To Find A Satisfying FiT

No, not a satisfying fit for your pants!

FiT in this context is Feed in Tariff, or what you get paid for exporting the excess electricity generated by your solar panels.

fit
(c) Your Solar Quotes

If you click on that image, you’ll see sample rates currently provided in Australia. A couple of them might be out of date, for example with Diamond Energy, a company based in Victoria, I now receive 12 cents per kWh. I’m in NSW but that offer is wherever they can service my account.

Note that in many cases this is a net tariff i.e. excess solar only, not a gross tariff. You can read about the difference here.

There are people still on gross FiT tariffs, getting upwards of 40 cents per kWh. These were incentives for getting the solar industry moving in Australia, and did their job. Some of them were planned out for over a decade, and have given their owners fantastic service.

Governments attached rules they thought would be broken easily, like losing the gross FiT if there was a change of owner, or if you altered the system. Consumers got around this by buying the system they could afford and never moving house.

As a result, we’ve got a LOT of systems out there under 2kW that need updating to give a net tariff of under 20 cents a fighting chance. A lot of these people are looking at batteries.

I suppose, if you’re somewhere like the USA, some of those figures look pretty sweet. Keep in mind that the average import tariff right now in Australia is around 30 cents, after recent price hikes.

As a result of this visible mismatch, many people wonder why FiT isn’t much higher. After all, those of us with Solar PV on our roof help lower everybody’s bills!

Why do I get paid “only” 12 c / kWh* for my export, when I pay somewhere between 18 cents (off-peak) to 35 cents (peak) for import?

* BTW if you like the look of that 12 cents action, get in contact with me via Twitter – if you sign up with Diamond using my details, we both get an account credit.

There are several reasons, and for this discussion we’re ONLY talking about the east coast grid (the NEM). That’s where the facts and figures are coming from.

Profits Matter

First: I don’t work for a big energy company. I get accused of it regularly when I tweet about energy, but I just don’t.

I do understand that people need to make money. No business profitability = no jobs = no cashflow for other businesses. That’s simple economics. Of course, maybe companies don’t need to make quite as much money as they do, I suppose.

Another truth of our energy market is we have generators and retailers in the delivery chain. This has been the way of things for years, and decouples the generation (industry) from customer service aspect.

Speaking for the eastern half of Australia (not Western Australia or the Northern Territory who aren’t on the NEM), this means competition is supposed to happen at two levels: wholesale and retail.

The National Electricity Market (NEM) connects the 5 southeastern States of Australia, as well as the Australian Capital Territory.

It is the wholesale market. Spot prices are generated to deliver value to generators, so they can pay their staff to manage the backbone of the grid. Additionally, there is the cost of network maintenance as a big line item.

There are instances where generators have held back supply until the spot price gets to ridiculous levels. This behaviour is not illegal, but not exactly ethical, and affects pricing. It is being cracked down upon.

Retailers operate as clients of this market, and have their own battleground.

They need to account for the variation in spot prices in their retail offering, and look at best- and worst-case scenarios.

How do they keep the lights on, pay for staff, and ensure they’re getting a slice of the pie?

Keep the offering as low as they can manage. This not only means trying to keep prices down to attract customers, but also the FiT paid to those customers with solar.

Retailers may have other ways to sell e.g. percentage discount for paying on time. Maybe a few more percent discount for debiting a bank account, which has slightly lower fees than processing a credit card.

Wholesale Pricing Matters

What do the electricity generators actually make? This is important to understand, if we consider the panels on my rooftop to hold a value similar to the big boys.

Check out the second chart here from the knowledgeable @simonahac (and give him a follow because he knows his stuff).

The dollar values above those green bars represent the average spot price per Megawatt hour of electricity in the NEM. In his words: “the average of each day’s volume-weighted average price received by the entire generation fleet’s delivery into the NEM.”

The average* of those five dollar values is a tick over $90.00 / MWh. Dividing by 1000 gives us a price of around $0.09 / kWh.

