It Appears Impossible To Save Money With The Queensland Battery Grant

Queensland battery grant - a useless subsidy?

Don’t Rush Into Getting A $3,000 QLD Battery Grant:  It Can Cost You Dearly.

Yesterday a Queenslander asked me for advice.  This is not unusual.  I’m originally from Queensland, so I understand their primitive ways.  I also take care to maintain their respect by never making fun of my home state and only ever saying things about it that are factually true.  Such as the plants want to kill you.

This Queenslander asked me if he should take advantage of his state’s $3,000 battery grant scheme There are only a total of 2,500 packages available so he was wondering if he should get in quick before they run out.  After all, there are 5 million people in the sunshine state, which means there’s only 1 rebate for every 770 households or 0.13% of Queensland homes.

He sent me a quote he had been given for a battery system.  I looked over it and told him that, with optimistic assumptions, after 10 years with this battery system, he will have lost over $3,000.  This is with the grant he assumed would save him money.  While I haven’t checked the prices for every battery system that can receive the rebate, to me it looks as though it is impossible for Queensland households to save money using the battery rebate.

This is simply atrocious.  If my Queensland pal had been a little more impetuous — a little more eager to make sure he got the grant — and bought the battery assuming it would save him him money he would have ended up losing thousands of dollars.  This is a ridiculous situation where tax money is being taken from Queenslanders and used to help Queenslanders lose money.  The battery manufacturer would make a profit and the installer as well, but the person the rebate is supposed to help will be harmed.

Queensland

Here we see Queensland sneakily preparing to stab New Guinea once continental drift picks up.

To be clear, as far as I am aware, the installer did absolutely nothing wrong.  My contact simply asked how much a battery would cost and they gave him a quote without any arm twisting or claims it would save him money.  But people who are looking to save money on electricity bills could easily assume a battery system partly paid for by the Queensland government will do that. The truth is: it will actually lose them money.  It’s not like rooftop solar where you’re almost certain to come out ahead so long as the solar panels aren’t installed upside down1.

I think the problem is so serious that state governments — or the federal government if Labor gets in and offers their $2,000 battery subsidy — should require installers to guarantee households will save money if they install a subsidised battery.  If they can’t give that guarantee then they won’t get the subsidy.  If we are going to use taxpayers’ money to promote batteries the least we can do is make sure they actually save people money.

The Battery System’s High Price

The battery my Queensland pal was considering was an LG Chem RESU6.5.  It has a nominal capacity of 6.5 kilowatt-hours and has a usable storage capacity of 5.9 kilowatt-hours.  Its price — not including the grant — was $7,300.  This is considerably more than its estimated retail price of $5,807 on our battery comparison table, but the price he was quoted includes the cost of installation as well as the cost to the installer of supporting it through its 10 year warranty period.  While you can shop around to try to find a better deal, there is no way you can avoid having to pay a considerable amount for installation.

In addition to the battery, the hybrid inverter required costs perhaps $700 more than an equivalent standard grid tied2 inverter.  He would also have to pay for a power switching box and the hybrid inverter’s electricity meter.  The prices given for these components were:

  • LG Chem RESU6.5  $7,300
  • Estimated extra cost of hybrid inverter ~$700
  • Emergency power supply switching box $300
  • Inverter electricity meter $200
  • TOTAL COST ESTIMATE:  $8,500
  • AFTER $3,000 GRANT:  $5,500

The total installed cost would be around $8,500, which would come to $5,500 after the rebate.

Optimistic Battery Savings

To work out what this battery may save on electricity bills, we need to know what my Queensland contact pays for grid electricity.  Fortunately, he sent me his bill so I can see he’s only paying 24.6 cents per kilowatt-hour with Diamond Energy.  These days that’s not too bad.  His solar feed-in tariff with Diamond Energy will be 12 cents.  Just to keep things simple I’m going to assume these figures won’t change in real terms — that is they’ll simply keep pace with inflation — and I’ll give all the results in today’s money.3

The battery has 5.9 kilowatt-hours of usable storage but my Queensland contact’s household is not going to use that much every night.  The battery’s capacity will slowly deteriorate over time, on some nights they won’t need all the energy in the battery, and during some cloudy days they won’t be able to fully charge it with solar power.  Assuming the battery only deteriorates in capacity half as much as its warranty allows4 and looking at his electricity bill, I’d estimate he’d use an average of 70% or less of its original usable capacity over its 10 year warranty period.  But I’m going to be very optimistic and assume it will actually be 80%.  That’s 4.72 kilowatt-hours a day.

