I had a phone call from a mate today asking for advice on buying an off grid solar system for his new house in suburban Melbourne. He was pissed off about paying the daily grid connection charge when his solar system was easily going to produce more power than he used. A typical grid connection charge is about $1 per day.
So what is the extra cost of getting completely off the grid with your solar system in the city compared to a standard grid connect solar system?
Let’s take a 5kW system that would power a mid sized air-conditioned house as an example.
On Grid Cost :
(updated Dec 2014 to reflect current pricing)
5kW of panels $4,000
5kW inverter $2,000
Racking and Cabling: $1000
Installation + overheads + profit: $3,000
Less Solar Rebate (STCs): -$,3500
Out of pocket cost to you approx: $6,500 (Dec 2014 prices)
Off Grid Cost :
5kW of panels: $4,000
5kW Off Grid Capable Inverter + charge controller (e.g. Kaco + Selectronic): $5,500
40kWh of Sonnenschein AGL batteries (good quality German) : $12,000
Racking and Cabling (you’ve gotta wire up and mount all those batteries remember!): $2,000
Installation and commissioning: $3,000
Bottom of the range Integrated Diesel Generator (unless you don’t mind running out of electricity occasionally): $3,000
Less Solar Rebate (STCs): -$,3,500
($19,500 more than the grid connect solar system)
So if my mate is going to go completely
off his head off the grid, he is going to save $1 per day, or $365 per year in grid connection fees.
He’ll also, obviously not have to pay any ‘per kWh’ electricity bills either. That’s $3.50 per day in electricity which is about $1300 per year. So far he is saving $1,665 per year, compared to savings with a plain vanilla grid connect system.
Now let’s take off the annual maintenance and diesel costs – let’s call that $665 per year.
His net savings for going off grid, compared to staying on grid with solar are about $1,000 per year.
But he will paying $19,000 more for the privilege. That makes the simple payback for going off grid 19 years! Or if you factor in an annual estimated 5% electricity price rise, that payback is 14 years.
And at the end of the 14 years he’s probably going to need to replace all those batteries.
My advice to my buddy: Get a grid connect solar system which will typically pay back in 5-6 years.
Please Note: These costs are for going completely off the grid for a typical Aussie home in the city with a turnkey professional design and installation. I’m assuming the homeowner is not electrically savvy and does not want to drastically change the way they use electricity. You can pay less if you have a very energy efficient home and constantly manage your usage, to make sure that you don’t drain the system too much – but let’s be honest – most people don’t want to do this! You’ll see a lot of comments below saying you can do it for a third of the price if you import your own components and DIY the install. That of course is true. I’m assuming you don’t want to do that. I’m assuming you want to pay a professional solar company to take responsibility for the system.
There is also a compromise solution and that is to connect your solar system to the grid, but still have a battery backup. This type of solar system configuration is a lot less expensive than the system described above, because you don’t need the generator or such a fancy inverter, or nearly as many batteries. This kind of hybrid arrangement is also sometimes called “grid-tie with power backup”, “grid failover” or “grid fallback”. I’ll run through the design and costings for these kinds of systems in a future blog post.