If that is what I get paid as a generator, I need to make profit on that, so I need to find the best way to deliver appropriate volume.

That is important when we consider the next major leg of the argument.

* Yes I’m fully aware that averaging a set of averages is not accurate because of volumes in each primary set. Just go with it.

Reliability Matters

OK, so let’s assume for a second the “power companies” are all money-hungry, price-gouging fat cats swimming through a pool of cash.

I group generators and retailers together in that statement, because most people don’t understand the difference.

BUT its significant to get your head around the concept, because of the way the NEM operates. Read about that here, without worrying about ancillary services just at this point.

In summary: retailers bid for large volumes (MWh) of generator output, which is based on a forecast. In doing so, retailers expose themselves to financial risk. They need to find that sweet spot to on-sell smaller volumes (at a higher rate) to their customers.

Market volatility can be huge, and as a retail you’ve got competitors. This is not as simple as selling widgets down the Sunday markets.

You can read the details if you like about wholesale pricing in the NEM.

As a random dude/dudette with solar panels on my roof, I’m already getting paid a fairly competitive rate compared to wholesale market spot price. If the big boys get around 9 cents, my 12 cents is pretty sweet.

There is no way I can enter the market with promised volumes like a big generator. Similarly, I can’t guarantee exactly when I’ll be able to provide my paltry 0-20kWh per day.

Is 8 to 12 cents per kWh a fair price, given I don’t meet a lot of the criteria for market supply? I’d say its in the ballpark. I’m around where the wholesale price is, after all.

A side point here that the average person doesn’t understand: small consumers pay their electricity rates differently to big consumers.

A big consumer will pay what looks like a very small rate – often under 10 cents per kWh. Its a volume discount, effectively.

The catch is that the number of kWh they are charged for is based on the peak number of kWh consumed in a half-hour period that month.

If a business has one bad day in summer where all the air conditioners and machinery are running, they’ll get stung, and hard. The retailer may only look like making a couple of cents on each kWh, but if they’re charging on the peak consumption, a lot of kWh are empty space. They never arrived.

As big consumers become more savvy, and introduce measures to monitor and control those peaks, they can pare back these costs. Retailers might lose margin. Its a game of chess.

A FiT Analogy

Disclaimer: I am not wired to provide good analogies, so let’s get this over with…

Let’s say you run a taxi service, and for argument’s sake we’ll call it Wholesale Taxis. Your taxi will run any time of day, turn up on time to bookings, and take the most effective route to the destination. You charge $10 per trip for this service.

Let’s say I’ve got a taxi service, and I’ll call it Rooftop Taxis. My taxi only runs during the day – and goes at half pace (or not at all) when its raining. If a cloud comes over, my taxi will slow right down, and you might miss that meeting you booked me for.

Would you pay the same $10 for that trip? Not likely. I’d have to cut my rates to reflect what I am likely to deliver.

I can still be useful, but I’m not going to get business ahead of Wholesale Taxis, because of the risks my service presents.

Bad analogy over.

Hold Up There, Haters …

Before you conservative types go using that analogy as an argument against the reliability of renewables, keep in mind I’m only talking about small scale producers here i.e. rooftop solar PV, or those rare beasts with domestic wind operations.

This isn’t a reliability problem; its an issue around intermittent behaviour for the market to manage.

And if you want to talk about “baseload”, read this instead, and get back if you gain understanding.

Increasing FiT Value

I don’t think FiT should increase. I think things are fairly good the way they are, with prices in the ballpark of the wholesale market.

I’m of the opinion that FiT in either gross or net guises is probably on the way out.

Introducing generation capacity that doesn’t operate through the NEM needs management. That requires a lot of systems to be able to handle abrupt changes in the network.

A link I provided above to the NEM wholesale pricing talks about ancillary services. One of these services is Frequency Control Ancillary Services, or FCAS. It is extremely important from two perspectives:

  1. Introduction of supply that can be intermittent (mostly renewables)
  2. Evolution of the grid from metronomic consumption to demand response

The first point has been done to death. The second point is key.