The round trip efficiencies of battery systems are generally disappointing according to reports I’ve been given by owners.  I’m going to use a figure of 85% but it could be less in practice.

So far we have the following figures:

  • Grid electricity price per kilowatt-hour:  24.6 cents
  • Solar feed-in tariff:  12 cents
  • Average storage used per day:  4.72 kilowatt-hours
  • Round trip efficiency:  85%

Each kilowatt-hour of storage he uses from his battery will save him having to pay for 24.6 cents worth of grid electricity, but will cost him the solar feed-in tariff he would have received if the energy used to charge the battery had instead been sent into the grid.  Because the battery system is 85% efficient each kilowatt-hour of storage he uses will need 1.18 kilowatt-hours of solar electricity.  This will cause him to forgo 14.1 cents of solar feed-in tariff.  As a result each kilowatt-hour of storage he uses will only save him 10.5 cents on his electricity bill and his savings over the 10 year warranty period of the battery will only be around $1,800.

  • Savings per kilowatt-hour of storage used:  10.5 cents
  • Daily savings:  49.7 cents
  • Yearly savings:  $181
  • Savings over 10 year warranty period:  $1,810

As the battery will cost him about $5,500, this means after 10 years my Queensland friend will be around $3,700 behind.  This does not take into account the cost of capital, but since the battery grant lets him take out a 10 year interest free loan on the cost of the system we can ignore that.

The battery is likely to last beyond its 10 year warranty period.  But even if it lasts for a total of 15 years without losing any more capacity it will only save him $2,715 on his electricity bills meaning he will have lost around $2,800.  Maybe the battery could last longer than 15 years, but I certainly wouldn’t count on that.

The battery system will provide back-up capability he wouldn’t have with a conventional solar power system.  How much value people put on this will vary, but I would value it at well under $500 as even a very small generator can be a superior form of backup.  This is because there is an excellent chance there will be little energy left in the battery when a blackout occurs.

Installers Should Guarantee Savings For Subsidised Battery Systems

I think a lot of people are going to lose a lot of money as a result of buying government subsidised battery systems.  They’ll either think subsidised batteries will save them money and not do their research, or shonky salespeople will lead them to believe they will save money when it’s not the case.

Government subsidies just makes things easier for con artists as people will assume the subsidy means batteries are a sound investment.  It is definitely in politicians’ interests to do something about this as people are not going to be happy when they see their tax money being used for a scheme that makes many people worse off.  It’s exactly the sort of thing current affairs shows love to bang on about.

To solve this problem I recommend installers be required to guarantee their battery system will save a household money over its warranty period.  If the installer doesn’t want to give this guarantee then the battery system won’t qualify for a subsidy rebate.  This will make sure only households that will benefit will receive help.  If this isn’t done then in many cases we will be spending taxpayers’ money to make Australian families worse off. That’s nuttier than lumpy chocolate.

Footnotes

  1. Which you can avoid by not using shoddy installers.
  2. Tied to the grid so that when the grid stops working so does the inverter.  In other words it can’t supply backup power during a blackout.
  3. I actually expect the price of grid electricity will trend downwards, which will make the economics of batteries worse.  However, solar feed-in tariffs could fall, which would improve the economics of batteries.  Perhaps it will be a wash.
  4. Its warranty only promises that it will retain 60% of its original capacity after 10 years.
About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. This is a really useful analysis.

    Personally, I think this new rebate is great – if you were already planning on installing batteries and taking an economic hit. Maybe you just want to support the development of the technology, maybe you live in an area with regular blackouts and you want a system with backup capability, or maybe you just want a shiny new battery to show off. In any of these cases, the new rebate is great – you can do what you already wanted to for $3k less.

    If you want to install a battery to save money though, the economics still just aren’t there.

    • I hope the Federal govt mandates the install of solar & battery system on all new homes. What is not considered are the environmental costs that is devastating Communities around Australia and globally. China is leading the revolution to electrify yet a rich country like Aust is sitting on the arse

    • Yes Minister says

      For the same money as an LG with pitiful capacity, a person could purchase a 30 odd kw OpZs battery direct from the chinese manufacturer and store sufficient green electrons to run an efficient home all night.

  2. Yes Minister says

    I wasn’t aware of a Queensland government subsidy for solar batteries but will check it out. Personally I don’t believe LG or Tesla batteries are cost-effective but lead acid batteries certainly can make sense if imported from China and the horrendous local reseller markups avoided. No doubt this arrangement falls outside the rebate scheme but it is worth investigating.

