Investing In Solar Only Vs. Solar + Batteries – Compare The Pair

Solar panels only or solar power + battery – how do the numbers really stack up? I clearly explain all the maths so you can see the big difference for yourself.

(Transcript)

Let’s start with solar. A 6 kilowatt solar system will produce 24 kilowatt-hours of energy on the average day. So let’s see how much that will save us in the first year.

I pay 36 cents a kilowatt-hour for my electricity. So if I was to self-consume all that solar energy in the first year, I would save:

24 kilowatt-hours
x 36 cents
x 365 days

That equals $3,153.

Now – big caveat – that is assuming 100% self-consumption, which is almost never going to happen. So, that’s the best case savings from solar in the first year.

Worst-case savings from solar in the first year – assuming the solar system’s working properly – is I export all the solar electricity. To do that, I’d have to switch off everything in the house except the solar system and export it all into the grid. I get paid 16 cents a kilowatt-hour. So worst case:

24 kilowatt-hours
x 16 cents a kilowatt-hour
x 365 days

.. equals $1,400 – so the cost of that system is about, for a reasonable system, about $6,000. So, I’ve paid $6,000 for my solar system.

  • I’m getting best-case about $3,100 back in the first year.
  • Worst-case, about $1,400 in the first year.

In reality, the number is going to be somewhere between the two based on how much you self-consume.

Solar Batteries

Now let’s compare that to batteries. Batteries are getting an enormous amount of hype at the moment.

Here’s a tweet from Bill Shorten. Now, I quite like Bill Shorten, but Bill, you’re being seriously misleading about batteries in this tweet; as are many politicians and mainstream media people.

He’s saying that this example here, this lady has saved 75% on her bills. It’s gone from $2,000 to $500 and he’s saying it’s all down to the battery. It’s not. It’s almost all the solar as we’ll see in a second.

So let’s do the math. Powerwall 2 – one of the most popular batteries. It stores 13 and a half kilowatt-hours of solar. How much does storing one kilowatt-hour of solar save us?

Again, I pay 36 cents per kilowatt-hour for my electricity. So if I store my solar in my battery, one kilowatt-hour’s worth, and I use that one kilowatt-hour at night, how much have I saved? When I do this in front of a hundred people, normally 99 people say 36 cents. No, I’ve saved 20 cents and that’s because by storing the solar in the battery, I’ve chosen not to export it to the grid and earn in my case 16 cents.

So, the benefit per kilowatt-hour is:

36 cents
– 16 cents

… equals 20 cents benefit for every kilowatt-hour of electricity I put into it by day and use by night.

So let’s do the math. 13 and a half kilowatt-hours of storage. I’m saving 20 cents a kilowatt-hour:

13.5
x 20 cents
x 365 days a year

… will give me my absolute best case savings for a year from this Tesla Powerwall 2 battery. That’s $985 a year.

Now this battery fully installed, it will cost right now about $16,000 and the warranty on this battery is about 10 years, so the payback is a little bit over 16 years. Absolute best case, but it’s only warranted for 10.

Let’s compare that with solar. Compare the pair:

  • Solar – I spend $6,000 I get between $1,400 and $3,153 per year back. That’s a payback best-case, two years, worst-case, four years, depending on how much I self-consume.
  • Battery – I’m not even going to do worst-case. I’m going to do absolute best-case, which is that you’re draining the battery the full amount every night, it’s not degrading and it’s 100% efficient, which are very, very optimistic assumptions. I’m spending $16,000 I’m getting back, best case, $985 a year. That’s a payback of well over 16 years for spending a lot more money.

So solar is by far a better payback.

Solar + Batteries

Now, what might happen if you are shopping for a battery is the solar salesperson might try to sell you solar and batteries at the same time, and then they will blend together those two paybacks.

If you do the maths and you blend together a 3-year payback and a 16-year payback, the overall payback is eight years for the solar and the battery. The good solar salespeople will say, look, I know it’s eight years together, but that extra $16,000 you’re spending on the battery is actually making the payback much, much worse. You’d actually economically be better off just buying the solar and you’ll save yourself a lot of money as well.

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About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Comments

  1. what this calculation does not take into account – with solar and solar-n-battery some people start spending more electricity when they know its free. it may noticeably change the level of comfort and perceived lifestyle. So, in this case 16k is a tiny investment in comparison what people usually pay for changing perceived lifestyle.

    second point is electric cars – due to economic trend many people will buy electric within next 5 years (yes, its not obvious now, but it is going to happen)
    so if we going to charge at home, adding few dozen kilometers every day after a short ride, it is going to change payback equation as well.

    • This sounds more like and argument to justify a battery you have already purchased, or want to purchase anyway for other reason.

      If thinking of power from the battery as “free” works for you, happy days. I must admit, when I want to I think of power from my solar panels the same way, even though I know it is somewhat flawed logic. The reality is power from the batteries (or solar panels), for most if us is not free (unless you have no solar FiT). Even if you consider the battery purchase price as money down the toilet and you don’t have to somehow recover, to get it “free” from the battery, you still have had to sacrifice your FiT + efficiency losses to charge the battery. If you factor in money to pay back your investment in the battery, you will probably find that your “free electricity” is costing you well north of 50c / kWh, and well more than you would be able to purchase from the grid.

      Re 2nd point of electric cars, that is arguable. It remains to be seen how it all plays out, but certainly with the size of car battery’s, and the expense and limited size of home batteries, there is no place for home batteries today in charging cars from an economic point of view. I recon it is more likely that the car batteries will be the home batteries in the future. They are much bigger, and cheaper anyway (for whatever reason). While this remains the case, it is more likely that electric cars will be plugged in at home and at work, and will sometimes be the battery that powers the grid when prices are high (more demand than can be met from cheap renewables), and sometimes charge when the prices are low (excess solar and wind which is likely to be a regular occurrence in a renewable dominated grid) to give us the best of both worlds.

      But this is about buying batteries today. When battery / EV economics change, we can make a different decision tomorrow. The reality today, is it does not make sense to change your EV from a battery. Is is cheaper just to charge your EV from the grid. Battery prices and solar FiT are too high, and prices of power from the grid too low to make batteries a sensible option for charging the EV. When the changes, it will be a different story, but that is how it is today.

      • I think Finn has done some maths showing that it’s cheaper and better for the environment to charge EV’s from the grid, than from batteries.

        I do love the idea of ‘all our EVs’ being the house batteries in the future though.

        • what Finn is claiming to be very optimistic scenario calculation for batteries – is not so much optimistic.
          he assumes that battery will be drained _once_ per day.
          On practice you can consume x2 of battery capacity from the battery per day. How come?
          Easy : lets assume you 5kw solar producing 30kwh per day and 10kwh battery that can provide 5kw of simultaneous output.
          So, now, if you have a 10kw aircon – it exceeds the capacity of solar but the rest is covered by battery. You can have aircon kicking in several times a day, producing spikes in energy consumption but they will be all covered thanks to the battery.
          If you set your consumption correctly, you can have fully charged battery by the end of daylight AND have used 10kwh from battery already.
          Then after sunset you may use another 10kw from the same battery.
          So, see, you consumed full charge from your battery TWICE today.

          Instead of aircon we can imagine other equipment like pool, spa, EV car strategically consuming large amounts over the day. Lets assume consumption is managed by some careful timer settings or AI.

          With this truly optimistic calculation the payback time can be halved. 8 years of payback is within warranty period.

          • Peter Faber says

            8 year payback? Hmm. In 45 years as an engineer I could never convince any of the money people to spend a cent unless the paybck was LESS than 7 years. However; in the current economic climate with interest rates approaching 1% that argument may have changed the situation as the the interest rates then were at 5-7%.
            Any savvy bean counters outt there??

          • Colin Martin says

            Peter..

            Like you an Engineer for a few more years but I will only work on payback of 5 years or less. Based on Finn’s figures and my current usage we are heading for 4.5 years payback. I also enjoy an allowed feed-in of 10kw.