While a few of our politicians would like to pretend its still 1950, the Australian grid has moved on. Coal stations are reaching end of life, or are well past it. Generators are exiting the coal market in Australia, and with good reason.

(Also follow Prof Willis – he is another bloke who knows his stuff).

At the same time, consumption patterns of users are changing, which render slow-response systems like coal and nuclear of limited value.

It takes hours for a coal or nuclear power station to respond to demand changes. Even gas stations take minutes to vary output, and the new grid needs it in seconds.

Technology is moving to address this, in order to better integrate renewables and other sources into the wider grid in Australia.

Schemes to control demand, including those backed at the highest levels, will assist the grid in coping with peaks.

A measure of stability will still be required, though, particularly from multiple, small generators. What is needed is a way to buffer power and hold it back for peaks.

Storage FTW!

Yes, as a Powerwall owner, with Reposit Power GridCredits hooked up, I was always going this way. But it makes a whole lot of sense.

As solar and battery prices continue to fall, a new resource is growing in the market: the Virtual Power Plant (VPP). I’ve covered this before, and have not yet seen any convincing argument against it.

Besides Reposit Power, companies like GreenSync, PowerLedger, and even inverter manufacturers like SolarEdge are looking at multi-site power trading and optimisation for solar PV and batteries.

Would the market continue to purchase intermittent solar PV from small producers, where enough battery storage exists in the NEM?

I believe the market players would tend toward the reliability of supply that storage offers. Importantly, batteries can report back how much they’ve got, and how much they can deliver.

Consumers would leverage their investment in battery technology, and participate in the market, at better rates than they get now. Perhaps a pure solar FiT would still exist, but not at the levels we have today.

It may not be enough, though. That’s where the big boys step in, and start using hydroelectric power as the world’s biggest battery (sorry, Elon).

FiT Hydro
Snowy Hydro Scheme, Australia (c) snowymountains.com.au

While hydro power is not perfectly green, as some believe, it represents a step forward to a lower-carbon future.

In Australia, several people in the know are looking at pumped hydro, which is a form of large-scale storage that doesn’t require a natural river source.

Excess solar or wind during the day can be used to pump water uphill. At night, or on demand, the turbines can spin the other way to send electricity out.

FiT Pumped Hydro
Pumped Hydro (c) abc.net.au

Even on the driest inhabited continent, there are enough pumped hydro options to help our grid to 100% renewable energy within two decades. Using wind, solar, and pumped hydro together could be a very feasible answer.

Financing them in the face of fossil-fuelled opposition is the road block. Particularly when our federal government cannot formulate energy policy.

Storing electricity is going to be critical as the grid evolves. The role of a standard FiT for small energy producers is, in my opinion, up for review.

Sonnen Versus Human Nature

German battery company sonnen has entered the Australian market, with their sonnenFlat product. I would have written about it earlier, but I’ve been suffering a fairly serious flu that is hitting Australia late this winter.

On the surface, it looks like a fairly sweet deal. Add a Sonnen battery pack to your existing solar array (or buy that, too), and never pay for electricity consumption again.

In return, sonnen get to use the battery storage as they see fit via the concept of Virtual Power Plant (VPP).

There are a few conditions of course, as this article from Solar Choice’s James Martin II points out. I’d also urge you to also read the comments section as Solar Choice provides further information via responses.

My first impression on seeing the details: this is a mobile phone plan, but for electricity. You pay your $30 a month, use up to the “cap”, and then get charged for excess.

So what are the “gotchas”?

For The Provider

sonnen will make some money on battery retail, first and foremost. The consumer pays for the upfront cost of the battery system, as well as the ongoing payment.

In return, sonnen get a VPP, with which they can play in Australia’s energy market.

Sonnen Eco 8
Sonnen Eco 8 (via Natural Solar)

This may include direct retail of energy, but I don’t see it, despite their promises to “kill” the traditional energy model.

When the sun goes down there is no generation available to them as a standalone provider, and the battery users they are supplying “free” power to will take most available demand from storage.

