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.
Of course, its not all gravy, with this last week in December producing two extremely hot days above 36oC (~97oF), followed by two days of rain. The former item consumed a lot of air conditioning, while the latter didn’t generate a lot of PV energy.
I’d love to have a Powerwall 2 to ride all that out! But I make do with having a grid connection.
The new panels were $1320 including GST. That takes the total system cost to about $18k at this stage, now including 6.5kW of PV, inverter, Powerwall, and Reposit.
That is an increase of roughly 8% over the original cost.
Generation capacity has increased by 1.5kW / 5kW = 30%.
That figure is a bit fuzzy because the existing panels don’t face the same direction as the recent additions. Also, the inverter I have is limited to 5kW of throughput. So chances are I won’t use all of that capacity across the year. Let’s call it 20% as a “real” figure.
Regardless, the main point is looking at the cost increase over the capacity increase. Extra funding of 8% has allowed my system to gear up by a potential 20-30% in terms of generation.
This shows what anyone experienced with solar will tell you: panels are cheap. Get as many as you can, with the biggest inverter possible.
As I mentioned in my last blog post, I now have data on finalised billing to cover about 70% of the year.
It shows my electricity cost – including daily connection fees – at roughly 71 cents per day.
Summer is yet to be added to this data set. Like winter, the primary environmental control (my ducted air conditioner) will get usage. I also have a pool pump that runs more in summer than winter.
Looking at historical bills, I tend to use about 3% more in Summer than Winter. Whether that still holds true depends on a lot of factors, particularly seasonal variance. Maybe we had a warm winter last year? I can’t remember.
This may not be significant in the face of increased solar generation:
Self-consumption can increase with longer daylight hours
Export can increase with higher generation capacity
Taking a Stab At It
Alright, so putting my analytical neck on a chopping block, here is what I think will happen.
Disclaimer: I am cheating a little in that I have data from Reposit Power to guide me on the days I know about since the last bill. To balance that out, not all my billing days were time-of-use (was on single-rate until August), so I’m flying blind in other ways.
As I’m writing this, I have realised just how many moving parts there are! This is going to be tricky, so let’s start with actual data.
Looking at the Statistics page of the site, fed by SolarEdge API, I can see my lifetime system statistics. All of which is very interesting to look at, but only two matter; import versus export.
These two factors are Summer in a nutshell. Increased import, possible reduced export. The daily average covers each day in the last week (up to 16th December, inclusive).
If we add the 3% increase I am predicting for summer from my historical billing, it doesn’t change the import much. The lifetime import has only been around 3kWh per day, so 5.47kWh per day represents an increase of 2.5kWh.
With peak tariff, this could be as high as 90 cents per day! Shoulder rate and offpeak rate make it 69 cents and 35 cents respectively.
I also need to factor in that Reposit Power imported a few offpeak kWh on Friday morning, so will call the extra import 2kWh per day. I’ll use the peak tariff rate to established increased costs of 75 cents per day.
On the flipside, I don’t think the 9kWh export figure is accurate due to the amount of cloud we had over the two days. The lifetime average is about 11kWh. To this, we add the 20% of our extra generation capacity to arrive at 13kWh per day.
“Wait a second!”, I hear you cry, “you’ve already had those extra panels on for a couple of months!”
Yes, I agree. However, we’re now hitting peak summer, so given my 20% figure was a fuzzy projection, based on 30% increase in capacity being the limit, I think it still works.
Again, looking at the statistics, you can see the 28-day retrospective is 13.92kWh. So I’m sticking with about 13kWh per day, keeping in mind I’ll be self-consuming a bit more than usual with the pool pump running.
An extra 2kWh per day exported is 16 cents in reduced costs.
Combine the two of those, and we had 75 – 16 = 59 cents per day.
This is extra, over the historical average of 71 cents per day. This brings us up to $1.30 per day for the summer bill.
Remember, I proposed a 3% increase of Summer over Winter, based on historical billing. The “Winter” bill I received back in September was $1.27 per day.
If you add 3% to that, you come out at $1.31 per day, so I’ll be keen to see if I get that close to my estimate of $1.30.
But What About Payback Time?
Very good question. I’ve just added $1320 capital cost to the system, and spent the last couple of hundred words speaking about Summer only.
Using the summer figure I calculated above, and wrapping that up into the billing I’ve received, puts the annual cost of electricity at my house around $310 as I’ve stated previously.
That is a saving of roughly $2k per annum over my old billing from last year. With the system cost now at $18k, that is a 9 year payback on simple calculations.