            In Voctoria we are controlled by postcodes for the battery rebate. Mine hasn’t come to get the rebate of $4,838 and I’m waiting after a full year on my 10kw system to reassess..

            The system has been installed and working for 2 months and we are averaging $215/month savings already. This saving includes $117/month extra pension we received because it was a non-capital expenditure.

            In these 2 months, when sunny, we have enjoyed Solar generation between 7-15am and and 5-30pm with predominately East panels. Also period of 7 hours where our total power usage was cobered by the Solar.. 3 adults 24/7

            So my first monthly bill and AGL, my supplier have increased the rate from 29c to 31.35c, an increase of 8.1%. So my Solar timing was perfect.

            I get 38% discount on usage and will get a futher 127.5% on that for the Pensioner discount. So in the end I’m paying 16.03c per unit. I get 12c feed-in.

            I had to convince my wife, so I have created a Goal Saver ANZ account for the savings and that is giving us1.95% interest and yesterday I reminded her that my hearing aids cost $10,000.

            So we can always massage our numbers and come up with a positive answer. So I’m looking forward to the future battery technology etc.

            All the best.

          • Colin Martin says

            Peter

            The Pensioner discount should read 17.5%, not 127.5%

            I hope the vetting will correct that..

            Colin

  2. As I was forbidden from posting this to the article about whether a household should upgrade from a 1.5kW system, I post this here, as it is kind of related…

    As a while has passed since the article was published, a new version of the question arises; should people with 5kW systems, replace them with 6.6kW systems, thence, a further question arises; is it true that, regardless of the age of an installed inverter, the panels can not be replaced, without also replacing the inverter?

    With an inverter less than six months old, one PV systems retailer has told me that the panels can not be replaced without the inverter also being replaced at the same time, otherwise the STC’s are forfeit.

    As the existing panels are not reputable and have no valid warranty, it seems a bit extortionate that the panels can not be replaced without also replacing the almost brand new inverter.

    • Ronald Brakels says

      Hi Bret

      Presumably your solar system received STCs when it was first installed. Unfortunately, you can’t get new STCs for replacing the panels on a current system. However, if you install a new system — with a new inverter — then the panels can receive STCs.

      I don’t see how it would be worthwhile to replace a 5 kilowatt system with a 6.5 kilowatt one. In some cases it may be worthwhile to expand a 5 kilowatt system to 6.5 kilowatts but that will require space on the roof, compatible panels, and an installer willing to do the work.

  3. @serge
    Simultaneously undermines the feed-in return, and supposed environmental benefits, but $16,000 would buy 44,444kWh, allowing 12kWh/day extra consumption over ten years. The battery, if it lasts that long, will soon shut down once Tesla’s ‘operational limit’ ( defined by an undisclosed BMS limit) is reached. Don’t complain…it’s for “your safety”.

  4. .. equals $1,400 – so the cost of that system is about, for a reasonable system, about $6,000. So, I’ve paid $6,000 for my solar system.

    I’m getting best-case about $3,100 back in the first year.
    Worst-case, about $1,400 in the first year.

    i’m only allowed to feed-in 5kw in South Australia

    • Barry Bates says

      Yes, I also can only feed 5 kw in SA. What I did was oversize the system, and have 13Kw of panels.
      With this system, the calculations do not have to take off the 16c from the 36c grod price. My system runs at 42% most of the time, so self consumption can be considerable and still have the 5Kw to the grid.
      Very pleased with $86 for the winter 3 months power bill.

      • As you point out, being export limited, can help a little with the battery economics if you assume the power used to charge the battery would otherwise be wasted. HOWEVER, I am not aware of a battery system that handles the sensibly yet (even though it would be a relatively simple change in software to implement). Most will just start charging that battery as soon as there is any excess rather than exporting to the grid. Often that just soaks up the power until the battery is full and prevents you exporting even the 5kW you could be exporting at that time, and that is costing you your solar FiT. It is just as bad when the battery is full, because you will now still be throttling your solar to 5kW + household loads just as you did before you had the battery. Under this scenario, you are often charging the battery with power you could get a FiT for, and often wasting power that is export limited, and in this case, you should be taking off the FiT for at least some of the power in the battery.

        What we really need to be able to have the battery do is set a threshold of 5kW and only charge the battery once the export hits 5kW. If you have a big solar system, you can then really get the best of both words. ie you can maximise your solar FiT, and use truly free power to charge the battery which will increase the economics.

        But has anyone seen a battery system that can actually do that yet, but for me it is just another case of the promise of batteries falling far short of the relality??

        By the way, are you saying your battery utilisation is only 42%? If so that is going to hammer any chance of getting an economic return, even if your power you charge the battery with is free.

        • Barry Bates says

          Hi Mathew, no battery but inverter capacity runs at 42% most of the time. As I said above, 13Kw solar, and limited to 5Kw feed in to the grid. I like your senario of setting things to not charge a battery until the 5 Kw feedin level is reached. My system after installation was set to zero export for 6 weeks, awaiting the change over of my smart meter. Self consumtion only. Worked a treat. I have a Fronious smart meter to control the 2 5Kw Fronious inverteres.

  5. Serge,
    I agree with Michael & Ronald. Currently, I have 14Kw on the roof, & it will be paid for in about 4 years. After that, a reasonable return (while the Feed-in tariff is reasonable). We have an Imiev 100% EV as a 2nd car. (Great car: If you have kids who want to drive to school, you know they will be less than 50Kms from home! )
    The EV grid feed debate is an interesting one: even the Imiev has bi-directional Chademo charging available, although it was never used. New cars will have that capability, & will be able to be used to load-level. (so able to supply the grid to reduce the maximum demand: a function that might be more necessary in the future. With the current crop of EVs having reasonable range, & the average driver only using the car for short distance, there is normally unused capacity available without even stressing the battery. Also, if charging is available at the normal day park (at work for instance) there is the possibility of the EV using bi-directional charge discharge there too. So your employer could offer subsidised charging in exchange for peak demand management, a win-win situation for both, with the EV being able to set a minimum depth of discharge so you can get home!. Also your power provider can potentially use the plugged EV for demand balancing as well. (Similar to how Reposit uses power now).
    All the above is fine as long as the EV owner can manage the usage. Perhaps they are giong for a trip on the weekend, so want the battery at 100%: all manageable in the future with AI.
    Personally, I cannot see personal, fixed batteries ever becoming economical. Of course, there will be people who make a choice, but really the EV is a much better economic decision. Any excess power fed to the grid will be either consumed, or used by the grid storage, be it local load & frequency managing batteries, or other storage such as Pumped Hydro.
    I can also see the energy resellers using active load shedding to control peaks: the technology is there now, but needs integration & management. In the future, it will be a part of new house design. So, the reseller can, with the clients permission allow the Air conditioning to be varied: by not enough to cause discomfort, but enough to control the peaks. With super-insul;ated houses, A/C will be far more efficient anyway. Things like pool pumps, & other discretionary loads can easily be managed.

    Personally, I cannot wait for the 3 years that it will take for the coming EVs to come off lease, so allow me to upgrade my vehicle yo a used EV at a reasonable price!

    regards, Doug

  6. And if the $16,000 was to be invested to return say 5% P/A it would earn $800 P/A. If not already at pension age then you could place into your Australian Super fund to avoid being taxed on it.

    And if you borrowed the money for the battery system then it gets even worse.

    I think the question here really is “who and why” is driving the misinformation about batteries the way things currently are.

    • Simple answer:- Those with something to gain. And THAT means somebody else pays for their gain.
      Simple solution- refuse to play their games.

      I have, on other occasions,made the point ~ and demonstrated the arithmetic~ that lateral thinking (and operating outside the square) makes stand-alone solar power MUCH more fiscally feasible compared to ANY of the ‘popular’ must-have systems. It also guarantees that nobody changes the rules/shifts the goalposts on you and makes you alone responsible for your own needs.

