I’ve been a bit busy to monitor my usage regularly, of late. Feeling out of touch, I made a point of checking my solar generation after recent rainy weeks.
It seemed a little low. Usually I hit 5kW around the middle of the day, but was peaking out at 4.6kW. I was contacted by someone who lives nearby with a corresponding fall in numbers.
The only theory we have to go off is lower angle of the sun. Additionally, because there were two weeks of Autumn where we almost never saw direct sunlight, we didn’t see the slow decline over time.
Its like seeing someone’s kids only occasionally – can’t believe how much they’ve grown! Their parents see it every day.
Having not checked anything for a while, I headed over to the SolarEdge Monitoring Portal to compare their results to Reposit. Having a second source for comparison is very helpful to sort out any discrepancies.
Well, there certainly have been some changes! And all of them look like winners.
The first noticeable change was the new Monthly profile for Power and Energy.
There was a period where the “self-consumption” figure wasn’t being reported through some conflict with the Reposit interface. That’s back, which is great.
Added to this is the “From Battery” stat which is quite cool. It features both in the Consumption summary figure, and the bar graph. This is only recent, so I look forward to that percentage figure “from batteries” smoothing out with a larger data sample.
If you mouse-over any of those bar graphs it gives you the details, in kWh, for the days that have been completed. Again – very vool.
I also hadn’t given much thought to the year-on-year comparison before I had enough data. Now its very handy to answer questions I and my near-neighbour have about long-term performance.
For reference, the figures are in the table below for the three months with suitable data.
* As of April 24.
What I find really interesting is the March figure; despite having an extra 1.5kW of panels this March compared to 2016, the weather meant I didn’t generate quite as much.
Moving forward, I’m sure subsequent years and months will prove to be most interesting. I love me some data!
Live Baby Live!
They’ve also updated the Overview panel to have near-real-time feeds of consumption. I did a quick screen cap of this and stuck it on my YouTube Channel. I like.
All in all, a great round of SolarEdge Updates as we move toward the cooler months.
Finding time to sit and think has been a bit hard. At the same time, there is so much happening here in Australia with regards to renewable energy, its difficult to keep up!
So here’s a scatter gun approach to energy blogging:
Part 1 of this is a scam warning. A group listed “50% OFF!” specials for LG panels and LGChem batteries here recently. One example:
Now, nobody in their right mind should be writing 7.2kw’s as that’s just bad grammar.
Second issue is they’re using a lower case “w” to represent “Watt” for both panels and battery, which is wrong in every scientific manner.
Third issue is the battery is listed as “kw” instead of “kWh” – always remember that batteries are energy storage. This means they should always be listed with their kWh (kilowatt hour) figure to understand.
Beyond all that, the pricing is just cray-cray, and so is the manner of billing. A friend of mine contacted them and they sent him an invoice for the full $12,990. This is weird as most equipment sales would take a deposit (maybe as little as $1000), instead of the full amount to get started.
As it is, he cold-called LG Australia directly, who were aware of it, but couldn’t say much for legal reasons. He also dug a little deeper on the website with the original promotion to see what he could turn up.
Both leads turned him onto the fact that this wasn’t all that it seemed, so he backed right off. Good move.
Several people I’ve talked to in Canberra (our nation’s capital) are saying the phone is off the hook from government offices.
Suddenly people are realising that a smart, integrated grid is a thing we need. The people in power are starting to come around to the fact that coal is going to collapse, and that idiot behaviour about it needs to stop.
That is the Australian Federal Treasurer, waving a lump of coal around in our House of Representatives.
Of course, politicians are populists by nature these days, so it remains to be seen whether talk of batteries survives the Next Big Issue they invent.
New Hydro Stuff
And from the book of “Hey! I’m a Populist, too!” comes our own Prime Minister. He’s decided that expanding our big hydro power scheme in The Snowy Mountains* is an awesome idea, and is framing it as “nation-building”
* some of the place naming in Australia is not wildly original…
Powerwall v2 promises to really shift the landscape, offering twice the capacity of my unit, for roughly the same price. Other manufacturers are going to need to start offering more capacity or other desirable features to keep up.
Along with the big battery moves, 2017 looks like its going to be a very interesting year. Most predicted we wouldn’t hit this stage until 2020, but here we are!
Many jobs, with new types of infrastructure projects, will be required to make this happen. That means opportunities for people to jump on the train as its leaving the station.
Note: I’m always open to proposals in this regard.
Looking at my statistics, the last 28 days have seen generation below 21kWh / day, compared to a lifetime average of a little over 23kWh / day.
Consumption is also down, which is in part due to tapering off the pool pump now we’re in the cooler months.
Import is sitting around the average, though I haven’t needed the grid too much. The occasional Reposit Power off-peak import has bumped this number up a little, but I’m thankful for saving a few dollars.
Now that its been a year, with statistics, I’m satisfied that things will just tick along without my intervention. I don’t really have time to watch it 24/7 anyway!
I’ve started overriding my obsession with checking the system every 10 minutes.
As scientific bodies continue to explore and model the effects of climate change, the technologists, disruptors, and entrepreneurs are seeking ways to combat it. The use of renewable power in the form of wind and solar is one of the key areas.
However, a valid criticism of renewable energy is stability: if the sun doesn’t shine, and the wind doesn’t blow, solar and wind are in under-supply. If the sun DOES shine brightly and the wind picks up, the renewable energy grid produces oversupply.
This situation is prominent in the California “Duck Curve”. The belly of the duck is over-generation from solar, while the head of the duck is the consumption ramp for night-time domestic use.