However, Autumn and Spring are the counterpoint to the Summer and Winter electricity burn for cooling/heating. Those times of year need to be exploited.
If my exports climb by 20% for both those seasonal bills, then the gains per year could be quite gratifying.
The two bills I have for these periods work out to 59 cents per day (March-June using single-rate tariff), and 24 cents per day (August-October on time-of-use).
The other key factor was full operation of Reposit Power with TOU tariffs, with is another massive advantage along with GridCredits. I can import very cheap power for anticipated poor days of PV generation.
Along with the extra generation capacity of my new panels, this shunted the power per day figure down by nearly 60% for Spring over Autumn.
If this holds for next year, and the Autumn power bill goes down to under 25 cents per day, it will mean for half the year I’m paying $44 for electricity. For the other half (Summer and Winter) I might be paying about $240.
An annual power bill of $282 sounds a lot better than the $2300 I was paying a year ago. And shifts simple payback under 9 years, by a few months.
The addition of these panels doesn’t look like a big deal on the face of it, but I’ve been fairly conservative in a lot of estimates.
I haven’t taken into account any GridCredits I receive, or the Diamond Energy Customer Referral fees I might get. So perhaps under 8 years is possible once the whole-of-environment changes are considered.
I’d like to thank everyone who has popped in for a look at the blog this year. Thanks for the connections on Twitter as well!
It has been quite an interesting 11 months since I got the Powerwall installed, and I’ve certainly learned a lot.
I have made an effort the last few years to put up Christmas lights, and copped sunburn, cuts and scrapes doing it. But its definitely worth it for the look on the faces of the local children.
I would like to wish you and your families a safe and happy holiday season, wherever you are.
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!
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.
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!
On Father’s Day (4th September) I decided we should go for a Blue Mountains Bushwalk. Blue Mountains National Park is World Heritage listed, and contains a diverse range of flora and fauna. It is located about two hours west of Sydney CBD.
This makes them about an hour from my place, and a great spot to get some fresh air and outdoors. There are many trails, and a variety of hikes from day walks to multi-night camping trips. Many tracks are accessible via public transport, and some link train stations together. This allows convenient one-way hiking.
After a hearty breakfast we headed out on the motorway west. About an hour later, we arrived at Evans Lookout near Blackheath. The view from the clifftop is always amazing.
After a few minutes enjoying the warm sun and panoramic views, we set off. Our goal was to walk the Grand Canyon track. And no, that isn’t the Grand Canyon in the picture above.
The track is a really interesting study in the Australian landscape. As you descend from the dry sandstone clifftops into the canyon, you see rapid changes in the plant life around you.
The folds of the land in this area shelter more fertile soil, moist from recent rains. The temperate rainforest native to the area looks direct from another age.
Most welcome, particularly in summer months, are the cooler temperatures. Even though the track is hard enough to keep you sweating, there are many opportunities to pause and admire the sights around you.
I had previously done this walk with a friend a few years ago, when we descended to the valley floor. We covered 20km including some very rough and steep terrain. With the kids in tow, it made more sense to do the 6km walk in about 4 hours.
After the first hour, crossing a creek multiple times, we arrived at the bottom of the track and paused for lunch. I think you’ll agree its a nice spot.
The picture above is the view as you approach from Evans Lookout. The trail across the creek turns right and heads around the loop, back to the carpark. Following the trail off to the left you will be treated to magnificent views, but some tricky footing. Be warned!
The Track Back
After lunch, we headed on via the loop, on a trail I’d not been on before. And I’m kicking myself I didn’t know about it earlier. Though it is much longer than the pre-lunch section from Evans Lookout, it is well worth it.
The Australian continent is quite dry overall, but this day, the recent rain was in evidence. Whether babbling along the creek bed, dripping from the rock above, or pooling under the cliffs, it was nice to see.
As the trail climbed, it moved under a series of overhanging cliffs. It seemed like there was another awesome photo opportunity around every corner. My poor old Nexus 5 started to fill rapidly.
You could often hear water rushing past, but not see it. The sandstone, eroded over millions of years, could only send echoes of rushing liquid life back to us. Around the next bend in the trail, you were suddenly getting soaked from moisture overhead. It was almost magical.
It was a great day out, if a little challenging physically. But a Blue Mountains Bushwalk should be on everyone’s list.
If you’re ever in the area, check out the details about Grand Canyon Track at Wild Walks. They have maps, directions, photos, and points of interest for this track, and many others.
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.