    • Jack Watson says

      Well said, Sir Humphey. Again!
      I do wish young Ron would refrain from basing his entire armoury of argument on predetermined assumptions like:- “…will only save him 10.5 cents on his electricity bill …”

      As has been pointed out tme and again (see arithmetic)~ and NEVER refuted ~ a stand-alone system, based on good L/A batteries, which doesn’t diddle about with electricity bills, has been a winner for quite a long time ~ about a decade in my experience ~ already…. and the prices for the components ~ we all agree ~ are diminishing by the day.
      And one can do even better than that by rejigging use of power and/or ‘adding bits’ ~ like a wind-enerator for example.

      Bottom line:- ANYBODY who sells you stuff is making a (ever-increasing) profit, and maintains that profit/growth by making you dependent upon his ‘service’….and maintaining the right to change the rules unilaterally.
      (No…leave my wife out of this!)
      The Taxman operates on the sme basis: feel free to publish a manifesto on the best way to profit from paying taxes…..ANY taxes.

  3. Hi Ronald,

    That is a fair summation of the economics and your friend seems a very economical user if they are using less than 5 kWh at night.

    The opportunity cost of giving up the feed in tariff seems to be the major hurdle to cost effectiveness. Do you have this summation in picture form which I am sure would be easier to digest?

    Also, In your opinion is the Government more motivated by the effect on peak demand of batteries in households than actual savings?

    • Ronald Brakels says

      They would average over 5 kilowatt-hours a night but variation in consumption means they will sometimes use less than that. For example on pleasant spring and autumn days when no heating or cooling is needed or simply when they go on holiday.

      I don’t think there is anything motivating the QLD government other than the — generally incorrect at this time — idea that batteries are green. If they were concerned about relieving pressure on the grid they would target their limited number of grants to the geographical areas where they would do the most good.

  4. Maybe this subsidy is really intended to benefit farmers or others who have off grid installations of solar power.

    If you re run the numbers for a locations that has no grid power and so no feed in tariff and otherwise burns diesel for their night time activity, or is using an array of 12v deep cycle batteries to get power when they can and only use the diesel gen set for when the battries are discharged by say 50% then buying the subsidised battery might be a much better investment.

    This would be many stations and other remote properties in Western QLD and FNQ.

    Maybe it’s just agrarian socialism in action!

    • Erik Christiansen says

      Can’t say whether the Q battery scheme might benefit anyone off-grid, but I have read that the SA battery subsidy is not available to any poor sucker who’s off-grid. ) It’s like the Vic rainwater tank subsidy – if you’re not on town water, you’re SOOL there too. It’s Terra Nullius out there, as far as pollies are concerned.

  5. Allen Georg says

    Ronald
    do/are the same points etc above relevant to the SA battery scheme, I put my name down and was bombarded by a sales pitch phone call from a not very well informed lady.

    I have not taken up with scheme

    Allen Georg

    • Ronald Brakels says

      Because the SA subsidy is up to $6,000 and electricity prices are much higher you are much more likely to come out ahead with the South Australian battery subsidy. However, it is still easy for people who are modest users of electricity to end up losing money:

      https://www.solarquotes.com.au/blog/sa-battery-subsidy-savings/

      More battery systems will be available for subsidy in SA from the first of next month, so hopefully competition will increase the likelihood of battery systems saving money.

  6. Lawrence Coomber says

    Ron well summarised.

    There are some other considerations worth mentioning also:

    1. Battery replacement cost: This is a critical point because as you have pointed out already owners of an initial battery install effectively start losing on their investment from day 1, and steadily moving forward (an approximate linear trend-line) towards the overall loss over 10 years that you have calculated of $3700 . The owner would also be aware of this slow bleed value as he/she progresses with the system. So what would the owners mindset be when confronted with the inevitable battery replacement day? would they continue the guaranteed losing streak and cop the bleeding but now at an elevated rate because the replacement battery would not be subsidised? or simply shrug their shoulders and cough up (for no obvious reason why)? Interesting.

    2. An added complication might be that a battery installation further binds the system owner to their business partnership (by legislation and contract) with the network and their electricity retailer, in a business model setup particularly with the the benefit of the utilities/electricity retailer foremost in mind, rather than the system owner, with the battery being firmly under the management and control of the senior partner in the relationship (the network and electricity retailer). VPP legislation for battery owners might exemplify these points.

    There is a long way to go in unraveling the reality of On Grid battery ownership regarding commercial viability and/or other tangible benefits for system owners over time, and you have spoken clearly and persuasively on this subject many times over the last 2 years Ron.