As domestic and commercial solar uptake increases across the world, there is a genuine risk to existing grids. Trying to address this issue alongside a mix of traditional power generation is difficult. Large, traditional generators cannot uplift generation, or halt it, at short notice.
I believe the natural solution is widespread adoption of storage technology.
Domestic storage will mature rapidly over the next 5 years, as household battery options become cheaper, due to vertical integration of the production process. This will be particularly true in established Western housing markets, particularly those dwellings with rooftop solar options.
It also enables the concept of virtual power plants for retailers to access power stored in domestic appliances. In the future, consumers will engage in peer-to-peer trading via blockchain and other smart technologies. The net result is to lower the need for a traditional “grid” and the associated maintenance for poles and wires.
Industrial storage will see positive disruption to hi-tech engineering solutions, using renewable generation. Efficiency has a large role to play here, as innovation across multiple sectors leads to better production engineering.
The volatility of frequency required for running many heavy industries can be offset with larger scale storage. These battery systems act like a buffer, or regulator, in order to provide assurance of stability. Large storage can also be deployed by energy networks in order to back up local power infrastructure.
Transport storage is a key area for addressing carbon emissions. While cars are the major playground for this technology right now, the move to heavy transport, agriculture, and public transport offers a range of other benefits.
I call it “Transport storage” because it offers more than just a way to move people or goods from one place to another. There is the opportunity to place domestic, industrial, and transport storage in synch, to produce a more efficient outcome for renewable energy.
Consider the California Duck Curve I mentioned before. This is the result of “too much of a good thing” when we have an over-abundance of solar PV! What if there was a way to mitigate this?
The average shopping mall in most countries has a roof space in the hundreds of square metres. They also contain hundreds, if not thousands, of car spaces.
If we add solar panels on that roof space, and storage in the basement, we can effectively create a curve smoothing apparatus by plugging in a suitable number of EVs during daylight hours. A similar system could be used by places of work for the benefit of employees.
Such a system would draw not only from the local (mall rooftop) power, but also spill excess renewable energy into recharging the transport network in other places. This might take the form of powering connected public transport – like electric buses or trains – on site, or via the grid.
All the while, this large-scale storage and renewable generation helps flatten the belly of the duck during the day. When people return to their homes at night, they can cut the head off the duck using their domestic storage.
Storage, along with the associated smart management technologies, provides the cornerstone for a renewable energy future. The combination of increased efficiency, and reduction of fossil fuel burning, is undeniable.
It is the first bill I’ve received with TOU (Time Of Use) tariffs, which changes the landscape a bit for me.
I already have data from Reposit Power about billing estimates on a daily basis. While they’re pretty sharp, the guys doing the billing are where it counts. I wanted to see how close all the estimates – including my own – would be to the truth.
The net result is a deposit into my bank account (yesterday) of $50.25.
The fixed costs were as follows, excluding GST, for the 84-day period.
Service connection fee
Usage over the period at the various TOU rates came to the following (all amounts are excluding GST).
Peak – Rate 1*
Peak – Balance
* This covers the first 340kWh / month
I imported only 176.181kWh over an 84-day period. That works out to just under 2.1kWh per day during that time. Only 0.3kWh in peak tariff period!
There were a couple of rainy days in a row that I recall. One of those coincided with hosting a family event, using the oven, and dishwasher a couple of times. As it was the weekend, shoulder rate tariff applied.
Factors in my favour are summarised in the table below.
Net feed-in tariff
Direct Debit Discount
Pay on Time Discount*
* This amount is calculated against the previous bill
The export figure is massive at nearly 13.1 kWh per day! Its worth noting that the new panels I got in October covered about 25 of the 84 days in this billing cycle.
The first lot of GridCredits were applied to this bill, and that $5.04 is handy for knocking the top off that peak tariff.
Once you throw everything into a pile, and calculate GST, you get the balance of -$50.25. Diamond will credit your account for any amount of $50 or more owed. For the first time ever I have positive billing for electricity in my favour!
About those referrals…
Yes, Diamond have a pretty generous referral scheme. Both the existing customer and new customer get a $35 credit which is pretty sweet. Long may it continue!
Having just one of those per quarter could help the electricity bill head drastically toward zero. The question is, how many friends and family can you tap into on a regular basis? 🙂
Let’s remove that $70 amount from the equation to look at the regular money.
Just The Facts, Ma’am
We now have an electricity bill of $19.75, or 23.5 cents per day, which is even lower than my first full bill in July.
When you export enough energy to cover your service connection fee, you’re doing pretty well.
When you self-consume most of the rest, and only bring in a very small amount of peak power, that is obviously much better.
That said, summer reality is starting to hit. As I write this, the outside temperature is creeping up toward 37oC (99oF). The air conditioner is running. Cloud cover is building as we head into the afternoon, and peak power tariff kicks in.
I’m taking this opportunity to experiment with the ducted air conditioner. I need to determine how to minimise cost without unduly affecting comfort levels.
Billing cycles will now fall roughly into quarters ending in October, January, May, and August. I need to think about maximising the two “good” periods, and mitigating the damage during peak summer and winter.
Of course, climate change might make the summer period even worse. That is something scientists already say is being felt, and will only increase.
Positive Billing Into The Future
How will things look this summer? There will be more sunshine than in winter, but more electricity consumption as well.
The data I have for the year ending January 2016 (when the system was installed) suggests summer usage is a couple of percent higher than winter.