It has been a hectic couple of weeks, after the release of my first quarterly power bill. I’ve been on radio, TV, in print, and sprayed around the internet. Its a bit like the install day back in January, but obviously with a dollar figure attached.
Despite that, there is still a lot of people ready to step up and put the boot into Powerwall, and lithium storage in general. I will never fathom why these parties are against progress, so I don’t read into it too much.
BUT ENOUGH ABOUT THAT…
During that time the world rolled on, and it appears renewable energy, particularly solar hybrid, has been going from strength to strength. One tweet in particular caught my eye, from Noah Smith.
2010: "Solar will never be viable without subsidies!" 2013: "Solar will never be viable without storage!" 2016: https://t.co/LHvPC2IVyw
The Telegraph article linked by that tweet, written by Ambrose Evans-Pritchard, is an interesting discussion on battery storage as it affects the landscape. It is also a bit of a dig at the Hinkley Point nuclear project in England.
I wrote something previously on Nuclear Power, so without a re-hash I will reiterate: I AM NOT ANTI-NUCLEAR. However, I did point out there are significant financial hurdles to overcome in Australia. Leaving aside the social issues, that is.
Three paragraphs in the article from Evans-Pritchard got me thinking.
Perhaps the Hinkley project still made sense in 2013 before the collapse in global energy prices and before the latest leap forward in renewable technology. It is madness today.
The latest report by the National Audit Office shows that the estimated subsidy for these two reactors has already jumped from £6bn to near £30bn. Hinkley Point locks Britain into a strike price of £92.50 per megawatt hour – adjusted for inflation, already £97 – and that is guaranteed for 35 years.
That is double the current market price of electricity. The NAO’s figures show that solar will be nearer £60 per megawatt hour by 2025. Dong Energy has already agreed to an offshore wind contract in Holland at less than £75.
Those are some pretty compelling numbers, but the reasons why it got me thinking relate to my own work life.
A Short History Of Dwarves
I’ve been an IT guy for a living nearly 20 years now, working mainly in databases where I can help it. I’ve seen almost every tech acronym or buzzword put into practice, sometimes very poorly. Or for the sake of change.
One of the better periods was back in the day, when the technical stuff was held apart. I like the imagery that Neal Stephenson uses in Cryptonomicon – IT guys were like the Dwarves in Tolkein; working away in the dark, hammering out things of beauty like Rings of Power.
The company (Elves) would frolic up to the entrance of the forge, beseeching the Dwarves for a solution. The Dwarves would give a range of timelines and costs, and the Elves would pick one. We’d go into the forge, create what they wanted, and the land was content.
With advances in technology, and the hunger for globalisation, things needed to move faster. Thus, “Agile” was born as the new way to do things.
Generally speaking, the move to Agile is positive from my point of view. It seeks to guide the Good Ship Project through the icebergs as each one appears, not assert a course from Day 1 and expect no issues with implementation at all.
As long as Agile is implemented the right way, it can do good things.
There is a caveat though, and the seed of this started with smart devices in my opinion. If we’re ever having a beer, talking shop, I’d pinpoint smart devices as disruptive in more than just a good way.
Now non-technical people see an awesome app for $1.99 and wonder why projects still cost millions. As a result, they demand more.
Agile has collided with this belief that speed of delivery, and convenience, is cheap. Non-technical people don’t necessarily understand the systems. They’re trying to tell the developer how to do their job down to the finest detail. That isn’t actually helpful.
Dear Managers: right now, there IT guys reading this, and nodding their heads. Maybe muttering. Likely, swear words and dark thoughts are being countenanced.
Agile Energy Projects
One thing that holds true of IT projects, energy infrastructure, and pretty much anything down to a backyard deck, is the Quality Triangle.
If you are going to implement or change the project in terms of finances, timeline, or scope/size, then you have to accept it will affect the quality of the outcome. Aiming for all three is purely theoretical, in my opinion.
As with the recent Census Fail incident in Australia, sometimes it doesn’t matter how many resources you throw at a project, or how long it runs. The excreta hits the rotary ventilator, and its time to put out fires.
Hinkley Point C is subject to some base requirements, but the main one is the generation of 3200 MWe from a nuclear reactor. Not the biggest in the world but still a mighty undertaking.
Once you’ve decided it will generate that much, you’ve set your course. A prescribed amount of effort, human resources, and other elements must go into it. Critically, the reactors will be of a certain size and type, and you’ll pay the capital cost of that regardless.
If you encounter cost overruns or other issues, generally speaking you just have to suck it up, as per the article:
… the estimated subsidy for these two reactors has already jumped from £6bn to near £30bn. Hinkley Point locks Britain into a strike price of £92.50 per megawatt hour – adjusted for inflation, already £97 – and that is guaranteed for 35 years.