Most likely, sonnen will seek a partnership with an existing generator and/or retailer. There is already talk of sonnen investigating agreements with companies like AGL, one of Australia’s largest energy providers.

There is a bit of VPP talk going around in Australia at the moment in general. It is one of the ways in which we’re going to address how we manage the grid into the future.

It is acknowledged that demand growth for traditional grid generation has tapered off due to a few factors. This includes better energy efficiency, and uptake of renewables behind the meter. Departure of some industries like car manufacturing also contribute.

However, the need for smarter demand management is growing, particularly where the consumption profile is changing for consumers and industry.

Simply put: we don’t consume energy the way we did in the past. Terms like “baseload” are swiftly becoming meaningless, and I’d urge you to place limited trust in people who say it is a priority!

For The Consumer

The obvious advantage is cost savings. By investing in a sonnen system, you can fix the running cost of your household for years, literally.

Paying $360 per annum for electricity would sound like a fairly sweet deal for most, particularly as some consumers have just seen price hikes of up to 20% in Australia.

There is the up front cost that could make the whole conversation moot. Like the arguments around leaving the grid altogether, capital outlay is going to be a deal breaker for a lot of people.

Caveat EmptoR

In one of the comment replies in the Solar Choice article, they note that the “cap” includes ALL usage in the house i.e. not just imported electricity. This starts at 7500kWh per annum for the $30 plan.

For the consumer who can afford the investment, and just want a set-and-forget system, that makes a lot of sense. The consumer doesn’t have to micro-manage the system, and maybe has the option of getting a little bit smarter about their usage to try and fit under a lower cap.

One real risk is for those users who sign up thinking its all about “free electricity”. If they don’t look after their consumption, it will start to hit the hip pocket, and quickly lead to consumer regret.

And what if your household doesn’t consume 7500kWh per year? As unlikely as that sounds with 20.5kWh to play with. What sort of plan do you go on?

It is critical to understand your consumption across the year, before deciding which system or plan to sign up to.

The

Does It Fall (sonnen) Flat?

I’m a consumer who bought a battery without a plan like sonnenFlat behind it. I took some actions to maximise that investment, particularly trying to ensure the house runs lean.

The statistics I’ve compiled bear this out. My consumption figure of ~16kWh / day via the system APIs is lower than the ~21kWh / day I took from my billing data.

The less I consume, the more I can export, which produces direct financial benefit for me. I’d also like to think it lowers my carbon footprint a bit.

This is a secondary problem I see with sonnenFlat: you don’t get any benefit from being smarter or better about your energy consumption. Where is the incentive to use less?

To me its a similar argument to those people who are on-grid, but try to consume 100% of their solar generation. Sure, that’s great if you’ve got a smaller PV system and need to be really smart about your use.

I just don’t see the point in running a device you don’t need to for the sake of using up your solar power. Particularly when you can export it for the benefit of others (and yourself!)

The Good News

I think the concept of sonnenFlat is moving in the right direction in several key areas.

The surety for consumer electricity bills, while not demanding too much of their capacity to understand the system, is great.

The addition of more battery capacity in a VPP adds important ancillary services to the grid. This helps the grid evolve and integrate to these new, smarter services.

 

It also shifts the discussion about batteries further into the spotlight for the “Mum n Dad” consumer. While the Tesla Powerwall created a spark, it was priced only for early adopters. Powerwall 2 suddenly put the financials into reach.

This type of offering – promoting batteries as a service, not just a device – is an important step for consumer markets. One day, batteries and solar will not be a case of “are you getting one?” but more “which one are you getting?”.

The entire retail model is evolving, to the point where you’ll buy your battery and have a plug-n-play installation. Installing solar is slightly more difficult for the average home owner, of course, but it can happen.

IKEA are already offering shopfront retail in the UK, and it will only spread as retailers see profit in the full suite of service provision.

In the absence of anything resembling progressive Federal government policy, all these elements assist our systems to evolve.

