Since the early days of rooftop solar, many Australian academics & commentators have warned of a grid death spiral.
Here’s how it was meant to play out:
More homes get solar. Then batteries. They disconnect from the grid. That leaves fewer people paying to maintain it. Prices go up. More people bail. Eventually the last poor sod stuck on-grid gets a bill for thirty grand a quarter just to keep the lights on.
Never happened.
Won’t happen.
Here’s What’s Happening Instead
People are buying massive batteries (typically 20-40kWh) now there’s a rebate, but staying grid-connected. The grid makes their stored solar more valuable – if sold during peak prices via Amber or a good Virtual Power Plant (VPP).
But it’s not all about money – a surprising number of Aussies (43%) value energy security more and want to keep the grid as backup – the best backup they’ll ever get. For a bit over a dollar a day, they get effectively infinite backup capacity, with 99.98%1 uptime, no hardware to maintain, no diesel to pump. Off-grid can’t touch that.
Retaining a grid connection means you can export your stored solar for a tidy profit, although for most Australians the real value is the energy security it offers.
Batteries Don’t Mean Rejecting The Grid
You want resilience? Keep the grid connection.
I’ve been saying this for years. Hopefully with battery quotes going through the roof, the death spiral story can finally die.
Now, about last week’s column , “Make Solar Panels Great Again”. I made the case for taking control of your own bill. Some readers thought I was taking a swing at the grid. Not so. I like the grid. It’s the greatest shared infrastructure Australia has ever built. Buying solar and batteries doesn’t mean rejecting the grid. You can believe in autonomy and believe in the good of the network.
When you add big solar, you reduce the need for midday grid imports. That helps your neighbours. When you oversize your system, you generate more on overcast days, and more early morning and late afternoon – when the grid needs it most.
When you add a battery to the grid, you shave evening peak demand.
When you join a VPP, you help shut down coal faster.
With solar, battery and grid you get lower hardware costs, lower bills, blackout protection, and better returns. The grid gets stronger. Everyone wins.
The Death Spiral Myth Is In A Death Spiral
So let’s bury the death spiral myth. The grid isn’t doomed, it’s more important than ever.
With a well-sized solar and battery system, you’ll have your cake, and help feed the community too.
Phase Shift is a weekly opinion column by SolarQuotes founder Finn Peacock. Subscribe to SolarQuotes’ free newsletter to get it emailed to your inbox each week along with our other home electrification coverage.
Footnotes
- The AEMC Reliability Standard for the National Electricity Market (NEM) is < 0.0006% unserved energy per year. That means 99.9994% supply reliability across the grid. For end-users, actual uptime is typically lower due to distribution faults, but still bloody good: often better than 99.98% in metro areas. ↩
About Finn Peacock
RSS - Posts
Finn says for a $1 a day you get cheap backup from the grid. Some retailers charge over $2 a day from the supply charge. Add that to the Amber subscription and it’s over $1000 PA.
Not too long ago that was my entire energy bill prior to solar.
On top of that factor in the constant battery cycles associated with selling your own produced energy. How long does that take off the life of your battery?
Still not sure about the grid? Need more convincing.
Amber don’t charge a big retailer daily fee. It’s their $20 per month plus a pass through of the distributor charges. For me the total of them is $2 per day.
I might be oversimplifying things in my mind but it seems the role of the grid simply changes. Instead of a distribution network for centralised generation sources it becomes a decentralised “peer-to-peer” network for energy sharing. How to effectively and fairly share and maintain that resource is the primary thing that really needs additional thinking and transformation.
Eventually the problem will be solved by nationalising the grid and taxpayer paying for that, whether you need it or not. Will be worse than Medicare, which supports medical industry that makes sure they perpetuate the problem to which they are a solution and do procedures the way to maximise their profits.
I agree, the whole grid concept needs to be rethought and appropriately managed through the transition to the new norm.
While staying on grid does serve a cheap backup plan at present, we know the electricity costs continue to go up, even though we bought solar and reduced the amount of electricity bought.
SAPN charge both a supply charge (which costs us via the retailer at typically $1.20 per day, and another amount as a part of our kWh usage/demand charges.
Clearly if we enlarge our PV and produce our own electricity and store it in large batteries we will reduce (or hopefully eliminate) the need to buy electricity, which will 1/2 the amount of money that SAPN receive for supplying their service, so ultimately the supply charge will have to double to keep them smiling.
We should plan now for the ability to cut the cord when that happens,…unless we want to keep the grid insurance for $900 per year
Jeez Tim, where are you in SA, and is that for domestic, not commercial ?
I’m concerned seeing demand tariff brought in for residential, it’s primary introduction was to encourage commercial use in non peak times, not gouge households (working families).
I know, if you plan right and spend to have enough PV and battery, you won’t HAVE to use any peak, but as we see, the electricity industry sees more and more ways to make solar alone impossible (in SA particularly) . . .
Increasing daily supply charges, introducing demand tariffs, solar soak penalty, and all these can be raised gradually eroding benefits of solar / battery over time.
People should know even staying on a grid PV / battery setup, the norm for suburban home self sufficiency, you should go big, as big as your roof and budget will allow.
It’s even more important with going off grid, but then you also have to really look at the whole home energy picture more, especially making the home more non power reliant, appliances etc.
Absolutely agree with all of this Finn, and am constantly taken by how many active supporters of solar seem to be in it purely as a survivalist ethic thing, off-gridders with axes to grind.