In Australian terms, that is $160 / MWh, which is frankly ridiculous.
All of this points to the fault lines emerging in “baseload” power argument. Not only is “base” power a myth, but the agility of these big power generation units is practically nonexistent from conception through to decommission.
As Hinkley Point C, and Finland’s Olkiluoto construction debacles show, centralised nuclear power might be green, but it isn’t necessarily going to stand the test of time, economically.
Smart Advantage of Renewables
Technologies I have seen work, or worked with directly (like Reposit Power) show us that agility is the biggest factor in any tech marketplace today.
And let’s not kid ourselves: energy delivery is now a technology field. This is particularly true of renewable energy, which eschews the old school sledgehammer approach to power generation, in favour of smarts.
Smart use of power, smart direction of power, are going to be the big players moving forward. It starts with domestic applications, such as Tesla Powerwall, and smart management to deliver benefits for the home owner.
Beyond serving one household, it has the potential (and in some ways, the obligation), to serve the wider community.
This is achieved by using the battery as a trading platform. Benefits abound for the network willing to engage with customers, as I discussed in May. Reduced overall costs and waste benefit everyone in the longer term.
This move toward smarter storage also helps address the business sector. The power needs there are large, and despite being mainly during the day, will not going to tolerate the intermittent fluctuations of solar PV and wind.
Storage using batteries is one leg of the argument, across a various range of chemical makeups. Energy storage like pumped hydro can also assist deliver stable power on a larger scale. The big one for Australia should probably be molten salt reactors, particularly for South Australia, which has suffered issues recently.
Certain industries have scope for change today. Heavy transport, and transport in general, is already under the microscope in nations like Sweden, where they seek further reduction in carbon emissions.
Electric Vehicles take carbon off our roads and out of the manufacturing process through a simpler template of construction. If you don’t believe that, think about the amount of metal required to build a drive train for a petrol engine, versus an EV’s battery & motors setup.
How do we address the remaining heavy industry players, and areas outside domestic power supply that aren’t easily converted to renewable technologies?
Scale Advantage of Renewables
Critics of renewable energy sources often derisively quote land area required for building large-scale generation. Regardless of whether its wind, solar PV, pumped hydro, molten salt, or another method, a “farm” for renewable power will take space, that is true.
Renewable energy projects are much simpler to implement from an engineering point of view, compared to a nuclear reactor. They are also more flexible.
A nuclear plant, once scoped, has very little opportunity for changing the Quality Triangle. It also isn’t going to get much more efficient if you delay implementation, because the technology is largely static.
Manufacturing issue with your solar PV arrays? Let’s just get less panels for now. They’ll be cheaper later on, or more efficient, anyway.
Dispute over one of your wind turbines? Fine: proceed with the rest of the farm until the outcome is known.
These are two examples (there are more) where the scalability of renewable energy creates a huge advantage. The unit size of a wind turbine, or a solar array, is in no way limiting for people who know how to implement them.
Pumped hydro and molten salt reactors are similar to traditional power stations, in that their capacity is roughly determined at time of construction. The key difference is they are primarily storage, over and above being generation.
They don’t need to be on all the time, only engaged when other resources are running low, or as demand spikes. This is another advantage over “baseload” coal or nuclear, which cannot uplift to address demand spiking.
Only gas-fired stations have this ability at the moment. The surging price for gas, as well as its status as a fossil fuel, renders it a short-term option at best.
The Paradigm Shift
You cannot simply build a traditional network and throw more and more renewables at it until you reach a very high number.
Coal in Australia has been built to over-capacity, resulting in wasted capital expenditure, and poorly managed outcomes. Witness the issues South Australia has at the moment, because of short-term thinking around renewable energy integration.
We need “smart” implementation of renewable energy projects. Flexibility must remain a core tenet of implementing this intelligence.
As Evans-Pritchard covers in his article, there are many storage options in development across the world right now. We’re in a period of real transition where more options will blow the marketplace right open.
This requires the right thinking, to engage renewable sources on a far larger scale, holding hands with storage options of all kinds. Markets will shift rapidly. Consumer needs, particularly in the developing world, will have no need, and no money, for sledgehammer tactics like “baseload” power.
Projects designed for even 30-year life cycles will find themselves at risk of rejection. It will be simply uneconomical to support such inflexible systems.
With the right people at the wheel, concerns over our energy needs, and the perceived shortcomings of renewable energy, needn’t be a concern.