More importantly, they help inform our consumers, who are also our electorate.

SolarEdge Updates

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.

SolarEdge Updates

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.

SolarEdge Updates
April 2017 to date

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.

SolarEdge Updates 2

For reference, the figures are in the table below for the three months with suitable data.

Month MWh 2016 MWh 2017
February 0.728 0.780
March 0.695 0.617
April 0.523 0.588*

* 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.

 

A List Of Stuff

Realised it has been over a month since my last update. I’ve been kind of busy doing stuff with work, family events, and also putting a Rugby Club through its pre-season setup.

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!

Hydro stuff
Thanks to wikipedia

So here’s a scatter gun approach to energy blogging:

Scamwatch Stuff

Part 1 of this is a scam warning. A group listed “50% OFF!” specials for LG panels and LGChem batteries here recently. One example:

LGscam stuff

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.

The BILLIONAIRE Battery BOOM Stuff

As reported both here in Australia and overseas, some interesting tweet action went down between Atlassian’s Mike Cannon-Brookes and Tesla chief Elon Musk.

         

I don’t need to bore you with the details of the tweets themselves; if you’re here reading my blog, you probably saw it go down.

 

However, if you’re reading this from overseas, what you need to understand is that the talk about batteries is going ballistic here.

MCB and Musk really kicked things off for South Australia’s call for grid-scale battery proposals. But the process was also well underway in the state of Victoria, seeking to go large on storage as well.

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.

Coal stuff
Pictured: idiot behaviour (c) abc.net.au

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…

Lenore Taylor provides a great breakdown in The Guardian on why this is important, in terms of how a leader, thought of as progressive, is still held back by the dinosaurs in his own party. You should read that article. Go ahead – I’ll wait here.

My issue with it is in the execution.

Expanding the Snowy Mountains Scheme in this way is an increase of 2000MW (2GW), which is not insignificant. It’ll cost AUD$2B which is also a pretty fair price.

BUT it will take somewhere between 4-7 years by all estimates. That means it isn’t really going do much more than keep up with demand, if at all.

There is also the danger that the goal posts will have moved entirely during that time. As I posited last year in Agile Energy Projects In The Marketplace: big projects can quickly become unwieldy.

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.

This is true in a market where things are changing rapidly, and particularly true in Australia, where we are shutting down old infrastructure.

The removal of the “baseload” paradigm is going to become more common, and require a smarter, more responsive network to cater for integration of many new technologies.

Hydro Power is as subject to this brave new world as much as wind, solar, or other sources.

I think we’d be better off kickstarting a solar thermal industry.

Solar stuff
Tower of Power. Wikipedia

Powerwall Stuff

This month sees the Powerwall v2 landing on our shores. It promises to be interesting times as we move from the early-adopter stage into mum-n-dad market.

The housing market is already seeing the potential, with Metricon offering Solar + Storage in home builds in the state of Queensland.

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.

Statistics Stuff

Here in Sydney it has been rather damp the last month or so. Tropical cyclones off the northeast coast of Australia have caused a lot of damage there. The storm train they pushed south has kept the cloud in play for many days.

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.

Its more like hourly, now 😉

 

Year Of The Powerwall

Let’s get straight to it: 50 cents per day.

That is what I paid for electricity over the 350 days of billing I have since the Powerwall was installed, and my electricity provider changed over.

This is important to note, as the two weeks up to change of provider meant I wasn’t getting any export benefits from my solar panels. Mugged!

The saving is over the $2000 mark, but for the sake of round numbers, let’s call it $2000.

Year Of The Powerwall
OK, so not exactly this good, but pretty good…

To put in perspective what money means to my family: our recent road trip, to central and southern NSW, cost almost exactly that. Essentially, I got my little summer break for free.

Facts And Figures

According to the billing received by Diamond Energy over the 350 day period:

  • Import total was 1349.830kWh (or 3.857kWh / day)
  • Export total was 3807.403kWh (or 10.878kWh / day)

Not quite the 1:3 ratio I was looking for, but that figure is probably no longer simple to calculate, which I’ll explain below.

