these large scales, the systems can buy and sell directly into the National Energy Market and take advantage of favourable price fluctuations resulting from varying energy demand and supply.  But the average family is locked into statically priced contracts that are otherwise counter-productive to both energy storage and generation.

For the vast majority of people, home batteries aren’t quite there. Watch this space though as with solar becoming cheaper and with the demand from electric vehicles, the cost of energy storage is decreasing dramatically and will reach a point where it becomes a financial no-brainer. This is why I’ve designed my home to be solar battery ready, but in the meantime, energy storage is best left to the big commercial ventures.

Written by Michael Whitehouse (Facebook, Twitter, Linkedin)
Edited by Jenny Boge.

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