Are you uneasy at all about the degree of privatisation of the renewables grid we’re building? Both at grid and domestic level, a huge percentage of what’s being done is in private hands. Might that be a longer-term concern for stability, not just in a technical but also energy governance sense? A huge proportion of Australia’s future energy needs will be at the whim of millions of homeowners, and private companies.
Nick,
A good survivalist off-gridder needs to keep his axe ground – to split firewood.
(A block splitter is better, though.)
And a good non-denialist works to increase climate resilience, whether on-grid or off. European countries *now* mandate a minimum of 3 days of household food & water reserves for disaster resilience. That will grow, as they heat at double the global rate.
The incipient democratisation of energy is a threat to both corporate profits
and socialist control. Deplorable as that must seem, it also appears unavoidable, as technology frees us from death by coal addiction.
Communists decry independence of any kind, perhaps, but let us not allow dogma to interfere with ramping up our climate resilience as the need becomes ever more evident.
In times of transformational change, it is the adaptors who thrive.
Nice try Finn 🙂
I understand that your job is to prevent or at least delay that death spiral, and of course the situation is a mixed bag rather than what academics are saying. Having said so, you can’t stop the technological progress. The panels and batteries are becoming cheaper. While those in power made it nearly impossible to buy from a warehouse so that you pay over 100% spread on top, still it makes more sense to subsidise China and parasites than builders of transmission lines that are required for insanely distributed generation. The grid may be reliable until it runs out of money. Generators and wood burners are as reliable (no way to buy coal in this country, LOL). You pay for grid connection every day. With a large system you need generator once in a blue moon.
This country needs a heavy industry to make the grid financially viable. That industry needs a reliable energy supply, plenty of water and relaxed environmental laws. That is not going to happen in near future.
Try over $2 a day supply charge in regional areas along with rates that would that metro consumers don’t believe.
The problem I see, is that the residential customer has been subsidising big industry for so long, paying 10 times the rate for power that big industry does, they are burnt and many would go of grid if they could. But they really can’t.
Off grid reliability for a solar and battery system adds a multiplying factor of 4 (or more) to the cost of residential solar and battery setups by the time you size it correctly, add a back up generator and robust inverter.
One day it might be feasible to go off grid in suburbia, but it isn’t currently.
But if they dont want an exodus from the grid when it does become feasible to do so, they should actually try treating us a little bit better now, instead of using us as cash cows.
Agree that very few battery owners should/will cut off from the grid to save the daily charge. But there will still be more and more people not buying power from the grid and therefore not paying DNSP charges for kWh usage. And so the ones left buying will be the ones paying all the DNSP charges within their kWh charges. I suspect the end game will be higher daily charges or charges applied to FIT so the cost of the grid is shared by all users
Yes that 99.8 % security IS a big deal for around a $ a day PROVIDING it doesn’t go to 4 or 5 $ a day !!
If as you say more people sign up for a VPP ( Amber specifically ), they pay market rate and it can be quite lucrative (so we are lead to believe). If everyone is signed up to Amber, there won’t be so many times when it is lucrative as they are all using their own electricity and the grid won’t be stressed.
On a slight tangent, as I understand it, The ATO don’t regard FIT as income and so is not taxable (for residential users). This also means you can’t offset solar/battery purchase/running costs. This makes sense for now and maybe you should mention this in your wise words. On the other hand, those that rely on Centrelink ( Aged Pension for one, but many others) MUST declare any funds that are credited to bank accounts ( not credited to their bill) as income and may reduce or disqualify them from any benefit. Also worth mentioning – even though you can’t give financial advice.
It is cities and their heavy industry which need a national grid. Just as Melbourne sucks water from the Thompson dam, half a state away, reducing water for city-feeding farming, It needs wind & solar from dispersed locations to survive. Urban households will stay on-grid, lacking a reliable alternative.
Smaller towns can do well with mini-gridded solar, wind, massive batteries, & ToU charging. They will increasingly need to, as HV pylon flattening winds increase above +2°C. A grid connection reduces the initial size of gridscale battery, filling need while battery prices fall. Undergrounding tens of thousands of km of grid may otherwise be essential in 4 or 5 decades.
The grid is good for now. It’ll last as long as it serves needs – and adequately pays for nightly feed-in. It may fragment and shrink city-ward as the longer lines cease to pay. Re-nationalising it would be in the national interest – so very hard to achieve.
We adapt reluctantly, I think. Belatedly.
The grid is one of the most essential services and won’t be allowed to collapse. Solar panels, and to a lesser extent batteries, make it cheaper for those in the right physical and financial situation (I haven’t paid a power bill in over 10 years with a 6kw pv system, an excellent return for me!). Expensive gas and pumped hydro will be increasing needed as back up as coal power stations are retired. The extra cost will mainly affect renters, unit owners and, very importantly, industry. The arguments of government subsidies, hydrogen economy and grid scale, or household, batteries are just spitting into the wind. I wish it wasn’t so but look at Germany for an example.
Yep a daily service charge is cheap backup and a no cost backup if you export enough FiT electricity ( that would be normally curtailed if ‘offgrid’ ) to pay the service charge.
Eventually the electricity service charge will be mandatory regardless whether you are connected to grid or not if present. Just like water and sewage daily charges apply, even if you have a vacant lot.