    I believe that we would all welcome some authoritative and well presented counterpoints on the benefits of battery systems for owners going forward, to those made by the less than convinced commentators on the subject like yourself and me for example.

    PS. I love batteries – I install batteries; but only in Off Grid Solutions that remain under the management and control and for the sole benefit of the system owner.

    Lawrence Coomber

    • Ronald Brakels says

      We can hope that by the time they reach the end of their lifespans in 10+ years batteries will have fallen a long way in price. But as there will be diminishing returns from each additional battery system deciding whether or not to get new batteries may still be a hard choice.

    • Jack Watson says

      ONYER LAWRENCE!

  7. Howard Patrick says

    Not that I am going to do it but it can’t be too hard for persons close to the automotive industry to work out that the cost of battery systems in the likes of the Leaf, Bolt, Kona, Ionic, etc is very unlikely to be more than $300 a Kw.

    Meanwhile you often see figures of much less than $200 being aimed for for batteries out of the mega factories.

    The prices on the likes of Sonnen, Powerwall, BYD, etc, etc ESSs are closer to $1000 so little wonder there is no, or very little, return on investment.

    At about $5,000 for a 10Kw ESS you could really see them take off – but by then distributed community ESSs in shipping type containers with blockchain technology might be the go in this rapidly era of evolving renewable energy technologies.

    • Jack Watson says

      …. and in contrast a Deep Cycle SLA/AGM~type battery with a 3-year warranty and an expected life of twice that will store a kW for well under ONE HUNDRED dollars.
      … and leves you independent of ANYone, and able to juggle your usage/replacement/installation/etc. in whatever circumstances you find yourself.
      …. and when they HAVE come to the end of their life you can recycle them into other situations.

    • Ronald Brakels says

      According to Elon Musk Tesla’s battery cells would now have to be $100 US a kilowatt-hour as that’s what he said they would be by the end of the year. He is a notorious premature predictor but even though this may be an exaggeration they will be close. Other companies have contracted battery cells for electric cars for $140 US a kilowatt-hour. Given these prices it seems clear to me that stationary battery storage will still fall a long way in price.

  8. Great Common sense analysis!

    There have been enough dodgy solar installers who have vanished to the Cayman Islands or Noosa taking their implied warranties with them

    There’s no reason to presume that your battery installer today will be here in 10 years time.

  9. Des Scahill says

    The only ‘bright spot’ in all of this is that at least battery prices are coming down. Ron’s figure of 5 Kwh for overnight consumption is not too far off the mark, but it does seem a tad under-estimated to me. As a two person household, 5 kwh overnight is about the average norm for us, and from my own rough and ready calcs, around 3.0 to 3.5 of that is ‘hot water’ related.

    At a cost of $500 per kwh storage capacity, batteries start to become economically justifiable – in some circumstances – for the ‘average’ home user thats connected to the grid.

    The big issue I see is the ‘replacement’ problem. Assuming you get 10 years out of a battery, then by the time its due to be replaced you might find that what’s then available and the way it interfaces don’t easily fit with your then 10 year old solar PV system and inverter.

    Being personally of ‘low tech’ inclination, a few 12 volt batteries charged by their own independent solar panels that you shove out on the back porch to get a suntan when they get a bit low, and bring back inside to hook up with some alligator clips to a small full sine wave DC to AC inverter when you want to watch TV etc,, would mostly meet my modest needs.

  10. Jack Watson says

    And that only obscures the other factors….Like ghe $165,000 price-tag o tbhe Tesla vehicle they were trying to sell down at the local shopping centre recently. No way was it possible to even look at the working part ~ least of all the battery hidden UNDER the vehicle, which the salesman said would take a mechanic with special (restricted!) tools a couple of days to expose.

    Anyone who’d pay that sort of money for a pig-in-a-poke deserves to cop it where the chook copped the rooster.

  11. Yes Minister says

    The gullible have been sucked into believing the only battery options are Tesla and LG. both at a massively padded price from a greedy Australian reseller. Personally I don’t give a rats as I’ve had a cost-effective battery system for years, and precious few local bandits got a cut. Bottom line is that batteries are definitely worth the effort although one does need to read outside the dotted lines.

  12. Hi Ronald,

    You say:

    “This is a ridiculous situation where tax money is being taken from Queenslanders and used to help Queenslanders lose money. The battery manufacturer would make a profit and the installer as well, but the person the rebate is supposed to help will be harmed.”