Will this be offset by any exports I do? How does the temperature affect this calculation in terms of air conditioner use? Pool pump running? More events in warmer weather?
These are questions I can’t yet answer.
For now, I have 258 days of finalised bills, with a net electricity cost of $113.28 with referrals. That’s 43.9 cents per day for electricity, so I’m pretty stoked.
Even without the referrals, the figure is 71 cents per day, which is lower than my connection fee, and works out to $260 a year for electricity.
Even extrapolating the summer quarter as $1.30 per day (higher than winter), it works out to around $310 per year.
That still puts me in the box seat for a payback under 10 years, so its all systems go for now.
Relentless Self-Promotion Bit
Hey did you catch my recent video? I did a bit of off-road driving a couple of weekends ago. I’d love some more subscribers to my YouTube channel, so I can make more videos of things relating to solar panels and my own interests.
Charge my battery when it is cheap, to use when it is not.
“Hang on – you have solar panels! Why do you need the arbithingees?”
I’m glad you asked, random internet person.
Tariff Arbitrage In Practice
Tariff arbitrage needs a set of circumstances to be useful.
Firstly, a battery to store the power. Solar is awesome, but it has issues with needing the sun. That generally means daytime, and not raining.
Secondly, you need the right electricity plan. When I was on single-rate electricity, I’d pay about 23c / kWh around the clock. Now I’m on TOU (Time Of Use), I pay off-peak of around 13c / kWh, and peak of around 33c / kWh.
Third, you need something smart to control all this, like Reposit Power. My Reposit box governs power flows between Solar PV, battery, and grid.
It has a learning engine for my household habits, so it knows when I’ll use power. Additionally, it can look at weather forecasts to see when I’ll have solar energy available.
These are two important things to know, because when I’ll use power and when the sun is shining are going to make a difference for my power bill. Particularly as I pay different rates for power when I use it.
A Graphic Example
Here is a screenshot of the (new) Reposit interface for my battery from this morning. I’ve edited the image to have two labels on it to show the power consumption.
Fairly typical for the household while we’re asleep. The Powerwall slowly draining as it feeds the fridge, any standby devices, and bathroom light for the kids. Only thing that changes is how much is in the battery to start with.
Here is the same screen but with data from the day before.
Yowzah! It is going UP! And there is a reason for that: tariff arbitrage.
Yesterday, the forecast for Sydney was rain and heavily overcast conditions.
The Reposit software decided, based on the weather and my needs, that it should top up the battery to get me through the day. It uses the off-peak period to do that, and had actually commenced importing at 10PM the previous night.
This is the first time I’ve seen it top the battery right up. As you can see from the rest of the graph, I didn’t get through all this power in peak time. But I was buying it at a much lower cost than I’d otherwise pay.
Reposit Power aims to lower my costs. This decision to top up the battery is primarily for the peak period of 1-8PM where costs are at a premium. Once you take transmission loss into account (92% round trip efficiency on the Powerwall) I’m still ahead against Peak power cost by a ratio of 2:1.
Everything in between will mostly be taken care of by the trickle of Solar PV I generated during the day, as evidenced by the chart below.
This figure of 10.8kWh for the day is a long way from the 40kWh I’ve registered twice so far in October. But every bit counts.
Smoothing the Curve
Thinking about the solar figure jumping around a little, it also brings to light the other aspect of battery usage: curve smoothing.
When we have days with scudding* cloud and intermittent sunshine, a solar PV house with no battery is forced to call on the grid multiple times.
* Totally a word. Look it up.
Once the battery gets some juice in it, I’m less reliant on the grid for a sudden change in conditions.
Combine this with the automation of Reposit Power – where I don’t need to think about when the sun is out or not – and I’m onto a winner!
They looked at the system, and advised placing an extra six panels on the western roof. The same Phono Solar 250W panels would be used, each with a SolarEdge P300 power optimiser.
The two existing arrays tie back to the inverter with one string each. The new array would be joined onto the array to the left of picture (western). This made for the simplest install as it didn’t require new wiring to the inverter.
It also provided the benefit of generating from the sun in the afternoon. This is useful in the warmer months where I am more likely to use air conditioning.
Additionally, for those days that have overcast mornings, but sunny afternoons, I’d see the most benefit. Particularly true given the house has a rising ridge line to the east, so doesn’t see much sun early in the day.
With the detail sorted out, we agreed on a date for Splice Electrical to perform the upgrade. James and Nick turned up, and with their usual friendly professionalism, got to it.
While they were here I also got them to disconnect some old PSTN infrastructure that was slowing my NBN connection. Increased speed by 40%! Legends…
A few hours later I was the proud owner of another 1.5kW of panels!
Naturally, with an upgrade of this sort, you’re going to expect some improved results. The system has had a size increase of 30% (1.5 / 5.0 = 0.3). Would I get similar generation increases?
The main factor in all this is still the inverter. The SE5000 in my system is limited to 5kW in any direction. Therefore, expected generation, even with 6.5kW of panels, is limited to 5kW maximum.
I was quietly confident I’d hit this high mark regularly, given I generated 4.9kW or more at points during February and March, and even in May!
However, the panels aren’t in the same orientation as the rest of the system, so what is the effect?
Setting the baseline
According to one source, a solar PV system in Sydney should produce 3.9kWh per kW of installed panels per day. That is under lab conditions.
My initial system setup should (on average) have produced about 19.5kWh of electricity per day. For the lifetime of the system at 5kW, the SolarEdge API reports the following figure:
I hasten to point out that the data is a little murky. The SolarEdge API consolidates “generation” from PV and battery, because of the way it monitors flow.