      At current prices, and available anywhere, the components (including moder hi-tech lead-acid batteries with 3 or 5 or more years’ warranty can be installed (by YOU, it’s that simple) for down to $800 for a 10 kwh battery-bank. Reputable solar panels are available down to (sometimes) about 20 CENTS per watt ~ but anytime for about 60cpw. (Warrantees vary – but are negotiable..
      Part of the good-news story is that if something DOES go wrong the system is simple enough that anyone can replace a single unit rather than pay some ‘expert’ to replace the whole system.

      And the cherry on the cake is that there is huge scope for innovative owners to increase the financial AND technical/application efficiency of the systems they’ve installed and know intimately.

      • Having lived off grid (because I had to in a previous life), and as some who today has a lead acid battery bank to provide power in blackouts which are frequent in my area, I don’t know if I would ever choose to be off grid if you have a relatively cost effective option to connect to the grid.

        I think some of this might be wishful thinking?? For example, I am really curious see where you can get 10kwh battery bank that will warranty that sort of ACTUAL usage for 3 to 5 years for $800 (because I will change to these batteries when my current batteries are end of life). Sure, you might be able to buy lead acid batteries, for close to that, but I think if you cycled to 100% they would struggle to last those sorts of time frames and the batteries I use don’t have that sort of warranty for that sort of usage. My off grid experience is a while ago, but I am not aware of any changes with lead acid batteries that would fundamentally change the old metrics (but very happy to be corrected if I am missing something). And that tended to be you avoided discharges below 70% because while you could discharge below that, it significantly reduces the life of the battery. So if you wanted 10kWh of usable storage, you have to get 30kWh or so of battery bank. And even then then, they probably will only last a third of the length of lithium ion battery. Then if off grid, you need to size your system for maximum load (kW) and maximum capacity (kWh). This needs to cover peak demand, as well as long periods of time when the sun does not shine. If you are going to try and do this without a generator (because they are noisy and smelly), then you start to need impractically large solar and battery arrays which become very expensive unless you have very meager power requirements or you are happy to make very significant compromises. But the catch 22 of all the “off grid just for economics arguments”, is say you did go to the expense of building this system, the reality is for 90% of the year, you would have significant amounts of excess solar that would likely be wasted if you are off grid. So you get a grid connection, because then you can sell this excess solar back to the grid for cold hard cash to offset your significant capital outlay.

        And that is before we talk about what it takes to do the maintenance to get reasonable lifetimes out of lead acid battery banks. If you don’t maintain your battery bank carefully, you risk 1 bad battery causing conditions that kill the rest of the batteries. Now none of this is rock science, and it is all possible to do, but I recon unless you are doing it for some sort of ideological reason, it is something that most people would prefer to avoid if they could.

        Sure there are places off grid makes sense (ie remote places where grid is not an option, or expense for grid connection is too great). And some people will want to do it for ideological reasons, or they have the technical skills and curiosity to do it, or it is their hobby, or they are planning for the zombie apocalypse, or they have good access to endless supply of to lightly used 2nd hand batteries they can pick up for very little money and all help change the economics. But it think it is likely to be a sensible option of the average Joe Blow is a big stretch indeed.

  7. Unfortunately, battery economics today, is not even as good as what Michael outlines (but totally understand why he chose to keep the message simple and not confuse people with slightly more complex topics). Unfortunately there are lots of other (what look like little) things that all eat away the battery economics to make it a very bad investment for those looking at only economic reasons. eg

    1. efficiency losses. For PW2 that looks to be about 88%. ie 12 % is lost in the charge / discharge cycle. So that means we need to put 1.14kWh into the battery to get 1kWh out. Or in $, Michael would be sacrificing 18.18c of FiT to offset 36c tariff, so ultimately is only saving 17.19c by cycling the battery.

    2. Weather conditions and usage patterns mean that practically noone gets 1 cycle out of the battery a day. Some people with very large solar systems and smaller batteries might get 80-90% average utilisation. But with the relatively large size of the Tesla battery, that is typically much smaller. Based on number reported on a Whirlpool forum of real PW2 owners, it looks like the average is probably closer to 62% utilisation.

    3. by default the usable capacity of the PW2, is probably well short of 13.5kWh for starters. The warranty only warranties 70% of 13.2kWh (not even the 13.5kWh claimed capacity). On top of that, by default there is a reserve (I think 10%) set for “blackout” protection. But in truth, it is very likely that Tesla have set that default reserve to increase the chances of the battery lasting the 37.4kWh warranty (warranty is only 10 years under certain circumstances which will deliver less than 37.4kWh anyway), because deep discharges are known to be a killer of batteries. Sure you can get rid of this reserve and I assume Tesla would still have to honor the warranty if they have not gone broke). However, given blackout protection is 1 of the only tangible reasons to get a battery today, it seems counter productive to eliminate this benefit.

    4. The very nature of lithium ion batteries, is they will decay with usage and time. So a more realistic assumption about battery capacity over the 10 years might be somewhere between 13.2kWh, and 70% of 13.2kWh. My guess might be 11.5kWh might be a more realistic figure.

    5. Most people with a battery will probably be able to benefit from going onto a TOU plan where they pay higher rates in peak times, and lower rates off peak and shoulder. This will almost certainly be a better plan for a battery user, because they will likely be able to go a long way to eliminating peak usage. At 1st pass, this would appear to help battery economics, as you will be offsetting a lot of electricity at more expensive rates. But unfortunately, the reality is for most people, there is not enough peak times (ie peak time is only limied number of hours a day, with no peak on weekends and for some people many months of the year). There is too much time where the battery is either not being used (ie you only discharge into peaks), or is being used to discharge into no economic times. For a lot of people, they will actually be increasing their bills by discharging into off peak times because what they sacrifice in FiT will be less than the saving for getting rid of cheap off peak rates. especially by the time efficiency losses have been accounted for.

    6. I suspect Michael might have electricity tariffs that are more favorable to batteries economics than many other people with 20c difference between solar FiT and electricity tariff. In my case it is only 11c.

    etc.

    Finally, I recon there is even simpler way of looking at it. The Tesla battery is warranted at 37.4MWh. Lets say it costs $15,000 installed. A battery is a disposable item, which decays with usage, unlike a asset which might have value after the warranty expires. Based on this it is a simple calculation that assuming you can use all your 37.4MWh, the cost per kWh of using the battery is 40.1c a kWh. So until your arbitrage between you solar FiT + efficiency losses and grid tariff is about 40c, it is not even worth considering a battery for economic reasons. Ok, may of you will argue, the battery will last longer than the warranty. Ok, lets be generous and assume you are going to get 50% more than the warranted battery life out of the battery. Then the sums are 26.7c. Even this well short of evens Michael’s relatively attractive arbitrage of 17.2c, even before the relatively big gamble on actually getting to use it that much and in fact it actually lasting that long which is doubtful. Now if you can get a stonking big rebate from the government, or the price of the battery falls, these figures change. But you can all do your own calculation.

    Now, I don’t want this to be a battery bashing post. Because I am a big fan of batteries. It is not just about economics. And batteries do have real benefits, even today (blackout protection, if you buy the right battery, and value the benefits of a battery over a generator which probably provides more cost effective protection if you don’t care about the smell, noise, and non UPS fail over times). And as and when we get enough wind and solar in the grid, they will play a vital roll in the transition of our grid, and at that time, there is likely to be changes in regulations and tariffs that might well improve the economics. Added to that, falling prices of batteries (which is slower than most have predicted, and in fact it seem to have stalled for home battery storage prices), will again change the economics. And if and when this happens, it will be beneficial that there is already a sizable deployed battery fleet that has aided the development of batteries into a more mature product, that is more likely to deliver of the promise. Of course a lot of us just like cool tech, and geeky toys, and have the disposable income to justify the expense that will in all likelihood, never be recovered in tariff arbitrage. And it is my belief that there will be enough batteries sold to this sort of person. There is no need to exaggerate the economic benefits and risk selling batteries to the unsuspecting for economic reasons a battery that is never likely to return even the purchase price, much less make a return.