    The Queensland rebate is $3,000. Federal Labor is promising a battery subsidy of $2,000 for 100,000 Australian homes, if they win the next election.
    See: https://www.solarquotes.com.au/blog/labor-solar-battery-subsidy/

    Will Federal Labor’s battery subsidy scheme produce similar results – the proposed subsidy harming residents that the subsidy is presumably supposed to help?

    • Ronald Brakels says

      Yes. While not as bad as wanting to use public money to fund new coal power stations I expect a federal battery subsidy will cause problems:

      https://www.solarquotes.com.au/blog/labor-solar-battery-subsidy/

      This is why I suggest any state or federal battery subsidy or rebate require a savings guarantee in order to be received. This agreement need not be draconian but should ensure households will come out ahead assuming a reasonable cost of capital and constant electricity prices and feed-in tariffs. If the ability to join VPPs becomes a thing then that can be taken into account in the guarantee — provided the VPPs are expected to be reliable.

      • Erik Christiansen says

        As batteries can’t save money on-grid, it could be much better societally for subsidised batteries to be offered to consumers on the end of long inefficient Single Wire Earth Return lines. Offload a truckload of panels and batteries, then roll up the SWER line, and you can save a packet on maintenance / refurbishment of old inefficient infrastructure. There’s a couple of stories, with video clips, on the ABC website, showing how that’s been done in WA. I’m not sure that the electricity authority there doesn’t retain the PV & battery infrastructure, and simply use it as a cheaper and more reliable supply alternative, though.

        • Ronald Brakels says

          They have been looking into it for a long time — mostly in WA and QLD for obvious reasons. Here and there they have installed batteries to strengthen the grid, although generally not in people’s homes as far as I am aware.

          • Ergon with their T-FIT Tariff support dispatchable power pricing between 3:00 pm to 9:30 pm at approximately 0.13c per kWh.

  13. Howard Patrick says

    These battery subsidies remind me of the ridiculous FIT that were offered in the early days of rooftop solar that in many cases were too high and for too long.

    PV cost came down with the rapid expansion of the industry but it seem that in the case of batteries the real cost of domestic ESS should be much lower and reflect/relate to the cost of batteries in EVs like the Leaf, Kona, Ioniq, etc.

    • Yes Minister says

      The ‘ridiculous FiT’ is only criticized by those who chose not to partake. Consider for example that it put more PV systems on roofs and thereby put a spanner in the works of the electricity supply racket than anything else. I have no qualms about taking of advantage of bloodsucking political parasites wherever they may be found. Those who object are simply chewing on sour grapes.

      • FIT is usually about the average annualized wholesale price for power. However, as opportunities mature there will be more domestic solar systems trading their exports directly in the wholesale market as well as availing themselves of dispatchable power premium pricing.

        Tariff plans especially those involving Time of Use pricing can be constructed in such a way as to make a plan ‘A’ look better than plan ‘B’. Add a bit here offer a discount their switcharoo on the time interval add in a seasonal demand charge and bingo phucked for the want of an Irish King [where are you, Paul?]

        It’s like buying a car and you want to be able to compare one offer against another. It matters not what the purchase price might be nor does it matter how much you are offered for the trade in the only measure of what might be a good deal comparing one dealer offer with another is the cost to change.

  14. Daniel Debreceny says

    +1

    A few Panels & batteries beyond midway and/or end of long lines will fix supply voltage issues and reduce requirements for upgrades. The panels are a bonus, but battery only will allow the utilities to charge the batteries off-peak (midday?).

    It introduces some additional complexities, but I’d consider these to be less pressing, if the battery systems are correctly slaved.

    • Yes Minister says

      Those whose thinking processes are superior to that of the clowns infesting the various parliament houses need to make their own arrangements. It is often said that the only certain events are death and taxes, but political ineptitude. malpractice, bias and outright corruption should be added to the list.

  15. Howard Patrick says

    There are those of us who can try to think through the broader policy implications of decisions like the one being discussed without resorting to “what’s in it for me”.

    A positive outcome may well be R&D into microgrids based on some of the batteries that wii be installed by the incentive.

    It doesn’t get away from the huge premium presently being paid for ESS.

  16. How about when the battery charges and discharges multiple times per day? It may not be necessary to have a huge PV system for this to occur.

    • Ronald Brakels says

      If a battery is regularly charged and discharged through the day that indicates the solar system is likely to be too small to fully charge the battery on many days. So the battery’s capacity factor is increased in one way and decreased in another. Cheap off-peak electricity could offset this to some extent, but QLD’s time-of-use tariffs aren’t as suitable for this as NSW’s or WA’s.

      • On an intermittently cloudy day, the battery can charge and discharge multiple times, even with reasonably sized PV.