Therefore, that figure only works if we’re assuming the battery is filled and drained every day. This certainly isn’t the case 100% of the time, but its enough to show we’re in the ballpark.
Another part of this is loss due to inefficiency. The Powerwall is about 92% efficient, meaning I have to spend around 1.5kWh of the 19.5kWh figure on the power going into and out of the battery.
The other factor is the timeline; we’re looking at a period from mid-February to early October. This includes the shorter daylight hours.
With all these factors considered, I’d say this is actually looking like a decent marker, even with the accepted error margin (+/- 10%) in the SolarEdge API.
Effect Of Upgrade
An extra 1.5kW of panels should result in a generation figure of 25.35kWh per day, on average, for Sydney.
The first caveat for this figure: it has been spankingly good weather in Sydney for the last week.
The new panels are also a different orientation to the others, which may affect the figure.
It is also a very small sample in terms of days. In the interests of science, I’ll leave this chart here to update daily. You can check in on it any time you like. A rolling 7- and 28-day chart is also on the Statistics page.
Average just shy of 33kWh at time of print. Pretty good weather!
A better analysis might be to look at the curves being produced by the different panel setups. The figures aren’t as important as the shape of the curve.
A small point: that is my record day so far. And its only October. Tee hee!
More importantly, we see the extension of the curve from the new peak around 1PM (daylight savings, remember), through until the late afternoon. We get a lot closer to sunset for generation as well.
The peak 5kW on this particular day hit at 1128 hours, and it stayed there until 1514 hours. The 5kW system infrequently reached 4.9kW, and then only for short stretches.
With the extra panels, not only is the generation figure much higher, but the long afternoon sun really kicks in.
As we move further into the warmer months, I expect the 5kW peak to be longer. Most likely, this will result in much more export until the point the ducted air conditioner is required on a regular basis.
I need to develop a strategy to mitigate that. Perhaps running the air conditioner in “continuous” mode on sunny days will help. This aims to keep the house cool, and the thermostat will lower the overall energy requirement.
I’m still finalising the change in payback time on the new array. Due to the move to TOU pricing, it is getting hard to keep all the facts and figures in order.
For the most part, I’m going to keep rolling calculations based on the single-rate plan offered by Diamond Energy. The rest of it makes my head hurt.
I’ll keep this pretty short, because the South Australian Storms are consuming a lot of media attention at the moment. This article is a bit of a linkstorm, because people have said most of this more eloquently than I could.
You can pretty much sum up the situation with this tweet:
The state of South Australia here has been hit by what is being described as a 50 year storm. The damage you see in the picture above has contributed to the entire state losing power.
As this article explains, tornadoes brought down critical infrastructure, and the network was brought down as a safety measure. Note that tornadoes aren’t a very common occurrence in Australia.
South Australia is connected to the state of Victoria for power sharing, as part of the South East grid. If the interconnector stayed up, and started demanding power from Victoria, it had knock-on implications for the whole grid.
Despite the magnitude of the disaster, there are some silver linings to the South Australian storms.
Reposit Power also had a customer request for power, in preparation for the storm. Why not use the grid import facility of Reposit to grab power before the storm hits? That way, even threats to infrastructure won’t hurt the average household.
While most people can see themselves getting a battery in blackout hotspots, most would never have considered the magnitude of such an event.
Though, in fairness, I suppose most people haven’t seen a storm this big.
Of course, it didn’t take some peanuts long to have a crack at the high percentage of renewable energy in South Australia. The state closed its last coal-fired power station a few weeks ago. It has been a nonstop bunfight since.
It really boils my piss to see this kind of thing go down. You’d think no-one in recorded history had ever had a blackout before. Or that, in some wild universe, humanity has never seen a storm of this scale until solar panels were invented.
Correlation does not imply causation. Maybe some of these idiots should learn something about that.
We’ve got a state suffering the effects of one of the biggest storms in living memory, and people are playing politics, as South Australian Premier Jay Weatherill states so well.
SA Premier Jay Weatherill accuses federal politicians of playing politics with the SA blackout. https://t.co/hpzK5CQ26V
I’ve had the Powerwall six months now, or in fact a little longer. It would be more accurate to say I’ve had a functioning solar PV with battery system for seven months.
That dates back to when my meter was changed over to a basic bi-directional unit. Importantly, it is the date that billing with Diamond Energy started, with full and accurate detail of import and export.
I have had a total of three bills, the most recent of which covers 52 days from mid-June to early August. It stops there because I’ve moved from single-rate to TOU tariffs, so Diamond decided to make things easier for calculation purposes.
The other two were covered by my blog post back in July. The full quarterly bill naturally received more attention than the one I hinted at in that post. With 174 days of billing data now in the bank, its time to look at a longer period.
This post will put up the basically points of interest from the three bills and their relevant statistics.
Powerwall Six Months Analysis – Part 1
The first bill covered the period of 17th February through to 23rd March.
Average / day
* This amount removes the $20 establishment fee with Diamond ($22 inc GST)
With a connection fee of just over $0.82 / day, and an export tariff of 8 cents/kWh, I was almost covering the connection.
Of course, import was going to hit a bit harder in summer time. The last week of February was a record-setter in Sydney.
The temperature was minimum 26oC / 79oF for nearly the whole week. Frequently the temperature was over 35oC (95oF) in the late afternoon, hitting those big, west-facing windows. I can only sweat so much!