    SQ, keep up the good work, because there is too much media and sales people with exaggerated and misleading claims.

    • Geoffrey Preece says

      I bought 4 of the emphases batteries to add to my system knowing the economics were poor to marginal but I believe in the development of systems in the medium term ultimately increased sustainability. I am hoping for greater renewable generation in a shorter time. Wishful thinking yes.

  8. …….. and IF my auntie had testicles would she be my uncle.

    Instead of doodling around among Wotifs:-
    ” What are the facts? Again and again and again — what are the
    facts? Shun wishful thinking, ignore divine revelation, forget
    what the “the stars foretell,” avoid opinion, care not what the
    neighbors think, never mind the unguessable “verdict of history”
    — what are the facts, and to how many decimal places?
    You pilot always into an unknown future; facts are your
    single clue. Get the facts! ” ~ Lazarus Long.

    Fact:

    He also had it that one should :- ” Always listen to experts. They’ll tell you what can’t be done,and why. Then do it.

  9. Incidentally, I signed up in 2009 and after ‘connection charges’ (overlooked in the above calculations) was making up to about $1400 pa from Origin.
    When the ‘connection charge rose to $1.76 I began ~on principle ~ considering going to a stand-alone system. These days ~ prices being what they are ~ I’d START there.

    From google:The Premium Feed-in Tariff (PFIT) started in late 2009 and closed to new applicants at the end of 2011.The PFIT is linked to the property where the solar panels are installed, so when moving house you cannot take the PFIT with you. But any house which is signed up to the premium scheme will remain eligible until 2024, even if the house is sold and new residents move in.

    • ps… the PFiT they’re talking about is 66 cents per kwh. At the price I decided it was worth (but only just) getting connected ~ despite the absurdly-huge price of other things …like an ‘approved’ Inverter. Then the ‘fees and charges’ began rising insidiously.
      I think the lesson is, given the ‘no free lunch’ principle that you must be prepared to pay for what you use ~ but by any principle you’re obligated to use/pay-for as little as you need.

      Or, as they used to say in the days when money actually had some value (gold!): A penny saved is a penny earned”. That applies not only to cash, but every part of the ‘footprint’ we leave on lifeboat earth.

      • You can get 78c (even 80c) from some retailers. A separate Stand-alone system, in conjunction with an existing Grid-tie system, can result in some good savings. Even more if you are a Concession Card holder (reduced Daily Service charge). Five years to recover your costs, from now.

        I think new ELV rules have made that a “bit” more difficult! Unless you want 24V DC batteries. Solar panel wiring, also slightly more complicated too (strings of one?).

        • who gives the concession holder service charge discount ?

          • Everybody!! Well, those in Victoria. With a Concession Card.

            I don’t know who actually pays the concession, but it’s applied to bill.

            Read here:

            https://services.dhhs.vic.gov.au/service-property-charge-concession

            I thought it was Federal, because of the Health Care Card, but I never looked into it any further, except for finding the link above. I can’t find any info on the Centrelink site. Don’t know about other states.

            It appeared (magically) on our power bill one quarter.

            dRdoS7

  10. Well even though I can’t get a deal anything like that mentioned in the video (who pays 36c a kWh and gets 16c per kWh FiT. In NSW – that’s not me that’s for sure and not most people) I still can’t make a commercial battery pay for itself and the difference between my peak rate and my FiT is substantial.

  11. Would love to see a calculator for adding a battery onto an existing system.

    • Working on it – it is very close…

      • I have put together a battery simulator. You can put in real world, or simulated usage data and solar data. And then you can play with a whole range of inputs including :-
        1. battery sizes, charges and discharge rates and efficiencies (ie simulate pretty much any battery).
        2. adjust reserves kept for backup.
        3. adjust the size of the supporting solar.
        4. change tariff type (ie TOU or fixed), as well as adjust tariff rates. You can adjust TOU times.
        5. rules for the battery discharge / charge (eg decide whether to recharge off peak or not).

        With all of this input, it can show you :-
        1. what you bill work be with or without solar, with or without battery, with TOU or fixed. As well as saving attributable to each of these changes.

        2. shows average peak, off peak and shoulder usage with and without battery and or solar.

        3. average dayly kWh to and from any particular battery as well as utilisation figures.

        4. amount of kWh which would not be covered because of flat battery, as well as the number of hours of usage that could not be covered because of flat battery. Also the number of hours you had to import because the battery did not have enough power to cover usage.

        From here you can quickly see payback times on batteries, what happens to utilisation and payback if you add addition batteries or increase the size of your solar, you can see how much solar and battery you would need to be grid independent (scary answer for most people in the real world) etc etc etc.

        The output is only as good as the input, but if you have existing solar system that can give you solar and usage data you have everything you need to do a very accurate simulation. eg if you have Envoy-S data, you can import that data directly into the tool, but you can probably adapt solar and usage data from other inverters or monitoring tools, or get the raw billing data from your retailer/distributor if you have a smart meter. If not, you can use simulated usage date based on you best guess at usage, and put that together with real world solar figures to simulate a system of any size .

        I would be happy to make this available if there was wider interest, and always intended to publish it when I have a second to make it a little prettier.

        But it is only once you crunch the numbers with tools like this, it quickly educates on some of the counter intuitive things that really undermine battery economics in the real world.

        • Ross Chapman says

          What would also be really useful is a calculator to determine whether TOU metering is cheaper than flat rate metering with a solar + battery setup. Of course it does depend on just when you use the majority of grid-sourced or solar sourced energy, but perhaps after entering all relevant variables, a few different scenarios could be assumed and the different costs shown for TOU vs flat rate be compared.
          I have tried to determine this for my setup but I don’t have a good history of usage due to changes to my supply (1 to 3 phase and retailer changes) yet. However, the differences between the peak and shoulder rates seem so much higher than the flat rate that it doesn’t seem as though going TOU could ever be cheaper!
          Ross

  12. Wolfgang Eddigehausen says

    And then there is my $3000 system fully installed and not ideally positioned as the roof is mainly West, not North. I know that a lot of people’s opinion is that is a no good system because it’s a low price. But watch.
    After 11 months it saved me about $1650 already with a mix of srk consumption and export. That is correct data as I an tracking all down to the kilowatt.
    Payback is below 2 years in this verifiable real-world case.
    Do you think I bother about whether my system lasts more than 5 years? No!

  13. John Felan says

    What your article overlooks is that the battery is charging AND discharging during the day. We have a 6 Kw solar system and a 10 Kw battery. So, on a sunny day where we live, the battery works all day charging and discharging.

    So, for example, our electric 3.6Kw 250 litre HW system has a timer to heat up between 11 am and 2 pm.During this period, on average we will be generating say 4.5Kw. So the solar can cope with hot water heating and standby daytime electricity usage.

    Say at lunch time we also turn the oven on and an air conditioner. Now we have a total demand of 8 Kw. 4.5 is coming from solar. 3 Kw is coming from the battery and 500 watts is coming from the grid. This process could repeat itself a number of times during the day and we may still have a full battery at sundown.

    So the point is that we don’t benefit from only 10 Kw per day from our 10 Kw battery – it could be 24. This is very important for us because we only get 7.8 cents per Kw/hr for feed-in power.

    Also, if the grid goes down (we are in a cyclone zone) and the solar/roof doesn’t blow away we should have some power available.

    • “So the point is that we don’t benefit from only 10 Kw per day from our 10 Kw battery – it could be 24”.