        • Ronald Brakels says

          Definitely. And on those days it will often not have enough stored energy to meet the household’s needs in the evening. This will of course depend on system characteristics and household consumption patterns.

  17. Bruce Rhind says

    From the application pdf, it seems that users of this scheme are allowed go off grid. That saves over $300 per year by removing the daily connection fee, and the cost difference becomes very small. The grid connection fee is usually omitted from these calculations. And it can be significant.

    • Ronald Brakels says

      The battery system will need to be large to allow a household to go off-grid with anything close to the convenience that comes from being on-grid and that is going to be very expensive. Perhaps if a household’s electricity consumption was already extremely low it would be worthwhile but it would be nothing close to the electricity consumption of a normal household.

  18. Michel Colen says

    Ronald

    I’m trying to work out if the savings work for a new solar and battery install work with the Qld gov rebate. A $3k rebate plus $10k /10 year interest free loan for a complete solar and battery system.

    The quote is for a system that includes

    6.50 kW System with 20 x 325w Canadian Solar Panels – (10-year replacement warranty)
    SolarEdge ‘Storedge 5kW Hybrid’ Inverter (12-year replacement warranty)
    LG CHEM RESU 7kWh HV Battery – (10-year replacement warranty)

    Given that I can get it installed for about $3k out of pocket it seems fairly reasonable

    • Ronald Brakels says

      Hi Michel

      First you need to just look at the cost of the battery itself and any associated hardware to avoid the problem of blended payback:

      https://www.solarquotes.com.au/blog/blended-payback/

      I estimated my Queensland contact would only reduce his electricity bills by around $1,810 over the 10 year warranty period of the similar sized battery system he was looking at, so if you are paying more than $2,000 for a battery after the grant is deducted from the cost you are unlikely to save money. If you assume the battery will last 15 years, which I don’t recommend doing, and the battery is $3,000 or more after the grant you are still unlikely to save money.

      But getting solar by itself does pay. A system of around 6.5 is generally a good size for households, but if you want to go larger it can still pay for itself even if you don’t have 3 phase power and need to export limit the system. Paying for a larger solar system, even if it needs to be export limited, is going to be a better investment than a battery.

  19. Peter Faber says

    IN Victoria the utility companies charge for the fact that there is a facility provided outside your house. I am unsure if the electricity utilities operate on this principle, but if so, in going off grid this cost will need to be accounted for.

    • Lawrence Coomber says

      Peter you are wrong.

      Premises with Standalone Generation only (Off Grid) are not customers of any electricity provider, utility, or network; meaning no account is in force. Null; Ziltch; Zero.

      These premises are termed Off Grid.

      There is no such concept in commercial law as a unilateral declared ‘implied customer account’. Period.

      When was the last time you paid an account from an entity that you had no business dealings with? and if so, please see my account attached for your immediate payment Peter, and thank you for paying promptly.

      Now Peter – stop spreading myths leave that up to Elon.

      Lawrence Coomber

      • Ray Havill says

        Hi Lawrence,

        I have often wondered what the position would be if large numbers of people in urban areas decided to disconnect from the grid and go it alone as in an independent off grid system. (The romance of this idea is quite strong , however, the practical realities are less considered.

        Can people simply choose to no longer participate in grid connection and would there have to be new laws introduced to punish or dissuade them form doing so?

        • Lawrence Coomber says

          Ray the simple and concise answer is that the owner of a premises decides if they want to make application to create a commercial contract with an energy provider to connect to the grid. It’s no different to any other commercial transaction concept. And that’s it.

          The second part of your question Ray is a bit troubling though because it tells me that you are a young person yet to fully comprehend the cornerstone principles that apply to successful democratic governance as it has been exercised and emboldened in the past in Australia. Think about that as you and your family strive and go forward and dont endorse or normalise any messing around with it by anybody on a whim.

          The answer then is no.

          Lawrence Coomber

          • Yes Minister says

            Whilst I agree with Lawrence Coomber that there ‘should’ be no contract, in reality all governments are both financially and morally bankrupt. In Queensland at least, all components of the mains electricity racket were government controlled until the uber-despicable Teflon Pete gave away the retain side. The actual wholesale / distribution business is still in government hands (Energex and Ergon) and I believe the government would make use of that arrangement to mandate grid connections (with the attendant fees) where possible. We see another instance of official shenanigans in the ability of Queensland Motorways (supposedly a private company) to access vehicle registration and driver licence details for revenue raising purposes. I suggest that reliance on ‘cornerstone principles that apply to successful democratic governance as it has been exercised and emboldened in the past in Australia’ is misguided as democracy is a total farce in this country.