That kind of heat requires air conditioning, which you can see in the red spikes below.
It probably wasn’t even the amount I imported, more a case of when it was imported.
This is a small precursor to what you can expect from an Australian summer in this part of Sydney region. No ocean breezes this far inland.
During this period I clocked some fairly hefty production figures, topping out at around 34kWh, with several days in excess of 30.
The heat of a Sydney summer makes me a little cautious in regard to power usage. In addition to the extended hours for the pool, the heat will require air conditioning. That means import.
January tends to be the wettest month in Sydney, and storm season. Luckily, for those cloudy days and weeks I’ve got Reposit Power to do the thinking for me.
POWERWALL SIX MONTHS ANALYSIS – PART 2
The start date was 24th March, running through until 17th of June, 2016. This was the big quarterly bill which grabbed the media attention here in Australia, with a few overseas articles published as well.
As you can see, the daily figures show slight decreases across the board.
At my import tariff, this equates to 13.2 cents / day decrease in costs as I’m importing less.
The export is 4.8 cents / day cost increase as I’m exporting less.
This comes out to 8.4 cents per day. The actual decrease of 9 cents per day is due in part to rounding.
Additionally, Diamond single-rate tariffs step up by a small amount once you use more than a certain number of kWh per month.
The weather during this period was pretty good. We had long weeks of sunshine, with few rainy days. The temperatures were very mild, meaning we didn’t need air conditioning or heating.
POWERWALL SIX MONTHS ANALYSIS – PART 3
The latest bill runs from 18th June through to 9th August, or a total of 52 days over winter.
In terms of “winter”, I should mention it never snows here. The closest snow I think fell about an hour’s drive away, in the Blue Mountains. It isn’t frosbite territory, and with the climate warming, isn’t ever likely to be. Short of another ice age, I guess.
We do get frosts, sometimes on consecutive days, and the lack of double-glazing, with basic wall and ceiling insulation batts, does mean the house gets cold. We also have a lot of tiled floor.
This bill gives a valuable insight into the changes that occur, in a period with less sun and more heating.
Average / day
A little over double for daily cost, and the reasons why are fairly obvious.
Import rose by 91%, and export fell by nearly 27%. So it cost me an extra 50 cents per day for import and I missed out on around 18 cents for export. In the ballpark at 68 cents.
There were only a couple of days where we ran the heating longer than an hour or so. With the big motor on this ducted system, that was more than enough to start hitting the import hard.
Next winter, with TOU now in place, we’ll be a bit smarter. I’m talking to Reposit about the best ways to utilise off-peak power, and how their software handles it.
Note: the reason behind the short interval for this bill is replacement of my meter. The GridCredits scheme is reliant on a sophisticated unit, which I’ll put up video of when I get the time.
Putting all the information into a table gives a nice summary of the solar with Powerwall six months down the track.
Not bad, though of course I have yet to experience a full summer with this system.
Summer will mean more power imports as we use the air conditioning. It also means longer daylight hours. Greater export will offset higher import, to a degree.
Compared to winter, where heating and shorter daylight hours have clearly had an effect, summer should be slightly better. I’m still at the mercy of those 40oC+ days, but at least I can pay them back a bit.
Of course, as panel temperatures rise above 25oC, efficiency will drop. More light = more heat in summer, so I might not see many days above 35kWh with the existing system.
Autumn and Spring are looking like the “Kill Bill” (*snigger*) periods for the year. The milder weather and lower heating/cooling requirements are really where its at.
Winter is going to be an issue ongoing, with lower daylight hours, and heating requirements. Summer will still need a lot of electricity imported, but can be offset with big exports.
The real challenge, moving forward, is to maximise self-consumption, and minimise waste. As always.
If I can keep the costs below $1 / day for my electricity, even with recent increases in tariffs, then I’m well on track to save $1900 in the first year. Maybe more after that!
For those playing at home, “opportunity cost” is an economic term, defined as follows:
…the loss of other alternatives when one alternative is chosen.
In particular, looking at my statement about leaving the money in the mortgage offset account, versus buying the system.
I had confidently stated my preference for the financial outcomes of the system early on. As it was likely to save me (at least) double the value of my offset in terms of electricity savings, it looked like an easy choice.
Honestly, opportunity cost was not something I gave much thought to. I decided to invest the money in acquiring a hybrid solar system. I wanted to save on electricity bills, and the money looked well-spent.
What some may not know is Lindsay and I had a fairly long email discussion about the direction of the article. We checked facts and figures,and compared notes in terms of thought process.
The ultimate conclusion is the one that most basic analyses have come to; the Powerwall is not yet considered financially sound in terms of payback, against its warranted 10 years.
Estimates for payback vary widely on how you analyse it, and individual circumstances. I had calculated mine at around 8-10 years, and that looked good after the first bill produced savings of ~ $450 compared to same quarter last year (or about $1800 per annum).
A small diversion
One question I’ve been asked via various forums is “how much did the Powerwall contribute to those savings?”
Well, I could go full sarcasmo and say “100% because If I didn’t like Powerwall I never would have bought the system!” Obviously, that is no help to the realists 😉
Without digging into the nitty-gritty, I’ve looked at the figures and come out in this ballpark:
50-55% Solar PV array in combination with time shift of usage
25-30% Powerwall ability to store and deliver power in evenings
5-10% change of retailer – I didn’t really import much.
Make of that what you will. No doubt for winter, that will change a little as heating becomes a priority.