From the SolarEdge web portal, I have the following factoids:

  • Lifetime energy: 9.1MWh
  • CO2 emissions saved: ~3400kg
  • Equivalent trees planted: 11
  • Light bulbs powered for a day: ~26,200

That is kind of the feelgood stuff, despite the Powerwall not necessarily being “green” as people might imagine.

As with anything, there is a carbon cost associated with production. The early iterations of any battery product are going to be a little bit on the dirty side.

As one example: Lithium ore needs to be shipped from the mine to the refining facility. The refined lithium is then shipped to the cell production facility, which may or may not need shipping to the final place the Powerwall was built.

Tesla are addressing this with “vertical integration” of production, particularly for their cars, but also batteries in general. This means more processes can be done at one site, reducing shipping costs (and therefore carbon c0st) of transporting components.

Other Factors Considered

Keen observers will remember that in October I got more solar panels. That took my total system size to 6.5kW of panels. I just heard a bunch of critics trumpet “AHA!” but keep in mind, I still only have a 5kW inverter.

Therefore the maximum power I can generate is limited to 5kW, though the peak time lasts a bit longer on a sunny day.

It is hard to quantify what effect this has on the system, beyond saying “there is more solar capacity”. As the new panels are oriented WSW they’re not always going to be ruling the roost in terms of efficiency.

Its also a smaller factor than it otherwise would be, having been installed four months out of the year. Granted, they were the sunnier months.

Another consideration is my move to Time Of Use tariffs in the first week of August. This has an effect on two areas of my billing.

If I’m smart enough to “game” the tariffs, and avoid doing anything during peak time, I can save a lot. Unfortunately peak time coincides with oven and air conditioner use, so that’s not always possible.

The billing and the import numbers above will be affected by Reposit Power managing tariff arbitrage. When I import power now, it might be a result of my needs being bigger than the system output, the battery being empty, or because Reposit sees a cloudy day and wants to import some at a cheaper rate.

Putting together the new panels and move to TOU, a better time to revisit this might be October this year. That way, I’d have a true idea of what I can really save with all components working together.

The Vagaries Of Billing

Those out for a bargain will know to shop around with their electricity companies, and see how best to maximise their savings.

Whether that is through generous sign-up rebates, or big discounts for paying on time or via direct debit. It all adds up, and people without solar or batteries can benefit if they do their research.

As I pay such low amounts anyway, discounts don’t add up to much. Pay-on-time discount across the year was $20, and paying by Direct Debit discount was $17.62.

The bigger benefit was referring people on to Diamond Energy, which netted me $105 across the year. Against that, I paid $22 (inc GST) application fee with Diamond, so the benefit was more like $83.

If we add that $83 back onto the billing, it goes from 50 cents per day to 75 cents per day.

I pay about $1 a day to connect to the electricity network, so its still good. There are even a few dollars in GridCredits unaccounted for at this point.

Year Of The Powerwall

When I say “Year Of The Powerwall” I’m not speaking only to the year I’ve had. This year, 2017, marks the landing of Powerwall version 2 in Australia, and overseas.

I’ll level with you: I haven’t really spoken much about PW2 since the launch, because I’m still experiencing some angst.

Year Of The Powerwall
So hot right now…

I thought I’d done OK with my battery, then in the same year, Tesla brings out one TWICE as good.

C’mon Elon… I thought we were mates!

Overall though, this is a good thing. I think we’re about to see the domestic battery market kick off in 2017, with Tesla in front. That is quite amazing, given the prediction was market maturation in 2020. We’re three years ahead!

Talking to a few people getting quotes and installing them, right now there are very few people price-competitive per kWh.

As the manufacturers in Korea and China start their own uplift via vertical integration, prices are going to keep sliding, and competition increase.

This can only be a good thing for the consumer, for the grid, and for energy security and stability moving forward.

And any consumer who is getting a Powerwall 2: I think a zero electricity bill is well within reach.