          • Ray Havill says

            Hi Lawrence,

            Thanks for your response.

            From most I have read in your posts generally I get the impression you know what you are talking about, certainly in relation to electricity supply.

            I may appear young and naive however my direct experiences in life have taught me that beyond the illusion of democracy in action their is reason for concern.

            Putting that aside may I split your sides laughing with another question.

            I get the numerical logic of battery payback and opportunity cost as expoused in this debate. I also understand the propensity of experts to disfavour blending as legitimate in justifying batteries.

            My question is though at what point does finance play a part in objectively assessing worthwhileness or economic sense?

            Businesses often favour cashflow over use of capital. they will lease a building rather than buy it , or lease equipment rather than buy it and in the case of solar they can achieve instant positive cashflow in the short term and greater benefit later. It’s a valid strategy isn’t it?

            For a householder considering the Qld Govt Solar and Battery Grant the same logic could be applied. For the value of the loan and grant $13,000 of “other peoples money” they could get a 6.6kW solar system and a small battery plus maybe a hot water timer. Repayment of the interest free loan over ten yrs is $19.25 per week. Depending on consumption pattern they could comfortable save $40 to $60 per week in electricity ,lets say $50.

            If you spend $20 per week and save $50 per week you make $1500 a year or $15,000 profit in ten years so what is wrong with that?

  20. Yes Minister says

    I can just imagine the state governments protecting their interests in the electricity racket by mandating grid connections (with the attendant rip-offs) wherever grid power is available. Whilst governments might have difficulty with enforcing the use of grid power, the connection fees are already sufficient to keep the power racket afloat and there is no reason the connection fees can’t be further increased.to whatever the clowns in parliament house consider reasonable. Note particularly that the dictionary meaning of ‘reasonable’ doesn’t necessarily apply, for example the Office of the Public Trustee claims its fees are reasonable although anyone who has done business with that criminal organization knows its fees are nothing short of extortionate,

    • Lawrence Coomber says

      Yes Minister you are totally crossed up in your understanding of electricity supply, service connection, and customer suppy contract terminology, as it applies to Australian customers and Australian consumer law. And that is why your conclusions are not factual around these specific subjects.

      I dont think any counter point though would convince you otherwise; you are locked and loaded on your view; and that is OK.

      Despite all that – I enjoy your posts.

      Lawrence Coomber

  21. I got approved for the grant. Went back and forth with a installer. He was ringing me quite regularly, very keen to lock in the deal.
    The whole time I was calculating the savings wrong, until I got a light bulb moment and came up with the same maths as above. Seems so obvious now.
    Mine was even worse…
    With EA 28%, Im paying about 20c a kw for Grid and feeding in at 16.1c per kw.
    I worked out I needed a 10kw LG battery to sustain night time usage. Resulting in a 4c x 10kw (40c) saving on grid electricity /day. thats $146/yr.
    Glad I figured it out. I didnt even bother rejecting the grant, just let it run out…

  22. Lawrence Coomber says

    Thanks Ray for you posting:

    You are reading thoughts into my posts that are simply not there though Ray.

    My contributions to this particular forum were not focused at all on Ron’s subject of the economics of battery installation and payback, they were on a troubling side issue comment made by both you and Yes Minister relating to the possibility that a Government or Government agencies could/would/might or may, act unlawfully and heavy handedly at some time forth, by introducing and levying charges and fees arbitrarily on “non customers” or “non-electricity services and supply account holders”. And that was it in a nutshell.

    So I deviated from the main topic, because you and Yes Minister raised this same point, but in a very troubling way.

    And that demanded a response even though off topic, because it happens to be much more important than the main subject topic. So my few comments stand, and like all other public commentary it is of course subject to scrutiny and evaluation by others, and that is what experienced commentators should always value and encourage.

    Moving back to your posting Ray about the economics of battery installation payback; the simple answer is that not every purchase people make in life is made with the notion of pay-back forefront in their decision making. In fact the opposite is more accurate.

    Affordability or simply sheer desire are greater personal motivating factors than pay-back, and particularly in this modern era of thinking.

    Pay-back may be a metaphor for “good value” though. And “good value” is subjective and means different things to different people.

    Your summary: “If you spend $20 per week and save $50 per week you make $1500 a year or $15,000 profit in ten years so what is wrong with that?” makes a lot of sense to me looking at it from your perspective Ray, so well done and go for it.