Moving forward, there will be other factors like my move to Time Of Use power and power arbitrage. Also there are battery-related initiatives like GridCredits that will help keep costs low.
I got to thinking about my financials, since Lindsay’s article. During a subsequent proof read for another article I’ve written (to be published in the near future), I decided to go back and review “opportunity cost” as a thing.
I wondered if I’d made the right decision.
The article on gizmodo was right: while I was going to save on electricity bills, that money would no longer be helping slaughter my loan. By sticking it to the power company, I’d lost the chance to stick it to the bank!
What a conundrum…
I should mention that in the weeks before the install, I’d moved my mortgage to a product without an offset. I still could have dumped the lump sum it the mortgage directly, and let it ride.
But would I? Really?
Even in Aussie dollars, $16k is non-trivial amount of money to the average family. Maybe it was time to have a family holiday? Pay off some other debts? Do some enhancements around the house? Buy a GoT-themed jumping castle? Wait. What?
The point is, while its all well and good to say “stick it in the offset”, there are no guarantees that it would stay there. The problem with ready cash is that there are always things for which it could otherwise be used. Life happens.
Doing The Numbers…
For the sake of this discussion, let’s say the money went into the mortgage, for the Powerwall’s warranty period of 10 years.
Assume the interest rate stays at 4% (unlikely), and we keep any benefits in the mortgage. Under the principal investment of $15,990 the interest saved is $639.60 over the first year. Second year is principal $16,629.60 (adding the savings), which saves $665.18 and so on.
Now, based on rolling the principal + interest over every year, after 10 years we arrive at … carry the three … square the hypotenuse … divide by the tangential inverse of pi …
A total interest saved figure of $7,679.11 from my investment of $15,990.
I’ve continued to pay electricity bills during that time, of course.
Starting with my base usage costs of $1920 from the 12 months leading up to Powerwall, let’s be extremely generous to the retailers, and flag an upward move of 0.5% per year, on average.
That means in the first year the new usage costs are $1,929.60. Second year $1,939.25 – and so on.
Over 10 years, that little hike makes for a total electricity bill of $19,736…
Therefore, despite saving money in my offset, I’m still down by a figure of just over $12k. If the price rise was just 2% per year on average, its more like $21,443.93 paid to the electricity retailer (loss of nearly $14k).
Just for reference, 2% increase on usage costs, for the average of 25 cents per kilowatt hour in these parts, is half a cent.
If the increase was 4% (1 cent per kWh), I’m paying out nearly $24k in electricity. That’s enough to cancel out the interest savings AND put me in the hole for the value of my system!
Now For Something Completely Different
Man. Who knew an increase of 1 cent could hurt that much?
Let’s take another tack, and look at using the money I save on electricity against the mortgage.
degradation in Powerwall is cancelled out by increases in electricity price
money saved on bills will be put back into the mortgage*
* Again, it probably won’t, but given the opportunity cost matrix assumes that all monies stay dedicated to the mortgage, I say game on!
Starting at Year Zero with a capital position of negative $15,990 we can compound all our numbers moving forward. Remember, we’re adding $1800 into the pot every year from bill savings, as compared to my old provider.
Therefore in the first year, we subtract $639.60 in lost interest from the starting capital position, but add $1800 per year in bill savings. That rolls over to the new amount for calculating the offset in the next year.
This indicates that some time very early in the twelfth year is when I hit payback, under the opportunity cost calculation. That would be the system paying itself off in full, and accounting for the mortgage offset.
Does It Really Matter?
Really, these numbers are just an exercise in maths. And a bit of fun.
It would be highly unlikely in either scenario, that spare money would sit in the mortgage that long. There are things to do, and locking up a bunch of money for a few percent interest until I’m in my 50s? Sounds like wasted beer money, or holiday money, or holiday beer money.
Beyond the first year will I really save $1800? Will the addition of Reposit Power improve things further? What happens when the interest rate on my mortgage shifts?
Trying to cater for all these factors could drive a bloke crazy.
Looking at the opportunity cost is an interesting exercise, but it won’t keep me up at night. I’m hardly tying myself in knots with post-purchase cognitive dissonance either. I have a power bill that makes me smile.
There are also intangible benefits I’ve had on a personal level.
My rough biscuit has been on TV a few times, and across other media, which was a bit of fun.
I have created a little corner of the internet to blather my thoughts into the ether, and I’m flattered that people read it!
One of the best parts has been meeting with switched-on people, who want to make a real and positive change. They have a lot to teach, and I am in awe of the chance to learn from them.
The Australian Federal Election has been called for the first weekend in July. Like all these political things, its bloody hard to escape. The big parties are making the usual noises, but could The Australian Greens sneak up on them with a solar-powered stick?
One Bloke’s Perspective
I’ve don’t consider myself politically active. No time for student politics when you’re drinking at University. No set opinions on voting, except maybe putting the hard line religious parties dead last on any ballot paper, if they dare to show up in my electorate. Separation of church and state!
A firm belief that politicians get paid too much. That’s a point on which I’ve had many arguments. Australian politicians are among the best paid in the world, and have some ridiculously good retirement benefits.
Look, I’m quite sure parts of being a Member of Parliament suck, but there are parts of every job that suck. For that kind of money ($195K base + extras) I could put up with some crap – I already do for much less!
So I’ll stick my hand up and say that I’m opinionated, and probably naive in terms of deeper politics. But, as with art, I know what I like.
Australian Political Landscape
It has always seemed, to me at least, that the great irony of the political system in Australia is compulsory voting in a nation where, on average, people could care less about politics.