If you factored in selling power back to the Grid out of the battery, which I think will replace solar feed-in tariffs eventually, you could even turn a small profit.

As always, user experience may vary. Its up to you to make the most out of your investment.

An Addendum

As I wrote earlier in the month, we have had some heat wave conditions here in Sydney, with outside temperatures getting into the high 40s (120oF). That was kind of insane, but it kicked off some GridCredits for me, which is also a good thing.

As we’re moving toward more extreme weather events, having a flexible and robust grid, with user storage available for emergencies, will be important.

First Anniversary of Powerwall

This week I’ll be celebrating the First Anniversary of the Powerwall’s installation at my house. How time flies!

I’ve been on holiday for a few weeks over summer, and what a summer it has been. In two words: bloody hot.

Sydney has been experiencing some of its warmest weather on record, with temperatures hitting up to 45oC (113oF) and not cooling down below 30oC over night. Distinctly uncomfortable.

So you end up with successions of hot days, but worse: hot nights.

At least it wasn’t peak pricing that day, being a weekend… Small mercies.

In addition to the anniversary, I’m also due to receive a bill from Diamond Energy, which will cover November through to January.

Putting in a guess right now: I’m going to say about $1.20 a day, excluding referrals. Similar to Winter, but with a bit of a discount for better export. That would be a bill of around $110 for the 92 day period.

Changing Seasons

Summer has definitely had an affect on the system, in terms of import requirements. As I mused back in December, summer would require more import, despite having more sunshine to work with.

Part of the reason is electricity consumption; on the whole, I am using more energy due to cooling and things like the pool pump.

The air conditioner is variable, depending on ambient temperature, and required comfort level. Short of replacing the thing, I’m stuck with needing the grid during summer.

The pool pump is fairly static in terms of use. A set number of hours per day, and roughly 1kW consumption, makes it easy to calculate.

How you handle your pool pump usage is up to individual circumstance. My pump has a flow rating of approximately 19,000 Litres per hour, and a pool of 31,000L capacity. I have a cover on it all winter, except for monthly maintenance, and no trees or other debris issues around the pool itself.

Therefore, in winter I’ll run it for around 90 minutes per day which should turn the capacity over about once. With appropriate chemical balancing, that keeps it clean.

In summer, I’ll vary it a little. During summer peak – where we use it a lot – the run will be 6 hours, timed for peak sun. At shoulder times I’ll start to move toward 4 hours, as we’re not using it as much.

The idea is to let the filter work as hard as it needs to, while retaining good chemistry and clarity in the pool.

Capacity and Usability

Happy to report that the Powerwall is still reporting its full 6.4kWh capacity, same as Day 1 of the system.

The extreme heat over summer also didn’t trouble the liquid-cooled unit. The Powerwall is rated to 50oC, unlike many of its competitors, so even an Australian summer can’t dent it.

Unless you’re crazy enough to put the thing outside. In the sun.

Businessman Laptop Desert
“Gee, the PC fan is really working overtime today…”

What I did notice was the rest of the system struggling to get to full capacity. With a total of 6.5kW of panels on the house, I didn’t always reach the 5kW capacity of the inverter.

Part of that is the panels getting hotter than their efficiency peak of 250C, and part of it is the inverter starting to feel a bit of heat stroke. Even in the shade, on the south side of my house, it gets bleeping warm.

Back in October I was hitting some sweet numbers, but the ambient temperatures were down in that 25 degree range. Everything performs better when its cool.

Post-Anniversary Focus

As the year has worn on, I’ve slowly weaned myself off frantic chart analysis. Its a bit of a pragmatic move, as constantly worrying about my ROI was a bit stressful.

While it was important to keep an eye on the system, I’m moving into a stage where I need to look at the future path, not just the past performance.

That means I’ll be presenting more ideas-based blog here, and there is plenty to write about.

Tesla Energy released the Powerwall 2, which I’ve avoided talking about due to extreme jealousy and consumer cognitive dissonance.

Accompanying that is solar rooftop, which I’ll talk about in a future post.