    Back to batteries in general: battery technology (especially RE storage) is one of the main features of my professional business life and has been for many years as a manufacturer and power systems engineer, so my decision making and spending motivations around the subject are understandably different to yours Ray.

    But I have (through a combination of self-indulgence and necessity) spent up also; I have a BESS System (Domestic Grid Connected) of 19 kWh; and an Integrated VRLA Battery System (Domestic Off Grid Standalone).

    Off Grid Standalone Battery System payback can be in the initial year of installation though, which is often the case for Off Grid Standalone Installations in fringe of grid situations or where extending the network reticulation is not commercially viable. Much better for Off Grid Standalone system design engineers though is to replace the battery with a pico-hydro generator; but only if the necessary and guaranteed stars line up (at the location) for the system designer engineer to fully exploit.

    But these subjects are best discussed in other topics.

    All the best as you go forward with your energy project Ray.

    Lawrence Coomber

  23. Anthony Nixon says

    I have an Enphase Solar System 10.03 kWh. I import 2,421 kWh Export 7,048 kWh and over limit 1,029 kWh [throttled] per annum. The 2019/20 Tariff 11 0.26027c FIT 0.07842. I have excluded the Time of Use Tariffs 12A and T-FIT from my calculations.

    After the installation of a battery

    Storage 2,421 x 1.20 = 2,905 kWh [round trip value]
    FIT 7,048 + 1,029 – 2,905 kWh = 5,172 kWh

    So my cost after the battery installation would be the kWh value for 12 months seasonally adjusted:

    Import 2,421 x [0.26027c – 0.07842c] = -$440.26 [Nil Billing Value]
    FIT 5,172 x 0.07842c = -$405.59 [Billing Credit]

    Total Cashflow Savings Value per Annum $845.85

    Cost to get in $12,350 [Powerwall II} ROI 6.85% Tax and GST Free Payback 14.6 Years approximately.

    The gross earning capacity of $12,350 CBA FTD 12 Months 1.80% = $222.30 [Taxable].

    So on the basis of cash flow, the battery has the advantage of $623.55 per annum.

    Storage is a home improvement if you like similar to a hot water service, fridge, washing machine, dishwasher, clothes dryer, air conditioning, pool pump and/or heater. All of these items come at a cost to run. We do not budget those utilities on the basis of what their useful life might using the warranty period as the benchmark.

    Storage is about reducing cash flow in today’s value. The real calculation should also include the earning capacity of the $623.55 applied as an additional payment in the reduction of debt outstanding on another account [as the case may be].

  24. Mark Symonds says

    Anthony,
    Interesting calculations.
    My observations is you must be on a terrible electricity plan.
    You dont mention any discount on grid usage and 7c feedin by todays standards is unacceptable.
    In my view your earnings figures are over inflated by the fact you are paying too much for your grid usage and not getting enough for your feedin.
    However this does prove the point that 1 or 2 years ago when discounts and feedins were crap the savings on a battery were more tangible, and made more sense. But I would guess the battery costs were also higher so it probably didn’t make any difference.
    If your not getting grid electricity at a 28% discount which should bring it down to about 20c /kwh, and 16c feedin then you should call your electricity company or change retailers. You can get these rates with EA and Origin.
    But in your case since you have a bigger system (3 phase? 10kwh feedin limit?) then you should be with AGL getting 20c feedin.

    • Anthony Nixon says

      Ergon in FNQ [Cairns] is a Government-owned as is generation and distribution in this part of the world There is no retail competition. The retail price of energy is set by the QLD Competition Authority which goes through an annual process of considering submissions from interested parties public and private before making a determination approved by the minister.

      This year 2019/19 they paid consumers a one-off bonus of $50 plus for subscribing. $50 for a direct debit monthly instead of quarterly and $70 if you register your storage.

      And whilst we are on storage if you are subscribed to a time of use tariff 12A if you export storage power on demand between the hours of 3:00 pm and 9:30 pm the FIT rate is about 0.13c. If you import power in that period the cost per kWh is about 0.68c and the off-peak tariff is about 0.21c the off peak period is applicable to the whole year and hours outside 3:00pm to 9:30pm December through to February inclusive.

      Optimization then becomes for some a bit of a challenge. Ergon allows up to 10kW single phase 11kw to 30 kW three phase. At the moment throttling irrespective of the system is 5 kW per phase.

      I chose not to cost the time of use tariff on the assumption that power would not be imported December through to February between the hours of 3:00pm to 9:30pm which would have delivered a cashflow benefit quite different to the general tariff. For me, the time of use is a gotcha and I would want to prove battery storage performance before jumping into the wild blue yonder.

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