      This might be true in theory though I assume unlikely for a whole range of reason. Even on a single day to get battery utilisation of 240% would seem pretty unlikely, and much less averaging anything like this over the long term. Yes, what you say is true, but in the real world it is more than likely that any benefits you get from this sort of thing, is more than undermined by the fact that there will probably many days were you do not use a full cycle because it is overcast and rainy, and or you have gone away on holidays etc. Especially if you only have 6kW of solar. From what I have seen in real world usage for typical people, the best battery ultilisation I have personally seen myself is only 88% (18kW solar system, and heavy usage which maximises the chance of a full cycle, and charging from off peak which in theory, but not practice increases the chances of getting 2 cycles per day), but the more typical range seems to be between 40% and 80%. Sure there is bound to be people out there that have unusual usage patterns and may see a bit more than that, but suspect anyone getting close to 100% would be pretty rare, even though in theory someone might get more than that. This would include the factors you mention, but also the real world factors that means you don’t get a full charge a day (eg weather and not being their etc).

      Anyway, I assume you can probably can get the stats from your battery management system. In which case, what is the average utilisation you are see over the long term for the battery for “real world usage” (ie divide the total kWh produced by the number of days you have had it installed)? I suspect you might be a little disappointed by the results of this simple calculation if taken over any representative time-frame (eg a year).

    • Hi John,

      Please send us the data that shows your average number of daily cycles over – say a month. Should be easy to download from your monitoring.

      Also you may find this useful:

      http://www.solarquotes.com.au/blog/kw-and-kwh-what-is-the-difference/

      Cheers,

      Finn

    • You make a great point. Also, the amount of charge/dicharge cycles is also greater…not one each day, so that ultimately reduce the life of the battery.

  14. John,
    I am not argueing with the use of your battery, but it would be far cheaper to implement a smart system to turn on the HWS when excess power is available. There are commercial systems available, but The OpenEnergy project in the UK also sells a kit.
    When the HWS is a simple resistance element (in other words not a Heat Pump system), it is easy to divert excess energy to the HWS. The Mk2PV diverter mentioned above actually only sends excess energy, not as a simple time switch.
    Mind you, a simple time switch is quite effective: I have 2 units with 13Kw of solar, & I switch the HWS for 3H/day. The total electricity bill is very low because I have most panels on the West with no overshadowing. (I pay for the power connection, then the tenant pays via the rent, with an energy allocation.)

  15. Hi Michael,
    I did not get how in your example you save only 20c per kwh if using solar+battery. Isn’t it you save 36c because you consume at night that kwh you charged in the battery during the day, as opposed to saving 20c in the case of solar only due to having to pay 36c for the kwh at night after you fed it to the grid for16c during the day? I must be one of those 99 lol

    Regards,
    AAM

    • Let’s do the simple numbers for hypothetical situation for where someone’s solar generates 1kWh in excess of what is needed in the home during the day, and needs 1kWh of power at night. Then let’s look at what happens with and without a battery.

      If you have no battery, during the day, you export that power for 16c for a 16c credit. During the night, you import that 1kWh back, and it costs you 36c. However, you have the 16c credit, so your bill is only 20c.

      Now if you have a battery, instead of exporting the 1kWh, you put it in the battery. But in doing so, you forgo the 16c FiT. At night when you need the 1kWh, you don’t need to import from the grid, as you can get it from the battery. So your bill is zero (no solar FiT because you did not export anything, and no import because the battery supplied the power at night). Of course this ignores the efficiency losses which will mean you will only have about 0.88kWh you can get from the battery, but let’s ignore that for the moment to keep it simple.

      So the difference between having a battery and not having a battery is only 20c. This is because to use the battery, you forgo the FiT you would otherwise get if you did not have a battery and would get paid to export the power. Having a battery does not allow you to “have your cake and eat it”.

      • Thanks a lot Matthew! This makes sense now. I guess my confusion came from the fact that the article was comparing the two savings while I assumed it was computing savings separately referenced to having no solar and/or battery systems.

  16. Ronald – if the 5kW of panels could be replaced with 6.6kW of panels, for about $2000-$2500 (including removal of existing panels), I believe that it is economically feasible, especially with the expected 33% increase in generated power during the non-summer months, during which time, I expect that the proportion of generated power, that would be used rather than exported, would be greater.

    If the prohibition of replacing panels, without concurrently replacing the inverter, comes from the CER, then it simply reinforces the perception that the objective of the CER, is to ensure that the customers get ripped off, especially given that the CER caused the inverter to be replaced, as the CER allowed systems to be installed without valid warranties, which was not discovered until too late.

  17. No-one is mentioning future energy cost.
    My main reason for buying a Powerwall 2 is insurance against future costs and blackouts, getting 3-4 a year here in SE Qld.

    • Blackouts is a good reason to buy a battery if you can justify it.

      “No-one is mentioning future energy cost.”

      To me “future energy cost” is a really bad reason to buy a battery today for a multitude of reason. To me it seems to be the dying gasp of the shonky battery salesman that has realised there is no way you can show a sensible return on investment to a more sophisticated buyer. So share them with the all scary “future energy costs” argument. Probably back it up with a simplified spreadsheet that misses most of the points above, and adds 10% a year price increases to show BIG return on investment. But that is just a slight of hand distraction from the fact that it is not making money today, and misses 1 key point. If it is not a sensible investment today and today’s prices, why would you buy today. Surely better to wait for the price rises, and then buy then buy a battery in the 1st year it actually makes sense to do so. You will probably get a cheaper more reliable, and more feature rich battery then, and have a better chance of having more of the battery life make a positive return on investment.

      But realistically, I have my doubts about big future price increases. I suspect current prices are near the top of what can be sustained, and longer term, my guess is that prices are heading down. Even the pollies with ample power to do something about that are now realising current pricing is unsustainable and is linked to their jobs (but today unfortunately ideological views that mean they are unable to do the real simple things that are likely to deliver cheaper bills, so currently they are still only in ineffective window dressing mode unfortunately). Solar and wind is already cheaper that than even the marginal costs of coal and gas, even existing coal, and way below the price of new coal. Even firmed solar and wind, is looking like it is cheaper today with a cost trajectory that is only 1 way (rapidly down). I hope it will also reduce the cartel power of the large gentailers, to game the pricing (Though the new cartel might be the government and snowy hydro if snowy 2 is enough to kill investment in other pumped hydro that we probably need to provide vast quantities of stored power will will need for the longer periods of bad weather that can impact solar and wind, and batteries are not well suited to providing). Rooftop solar and batteries will also play their part in the price reduction as it is all about supply and demand and the more supply and the less demand because of rooftop solar and batteries. As this happens, and the cartels are broken down and the more the supply and demand and pricing will swing in the right direction.

      But above requires some speculation. For me there is an even simpler reason, home batteries will probably never deliver us a significant ROI, until there is significant changes in thinking about how the grid is managed and people managing the grid start to value and pay us for the value that a distributed battery can provide to the grid in terms of services bast provided with a very distributed resource. But until then, plain and simple, the gentailers, can never let home battery pricing hit the point where it is cheaper than grid electricity, otherwise they are out of business!!!! There is no big conspiracy in that statement, just simple laws of supply and demand. The reality is they will probably always be able to install batteries at scale and at a cheaper price than we can, and that will put a lid on the price of power to us, while still allowing them to make money.

      And that is probably the real economic benefit from those buying batteries today. It is helping to develop the product and capabilities that will ironically force a few hands in the direction they need to go. But best you do it for ideological reasons with a good understanding of the economics, because you are probably not likely to make any ROI on your investment in a battery today.

  18. All great comments and showing a lot of consideration for whether batteries are cost effective.

    At a high level you can’t fault the analysis of Solar Quotes in this article. The only real way to know if batteries are right for you is to use actual power data from your home, looking at your solar generation and grid energy usage to properly size the right battery for your needs.

    Shameless plug time – Our Emberpulse system does this analysis for you along with many other unique features not found anywhere else in the market.