World-shaping events like Brexit and the election of Donald Trump are key political events. They have the potential to shape energy policy for years to come.

There are also ideas I’d like to explore in terms of other energy sources. That will lead into producing educational content that I can distribute, through various media.

I’m also aiming to put up more on my YouTube channel, for which I’d appreciate a “Subscribe” if you’re so inclined. Which I’ll try to fit in around the blog itself, work, family, and running a Rugby Club!

It has been a very interesting journey to get here. It wouldn’t be possible without the generosity of time and patience of the following organisations:

Natural Solar

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neonblackSolar Edge Logo

 

Reducing Climate Change Risks

This is my entry to the Masdar 2017 Engage Global Social Media Competition. The aim is to describe which technology will help reduce climate change, and why.

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.

California Duck Curve showing oversupply / ramp requirement paradox (c) GTM

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.

System Upgrade

If you’ve ever looked at my System Specs page, you’ll see that I’ve got a fair bit of west-facing roof I don’t use. I decided to get an upgrade.

First port of call was Natural Solar, of course.

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.

House Upgrade
Right about… there!

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!

upgrade complete. Now what?

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.

*drum roll*


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.

That was from May, without daylight savings. The curve peaks around midday and is generally uniform. Pretty much what you’d expect. Decent result, too.

Now we throw another 1.5kW of panels on the western side, and add daylight saving to shift the curve to the right by an hour.

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.

Looking Ahead

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.

Powerwall Six Months On

Powerwall Six MonthsI’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.

Item Days Cost Import Export
Total 35 $23.89* 121 322
Average / day $0.68 3.46 9.2

* 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.

SolarEdge Portal

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.

I won’t go into too much detail as you can read about it here. The key data to consider

Item Days Cost Import Export
Total 86 $50.39 244 736
Average / day $0.59 2.84 8.6
Previous bill $0.68 3.46 9.2
Difference -$0.09 -0.62 -0.6

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.

Item Days Cost Import Export
Total 53 $67.25 288 335
Average / day $1.27 5.43 6.3
Previous bill $0.59 2.84 8.6
Difference +$0.68 +2.59 -2.3

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.

Summary

Putting all the information into a table gives a nice summary of the solar with Powerwall six months down the track.

Item Days Cost Import Export
Part 1 35 $23.89 121 322
Part 2 86 $50.39 244 736
Part 3 53 $67.25 288 335
TOTAL 174 $141.53 653 1393
Daily avg $0.81 3.75 8.01

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.

Powerwall Six Months
Not bad for 6th September…

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!

Opportunity Cost Calculations

One of the outcomes of my recent bill were the articles written. Lindsay Handmer over at Gizmodo wrote an interesting piece about opportunity cost.

Opportunity Cost
A blast from the past! Aussie $50 note from 1973-1995

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
  • 15-20% reduction of usage – knowledge gained by SolarEdge and Reposit
  • 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.

Opportunity Cost

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.

Not bad!

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…

I feel your rage, angry penguin... (c) Business Insider (click for page)
I feel your rage, angry penguin… (c) Business Insider

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.

Again, we need to make some assumptions:

  • mortgage interest rate will be 4% ongoing
  • $450 saving on the first quarterly bill extrapolates to $1800 per annum
  • 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.

Year Lost offset Bill Savings Capital Position
0 n/a n/a -$15,990.00
1 -$639.60 $1800 -$14,829.60
2 -$593.18 $1800 -$13,622.78
3 -$544.91 $1800 -$12,367.70
4 -$494.71 $1800 -$11,062.40
5 -$442.50 $1800 -$9,704.90
6 -$388.20 $1800 -$8,293.10
7 -$331.72 $1800 -$6,824.82
8 -$272.99 $1800 -$5,297.81
9 -$211.91 $1800 -$3,709.72
10 -$148.39 $1800 -$2,058.11
11 -$82.32 $1800 -$340.44
12 -$13.62 $1800 $1,445.94

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.

You can’t put a price on that.