Yep, that’s right: you need to register to vote once you hit 18, and you can get fined if you don’t vote at either State or Federal level.
Oh sure, there are some dyed-in-the-wool supporters, who will unleash spittle at a rate of knots in support of their party. I’ve seen people nearly come to blows on election day; old dudes who look ready to go into cardiac arrest at a moment’s notice.
If you want a rundown on the major Australian political parties, go have a read here: the Liberal Party (conservatives) are in a Coalition with National Party (farmers) to form our present Federal Government. While they have their own little internal horse trading, the Coalition, as they are known, are fairly solid when it comes to opposing stuff from the other side, and pushing economic liberalism.
At the moment, the other side are the Australian Labor Party (progressives). In a similar vein to their opponents, they love nothing more than saying “Those guys bad! We good! Vote Us!” but politically are all about social democracy.
The fanatics of either side probably think everything is great when their lot are in power, and rubbish when they’re in opposition.
There other other parties, the most prominent of which is The Australian Greens (progressive environmentalists). However, they only hold a small number of seats, and along with some independents and minor parties, form the “conscience” of the Australian people on certain issues.
The influence of the Australian Greens is obviously limited in the bigger picture, but occasionally they’ll hold the balance of power in either house (upper house = Senate; lower house = House of Representatives) on specific issues, often forming a voting bloc with independents who haven’t already done a deal with a big party.
When you live on a continent with this much good weather, natural beauty, quality beer, and generally high standard of living, it doesn’t really seem to matter. Most people I know are of the belief that, regardless of who wins, there will be pros and cons, and its not worth getting worked up about.
The majority of Australians probably fit in the middle of politics, and will vote based on their conscience, guided in some cases by the media (who have their own agenda).
Combined with compulsory voting, and a hyped up news cycle feeding on social media, it makes Australia an interesting political minefield. This has resulted in some states recently suffering single-term governments for the first time in decades, as one notable fact.
It seems that people are just willing to throw out whoever is in power; parties don’t win elections, they lose them.
In turn, the major party politicians constantly play he-said/she-said in terms of trying to score points. Its quite tiresome when there are more important issues to address – things that affect all of us, and are largely being ignored.
The Biggest Issue
Across the world at the moment, the threats posed by environmental destruction, and ongoing threat of man-made global warming, are going to affect us all.
It is right there. People know it is right there. If you’ve been paying attention in the last 10 years, you know there is a lot of rubbish talked about how its not right there. It is one of those things that some people see as a threat to their way of life, or some kind of charlatan’s trick to cripple the economy, so they work to undermine it.
In Australia, we have such a very large investment in coal, across all of mining, export, and thermal power generation. There is even a campaign called “little black rock”, which I will not dignify with a link, which seeks to tell people how releasing carbon is awesome.
Australia has an abundance of bright sun and strong wind, as well as the emerging wave power we can generate. We have the highest level of rooftop solar PV penetration at around 1.5 million households. We have some of the best researchers in the world on Solar PV, and lots of space to build the necessary infrastructure, both domestic and industrial.
The Coalition government are definitely not keen on it. Under their leadership we’ve had wind farms called “visually awful” and cited other impacts, all of which have been long held in contempt by science.
They reduced the RET (Renewable Energy Target) and have had an ongoing campaign against change in the status quo, in order to protect their conservative interests in mining and export markets.
They have run the clippers over our peak scientific body, the CSIRO, valued here and internationally for scientific research and technology development. The move is ostensibly to move from “analysis” to “adaptation” of climate change, but when you look at the CV of their CEO, and hear some of the comments about his time in Silicon Valley, you have to wonder.
It won’t surprise anyone to note that the coal and energy lobbies pour money into the Liberal Party like water.
The opposition Labor Party (yes, that is the correct spelling) have also got a quandary on their hands, particularly as they seek to protect their traditional battleground of workers’ rights and family issues. They can’t simply shut coal off tomorrow, because it would leave a hell of a lot of wreckage on the social landscape of towns supported by coal.
Nevertheless, they have announced some targets, which are nice, but really could be more ambitious. Labor have strong ties to Unions, and the CFMEU (Construction Forestry Mining Energy Union) are a big player.
The gradual decline of mining has seen job cuts aplenty, and IMHO Labor need to work harder to convince people in the Unions that Australia can pivot into renewable energy.
Ironically, both the major political players are running the dusty political principles of “jobs and growth”, but aren’t really putting up alternatives to the status quo, despite Australia’s recent exit from manufacturing and the ongoing slide in the mining sector.
There is also a genuine fear of fundamental change, in part due to the historical allegiances the big parties have, and the unknown quantity of renewable energy in a nation historically riding on coal. The latter is understandable, as mining is what kept Australia bouyant during the GFC.
But, we’re at record low interest rates. Record high housing prices. Coal prices are falling, mining is shrinking. This isn’t 2008 any more and the government can’t just muddle through on the back of the mining giants.
Where is the next big wave coming from? When all signs point to a new revolution, neither of the big parties have used renewable energy as a pillar in this campaign, both as an environmental and economic winner.
The Australian Greens – The Little Engine That Might
At present, The Greens are under the leadership of Richard Di Natale, who has brought a kind of pragmatism from his Senate position in Victoria.
It is unlikely they’ll win many seats, but the growing youth vote has seen them take several inner-city enclaves away from the big boys in the recent past at State and Federal level.
Along with disillusionment with the major parties, forthright leadership from Di Natale will assist the Greens wrest more of the vote away from the majors in years to come. Is this a good thing?