    Visit http://www.emberpulse.com to find out the energy advice we provide to all our customers, whether they have solar or not.

    • Ronald Brakels says

      Hi Domenico

      Working out the best electricity retailer is a nifty feature of the Emberpulse. Does this include retailer plans that are based on wholesale prices such as Amber Electric and Powerclub?

  19. Doug Mason says

    Finn,

    There is a logical inconsistency in your argument: you treat a kWh self-consumed differently from a kWh used from the battery.

    For solar batteries, you reduce your savings per kWh by the value of the FiT. Hence, you calculate your “best case” maximum benefit from batteries as (using your numbers) 13.5 kWh x (36-16) cents x 365 days = $985. In this calculation, you maintain the value of the benefit is the cost of grid electricity LESS the feed-in-tariff.

    To be consistent, you should also reduce the solar self-consumption benefit, because the kWh self-consumed was not exported for the FiT benefit. So your calculation of maximum solar benefit 24 kWh x 36 cents x 365 days = $3153 would then be 24 kWh x (36-16) cents x 365 days = $1752.

    You should explain this inconsistency.

    I am with the notional 99 people at your meetings in maintaining the benefit of using a kWh from your battery is (in your numbers) 36c/kWh, identical to the benefit from solar self-consumption, because that is the benefit of not importing that kWh from the grid. It doesn’t matter whether you use that kWh directly by self-consumption or by storing it in your battery for later use, whenever you use it the savings is 36c/kWh. In your solar batteries calculation, you have doubly penalized the kWh used from the battery: that kWh used from the battery was not exported and therefore did not receive a FiT benefit, which is accounted for in the reduced total FiT for the year.

    • There is no logical inconsistency in Finn’s argument. See my post to in reply to AAM above which might help explain it. Bottom line is someone with a battery, has 2 choices of what to do with a spare 1kWh of solar :-

      1. export it to the grid straight away and get 16c per kWh credit on the bill, which they can then use to offset the power that they buy back later when they need it because there is nothing in the battery and therefore will been to buy back from the grid at night. Under this equasion, any power that is offset by a credit only really costs that person the tariff – the credit they got earlier. eg in Finn/Michaels case, that power is costing them 20c.

      2. put that kWh into the battery. However, when they do that, they do NOT get the solar FiT because it is NOT exported to the grid. But they do get to use that kWh later and therefore do not need to import anything from the grid. You could ague that kWh did not cost you anything.

      But as you can see from the 2 different choices, there is a 20c benefit by using the battery once you have brought it in this case. But note : It is only a 20c benefit, and not the 36c benefit. The only thing that will appear on the bill is the 20c benefit, and not the 36c benefit. That is because you can’t “have your cake and eat it”. If you put it into the battery, you can’t get the FiT.

      As for the treating the solar self consumption the same argument, what you have calculated with your calculation, is the benefit of self consuming the solar rather than exporting it for the FiT. Not the total benefit of the solar which Finn is calculating. But if you want to understand the cost benefit of installing solar, and you are in a position to self consume all of it, that is what you are interested in as Finn has calculated.

      The reason he needs to subtract the solar FiT from the battery calculation, is he is trying to calculate the real incremental saving from having a battery (ie the saving from the battery and not the savings from the battery + solar). Given if you have a battery, you give up your solar FiT for every kWh that goes to the battery, of course this needs to be subtracted from the benefit. The excess solar has a value (ie the FiT), so if you give it up to get something else (ie a kWh at night), that needs to be subtracted from the price benefit.

      If you are not sure of this, think of it another way. Lets for arguments sake say your solar FiT was the same as your electricity tariff (as us true for a lot of people on TOU…and in fact for a lot of people the off peak TOU is less than the solar FiT). And lets keep it simple by ignoring efficiency losses for a minute. Finns calculation will correctly tell you there is NO benefit in using the battery at all (you loose as much in the solar FiT as you gain by not importing at night) making it pointless to wear out the battery. You calculation falsely trick you into thinking it is worthwhile using the battery. But if you are talking about economics, the only thing that matters is your bills, and your bill will not lie because i don’t think you will ever convince the retailers of the merits of your arguments. Think about it even more simply. In Ausgrid NSW areas it is pretty easy to get a plan with high solar FiT than the off peak rate. Under this situation, Finns calculation will correctly tell you, that you are better off to avoid charging from solar, and are better off to charge from off peak (and also correctly show you, you will actually be increasing your bill if you charge from solar, and discharge into off peak as unfortunately many people are doing. This is unfortunately the case in all too many cases where I have been able to show people they can save more money by turning their battery off!!! Your calculation will hide that fact, and to some extent it is a bit hidden in the bill, but is not hidden in the $ and cents that comes out of your wallet.

      Unfortunately, I think part of the logic problem people struggle to get over, is they see the battery as a power source, in the same way solar panels are a power source (ie they generate power). HOWEVER, this is not the case for a battery. It can’t generate any power at all. All it can do is store a limited amount of power, and allow you to use what is left over after efficiency losses later. While we have solar FiT and can get a financial reward from exporting any excess power, power that goes to the battery is not “free” (if it was you would not care if your retailer offered you a solar FiT or not). One day when we have excess solar in the grid, the solar FiT might be very small or even nothing. And this will help with the economics of batteries, because it will allow you to reuse a resource that would otherwise be close to worthless. But today is not that day.

      Finn is consistent in his calculation. He is calculating the TOTAL benefit of solar alone (under 2 different scenarios that might apply, self consumption and no self consumption because these represents the 2 ends of the spectrum), and another calculation that calculates the TOTAL benefit of the battery. This is so people can make rational decisions about each investment in isolation.

      Counter intuitive for some people I know. And further confusion because there is so much media hype that is not justified around batteries. I have posted a lot on this subject, because personally I have had to help 2 vulnerable people out of battery contracts they signed on false the assumption it was going to save them money. They could not afford that mistake. Obviously from the posts here, this is a big and ongoing problem, with lots of people working on bad assumptions about the chances of batteries saving them money. Airing and educating on these issues is the only answer.

      SQ, keep up the good work.

      • Doug Mason says

        Matthew,

        It would have been helpful to have Finn’s response (I guess he is busy and absolutely over this type of discussion, and so am I!) but I will make these comments to your defense of Finn’s methodology.

        You started by saying:
        “There is no logical inconsistency in Finn’s argument. …”
        I have read your lengthy justification, and cannot find where you focus on the logical inconsistency I have pointed out. You talk around the issues at length, and much of your material I agree with (including various lengthy responses above).

        So let me re-state the logical inconsistency: Finn has reduced the maximum battery benefit by the foregone FiT, but he has not reduced the maximum solar self-consumption benefit by the foregone FiT. To be consistent, he should do both.

        • Except that the comparisons come from:

          Having no solar -> getting solar
          Having solar -> getting batteries

          So by getting solar, you’re going from having no FiT (no solar) to saving your full tariff rate (36c/kWh)

          But by adding batteries, you already have a FiT, so you’re only saving the difference between FiT and normal usage tariff.

        • “So let me re-state the logical inconsistency: Finn has reduced the maximum battery benefit by the foregone FiT, but he has not reduced the maximum solar self-consumption benefit by the foregone FiT. To be consistent, he should do both.”

          As Andrew says above.

          When we look at economics of a battery (without confusion it with blended payback) there is assumption we have solar and look at the incremental benefit beyond this for adding a battery. That is because when you put a kWh into the battery, and then use it later to offset your import traffic, you forgo the FiT, so I assume it is straight forward why this has to be subtracted.

          However for solar self consumption (kind of “best case” solar justification), it is comparing the incremental benefit of not having solar (no solar so no need to subtract a FiT you would not have), to adding solar. If we self consume all the power, the FiT does not come into it. So it is only the import tariff you are offsetting that is relevant so no subtracting the FiT. As I said in my original post on this subject, if you subtract the FiT, it is just telling you the incremental benefit of self consuming over exporting for the FiT. This is already kind of in Finns numbers if you look at the difference between “best case” self consume everything and “worst case” export everything. But this is not particularly relevant to Finn’s arguments.

          • Doug Mason says

            Matthew,

            You said:
            “If we self consume all the power, the FiT does not come into it. So it is only the import tariff you are offsetting that is relevant so no subtracting the FiT.”

            Of course! The lights come on! Thank you for the clarification. My “logical inconsistency” was incorrect. My apologies to Flinn and for wasting time/bits on the blog.

        • Put another way and following Andrews simplified approach :-

          Finns article is about comparing the benefits of solar against the benefits of a battery, so his numbers cover all of the follows :-

          Having no solar -> getting solar (100% self consumption..”best case”)
          Having no solar -> getting solar (100% export for FiT…”worst case”)
          Having solar -> getting batteries

          With you calculations you are comparing :-
          Having solar and exporting all of it -> Having solar and consuming all of it.

          But your calculation is completely irrelevant if what you are trying to do is just compare solar returns to battery returns.

    • Except that the comparisons come from:

      Having no solar -> getting solar
      Having solar -> getting batteries

      So by getting solar, you’re going from having no FiT (no solar) to saving your full tariff rate (36c/kWh)

      But by adding batteries, you already have a FiT, so you’re only saving the difference between FiT and normal usage tariff.

  20. We are a part pensioners in this debate and part of a justification would be the pension gain by spending on a non-capital item. I have voiced this elsewhere but we would receive an extra $1,248 per annum on the Aged pension.

    Add that to the savings of $985 on the PW2 and deduct the loss of Term Deposit interest of $312 we finish up with $1,921 savings per annum. Probably an 8 year return for pensioners if they can afford the outlay.

    In Victoria, if my post code comes up in future releases for the Battery rebate of $4,838 I would start off with a PW2 costing $16,000 less $4,438 = $11,162. All of a sudden the return is attractive,

    But this rebate delay fits in with Finn’s suggestion it will be three years before we should consider batteries..

    But as we all know we can manipulate numbers for years, justify a new car and money goes on a depreciating asset..

    So yesterday 10.6 kw system produced 33kw…between 7-00am and 5-30pm on predominately East facing panels. only 3 panels on the North.

    • Wow. If you can really get $1,248 per annum back in the pension because of your particular circumstance, that will help a lot. And if battery economics was a close thing, it might even be enough to tip it over the top. But I fear still not enough to make it worth your while for a lot of people. What Finn put up was kind of a “best case” which is very unlikely to happen for most people. Efficiency losses, utilisation below 1 cycle a day 24 x 7 etc etc will all eat away at that.

      But who knows, if you live in SA with high power prices, and big battery rebates and can get that sort of pension rebate, and are big power users with a big solar system who has a chance of getting closer to 1 full cycle a day to offset premium rates they have no other choice to pay, maybe we are finally finding someone who can get closer to paying off their battery before the warranty expires (though some of these things I suspect are mutually exclusive for the majority of people)??? But lets call it for what it is which sounds like a pretty unique situation that is unlikely to apply to the majority of people.

  21. Wow, how do I get those power prices? I’m in NSW and on the best deal that the comparison websites can find (or that I can find myself). Don;t bother telling me to use a flat rate. You try to get your numbers here.

    I pay 46.63c/kWh peak and 23.56c/kWh shoulder. Feed in is 10.2c/kWh. Redo the equation on those numbers and you get a very different answer, when you consider that most of my consumption is peak and my generating is shoulder, like most working Joe Shmoes out there. Let’s redo your calculation..

    “Benefit per kWh” = 46.63 – 10.2 = $0.3643
    0.36 * 20 * 365 = $2,628

    I generate almost all my solar during shoulder.

    Your best case (use it all myself, though I use hardly any):
    0.2356*24*365 = $2,063

    Your worst case (export it all): 0.102*24*365 = $893.52

    With a battery: 0.3643*13.5*365 = $1,795

    There’s a real world case for you. You like to insinuate people are stupid and can’t calculate benefits but then you use unrealistic figures for your examples. In my case the worst case solar only is $900 / year worse off than the battery, and most people are the same: work all day while their solar generates on a shoulder rate and come home and use it at a peak rate. So, the question becomes whether it’s worth paying the battery back at $16,000, 17 years. Probably not, but a Tesla Powerwall II is not the most economical battery solution.

    But the actual value of solar alone is also a hell of a lot worse than you like to make out: even the $6,000 solar system (my quotes have been more than that) will take 8 years.

    Of course, power prices climb and both analyses forget that you pay interest or lost opportunity value on the money that buys the system and neither are included. The way power prices are climbing (way faster than inflation) both analyses are probably on the pessimistic side.

    • Only problem with this calculation is you will not be paying peak TOU for your whole battery discharge 24x7x365. For a start I don’t know of any distributor who has peak rates on the weekend. Some don’t even do it 12 months of the year (eg Ausgrid in NSW is only 8 months of the year, and not on weekends or public holidays). Also peak rates are only a limited number of hours a day. Most people won’t get a full discharge of a large battery in peak hours, even on the days there are peak rates, and often this means a lot of discharging into shoulder and even off peak rates.

      So you end up either choosing to not discharge in off peak and shoulder times to safe you battery to offset peak charges, in which case you average utilisation dives, and because of that you will not be using enough to get a good payback, or you discharge into the less economically beneficial shoulder and off peak times, in which case you can’t claim 0.3643 * 13.5 * 365.

      I am a big user of electricity, and heavy using it what I thought would be peak times. But was surprised by the time all this is factored in how little was actually against peak times. I have battery setup to not discharge into off peak and instead to charge off peak, because my off peak is less than my solar FiT and so that is the way to get the best return. With a PW2 by real numbers over a full year are averaging :-
      – battery utilization is 74.6%
      – 7.1kWh comes from shoulder
      – 2.8kWh comes from peak.

      I was truly surprised that so little came from the peak times. But the explanation is there is no peak rates on the weekends and public holidays, a lot of the peak times particularly in summer is covered with solar, and peak rates only apply 8 months of the year with Ausgrid. If you are with another distributor with 12 months of peak times, and you are a big user in the evening, your number might be a bit more. But it is probably less than you think because of no peak on the weekend. And if you are discharging into off peak, you numbers will probably be even worse.

  22. That has been said before (getting more than 1 cycle per day). And definitely in theory it might be possible to get more than 1 cycle at day as you outline. But in reality and practice, I have never seen a battery system that got even close to 1 cycles a day as and average. The best I have seen is only 0.88 cycles per day. But it is more typically 0.40 to 0.80 cycles a day for reasonable sized batteries (10kWh or more). I guess if you have a very small battery, and smallist solar, I guess the chances of see greater utilisation do increase a bit. And there are bound to be people that do get a bit better or worse than this. But these cases seem to be outliers rather than typical usage.

    So the theory you outline does not play out in reality in most cases. There is a very simple explanation why this does not play out in reality. If you are seeing this sort of behavior often, it sounds like you would be well advised to consider getting a bigger solar system, which will cover more of your loads, and you get the added benefit of having enough consumption to self consume and get even better payback on the solar. But even ignoring that (eg say you don’t have the roof space), if this is happening for you often, it sounds like your solar is not big. That also means that there will be a LOT more days of the year where overcast conditions will mean you can’t get even 1 cycle out of your battery. And this will hammer your averages from the days you do get more than 1 cycle because of usage patterns.

    Anyway, if you already have a battery, the proof of the pudding will be in the eating. Maybe you do have a very unusual usage pattern, and are the rare person that gets closer to 1 cycle a day or even maybe a bit over. But you should be able to get all of this from you battery management system. Look at the total kWh it has provided and divide by the number of days you have had it. I suspect you might be in for a rude shock about the average utilisation if you think you are getting 2 cycles a day. But whatever it is, it will be interesting to share with the community.