Perhaps, if for no other reason than getting the incumbents to change their thinking. More promising is the option to add a third voice to the decidedly binary view of Australian politics.
This change in rhetoric from the Australian Greens also dispels the myth that they are just a bunch of left-wing loonies, ready to bring down society and take us all back to peace-loving hippies with unrealistic expectations of love and peace. And kale … or something.
Subtitled “Powering The New Economy”, the Australian Greens have released a document (PDF downloadable from that page), where they lay down the high-level principles behind fundamentally changing the energy economy, and several industries along with it.
Its worth a read, if for no other reason than to show that somebody is thinking about “jobs and growth” in terms that require a bit of a paradigm shift. The summary points are:
Ensure increases in energy efficiency
Get energy generation to 90% renewable by 2030
Establish a new authority to plan and drive the transition
Create a transition fund to assist coal workers and communities
Implement pollution standards to stage a gradual shut down of coal power stations in a suitable manner (dirtiest first)
All of these seem to be pretty reasonable, though I don’t doubt when some people read that – particularly those in the coal/energy industry – they’ll freak out a bit. And that’s OK, because change blows. We fear change.
The good news is, the Greens have released more detail about the transition process as it affects miners directly, as well as some dialogue on other policies via their website. Recognition of the issues facing people is not unexpected, as The Greens have a heavy emphasis on social equality.
Perhaps people still have this image of “Greenie” protesters who get all angry about people chopping down forests, or chaining themselves to mining equipment. Successive Greens administration have started to develop a more sophisticated approach to politicking, and it appears to be having an effect.
When I started this article, I’d planned a breakdown of the policy and the pros and cons of each bit. That would take a lot of words, and probably be a waste of time when you’re smart enough to figure out what the policy is about, by reading it yourself. So I’ll just look at one of the points above from a perspective close to my heart.
When looking at how efficient the average Australian house is, people in Europe would be mildly shocked. The reasons why are probably more eye-opening, in terms of our building industry hitting the trough, and hard.
Overseas building industries started their push for better quality and efficiency decades ago. In Australia, labour costs are high and house prices surging, so adding extra cost is tough to accept. Consumer apathy is also a big factor, when you’ve got relatively cheap, abundant coal energy.
As a result, a lot of new housing in the last two decades is single-brick house with minimum ceiling insulation in the form of glasswool batts. If you wanted wall insulation, you’d pay extra in your new build in a lot of cases. Some didn’t even offer it, and I understand its extremely difficult to retrofit (i.e. ripping out internal walls)
We generally don’t do double/triple glazing, and just stick big reverse cycle air conditioners into new builds to cater for hot/cold days. No wonder we’re big electricity consumers!
People living in older weatherboard houses might as well be in a wooden tent. The farmhouse I grew up in had louvered windows and a big pitched roof, and yet somehow we got away without air conditioning in summer, and just a potbellied stove or combustion fire for winter.
The great thing about seeking better efficiency, besides the obvious saving on heating/cooling requirements for the household, is the boost to the building industry in terms of jobs and growth (are you listening, major parties?). It also adds a layer of new requirements for retrofit options.
As new procedures and technologies are brought to bear, new opportunities crop up to establish service industries. This is especially important for people who might have skilled up in the practical arts of mining, and find themselves at a loose end.
A lot of people who went into mining got the training they needed, and can re-train to do something different in the building industry. Same for people no longer in car manufacturing after 2017. They’re smart people, and know the value of hard work. They need employment.
Better building practices can limit the upward growth of energy usage, as well as using the energy more intelligently. Along with home battery storage installed by companies like Natural Solar, smart control from Reposit Power, and better knowledge about how we use power, we can help limit the impact of change and minimise long-term costs.
The End Game for Coal
The Greens have put a shorter time limit on coal than the other political parties in Australia, recognising that this country has abundant natural resources for renewable energy generation.
They also acknowledge the practicalities of shutting down coal, and the social and financial cost in doing so.
However, their target of 90% renewables by 2030 leaves less than 15 years. In a political arena where The Greens won’t have the traction in Parliament to implement this kind of policy for at least the this Federal election, and probably the one after, you have to wonder where the impetus will come from.
With the falling price of solar PV, as well as the emergence of battery storage and the expected price drops there, I suspect we’ll see consumers have a big say in where the energy industry goes. The acceleration of uptake into battery storage, in particular, will force a rethink on network deployment and maintenance.
As I discussed in my last post, the Networks are interested in deeper consumer understanding. They realise that working with the consumer on grid-connected battery storage is preferable to alienating them into off-grid battery storage.
The increase in domestic renewable generation will have a
knock-on effect to the domestic coal market for power generation.
External forces like the falling world coal price will apply pressure from the other end. Mining for coal will come under serious pressure, particularly if it requires more generous subsidies from the taxpayer.
We have existing oversupply on our current networks, which presents the opportunity to shut down the dirtiest power stations (looking at you, Hazelwood) in the shorter term.
The white knight for mining companies could be other resources, such as Lithium. The demand for lithium will only increase over the shorter term, as battery factories (like $11B facility planned by Volkswagen) ramp up production.
It almost seems like closing the circle: moving energy away from coal requires more lithium, which allows mining to move away from coal into lithium.
Or is that too good to be true?
I think even with these factors considered, we’re still going to need one of the major parties to help the Greens get this type of initiative across the line before 2030. I wouldn’t be putting money on the incumbent Government to help if they get back in.
After all, you can’t spell Coalition without “Coal”.