    Raising what is “theoretically possible” or might happen a few days of the year to undermine what is in fact and an overly generous assumption based on averaging 1 cycle a day is probably just going to add to peoples confusion and later disappointment. I am happy to be corrected when I see a bunch of real world batteries getting utilisation figures at or above 1 cycle a day. But from what I am seeing, that is just not happening out in the real world.

    • Doug Mason says

      Matthew,

      I recall a useful graph on battery cycling published maybe a few years ago (probably here in Solar Quotes, possibly by Finn, but I can’t readily locate the article). It showed real-word data of some batteries cycling >1 cycle/day average.

      FWIW (and to offer something positive after my monumental stuff-up earlier today!) I provide some modelled* results for battery cycles of different capacity if added to existing domestic solar:

      Batt. Size: No. of Batt. Cycles/yr, Avg. Batt. Cycles/day, Max. Batt. Cycles/day:

      2.4 kWh: 337 cycles/yr, avg 0.92 cycles/day, max 1.4 cycles/day
      5.0 kWh: 313 cycles/yr, avg 0.86 cycles/day, max 1.4 cycles/day
      10 kWh: 218 cycles/yr, avg 0.60 cycles/day, max 1.3 cycles/day
      13.5 kWh: 169 cycles/yr, avg 0.46 cycles/day, max 1.2 cycles/day

      *: All-electric bungalow, Adelaide hills region, 7 kW PV, 2018 consumption (twin-peak pattern, 2 persons, home-based) = 5686 kWh = avg 15.6 kWh/day, 2018 production = 9614 kWh = average 26.3 kWh/day, Enphase measured hourly production and consumption.
      Modelling modified from Chris Cooper, 7 May 2015 http://reneweconomy.com.au/2015/what-the-tesla-powerwall-battery-means-for-households-61055

      • Doug,

        If you are interested, I can give you an email address, and if you send me you you “Monthly Net Energy” Report from enlighten (I assume you have an Envoy-S which does production and consumption monitoring). This will provide your consumption and solar production in 15 minute increments. I can drop that straight into my battery simulator, and it will tell you pretty much exactly all sorts of information about any battery/tariff scenario you want to outline based on your actual usage patterns, and not just generic estimate as the RE spreadsheet does.

        Analysis using hard data is worth way more than speculation and will uncover the truth for those who wish to look.

        As for anything analytical to support the idea that you are likely to get averages of more than 1 cycle a day, I have seen plenty of loose and theoretical speculation, but absolutely nothing in practice to back it up. All practical data I have seen points to averages of well short of 1 cycle per day, even doing TOU shifting which covers a couple of peaks. Sure, it is quite likely on particular day and with particular usage that you might see more than 1 cycle per day (as outlined by posters here, but also doing TOU shifting etc). But as your modeling above shows, this all but disappears once it is averaged out with all of the other factors that pull the utilisation down. Again, I could be wrong, and there are obviously lots of people here with batteries, but still not 1 that can show us the hard data demonstrating that they are getting more than 1 cycle a day over the longer term.

        The only thing remotely tangible that I can ever remember with anyone claiming it was likely to get closer to averages of 1 cycle per day, was I think from Reposit Power. I am working from memory now (I just looked and could not find any evidence of this on their current site that i could see from a quick look), but I think they claimed that by adding their box with smart demand and solar forecasting + grid credits, they hoped to increase typical battery utilisation from typical utilisations below 80% to potentially get up over 1 cycle per day. However, when I and others pushed them to give some details about their claims, they seemed loathed to offer up any data to support any of their claims. Usually hiding behind “every bodies circumstances are different” (in which case why make the claims in the 1st place). And given some of their other claims at the time seemed way too good to be true, it is very suspicious that these claims came from someone getting a bit over excited. Since then, they seemed to have toned down the claims. Claims today seems to be more around people with reposit paying low power bills. But that does not say much because people with reposit also have spent lots of money on solar and batteries so of course they have low power bills than people without solar and batteries. So I think you can take those claims with a pinch of salt. But with what they are doing, it is not hard to see why someone might think you could get more than 1 cycle per day. If they can forecast and charge from off peak, and effectively try to offset 2 peak periods, and if all the battery could be used in both these periods on more days than not, the average cycles would indeed go up. Added to that, they have the grid credits (think of it like a VPP). Potentially this can mean that in “grid credit events” you can sell all your power to the grid and then shortly after buy it back at a cheaper price and make a little profit on this activity. In theory this could happen multiple times a day, and you might then get many “cycles in 1 day” theoretically limited only by the charge/discharge rate of the battery. In theory with a PW2, you could get 4 cycles a day (6 hours per cycle with 3 hours to fully charge and 3 hours to fully discharge) as this can happen day and night in theory. Again, if this happened regularly, average cycles would indeed go up. BUT the reality of all this, is that the grid events, and/or amount of power you actually use in the double peak is just not enough to make a significant contribution to offset the 100 or so days you can’t get enough power to fill your battery etc. Tesla and Reposit would no doubt know this. If what I say is not true, where is the single piece of hard data to prove more than 1 cycle per day is likely outcome for people.

        People like Reposit power, and Tesla would be in a very good position to see every-bodies real world numbers, so they would have a VERY good idea of typical average cycles per day statistically across a wide group of users. Tesla would have the data from literally tens of thousands of users. They would absolutely know if there are people out there who could actually save enough to pay for a battery. If they had something spectacular to boast about to help sell batteries, I am sure they would tell us. But notice there is complete silence on this front unless you know where to look. BUT WHEN YOU READ BETWEEN THE LINES, TESLA HAVE PRETTY MUCH TOLD US IN WRITTING that they only expect people to do less than 0.8 cycles per day with solar shifting and even TOU shifting. It is just most of us have not picked up on it. And that is in their warranty document. In the beginning, Tesla’s warranty was 10 years only if you do solar self consumption only. Outside of that, it was limited to only 37.4MWh total battery usage. They even precluded people who do TOU shifting from the 10 year warranty. Notice 37.4MWh would actually represent 0.75% utilisation over 10 years. I think this is no coincidence. I think the truth of it is Tesla are happy to stand behind their product for 37.4MWh or up to ten years or whatever comes 1st, but not beyond that. But they had clearly done their homework and were confident no-one doing only solar self consumption was likely to use more than 37.4MWh in 10 years (because utilisation was only likely to max out at 0.75). So giving a 10 year warranty to a bunch of people who might or might not incorrectly think they would do more than 1 cycle a year was a free kick for them and a very attractive sale proposition to help sell batteries and build confidence for very little risk to them. But I recently noticed another interesting thing about Tesla’s warranty that I believe further supports the fact that even people doing TOU shifting are are probably still not doing much more than 0.75 cycle per day. Clearly in the beginning, they wanted to preclude people who were doing TOU shifting. ie potentially charging from off peak to offset peak periods. They were only entitled to the 37.4MWh warranty. I assume this was because Tesla was worried that people might be doing more than 0,.75 cycles per day to cover the 2 “peaks”. But since they have implementation that in software, and have had ample time to look at the real world data, they have actually changed their warranty. Now the 10 year warranty covers you for TOU shifting as well!!! Now you might argue that this is because with more data, they are confident the battery can do more than 37.4MWh, and so happy to cover the TOU shifting that might lift the average utilisation and thus blow the 37.4MWh before the warranty expires. But that is unlikely, because while they have slightly lifted the 37.4MWh limitation to 37.8MHw limitation for things that are outside solar self consumption and TOU shifting and backup, the warranty still limits anything beyond that. So clearly they still not confident to bet on their battery beyond 37.8MWh. So I believe any 10 year warranty they offer is only on the basis they are confident those users are unlikely to use more than 37.8MWh (ie 0.75 utilisation). So I believe they are seeing the same thing I am seeing and that is even with TOU shifting, people are still not averaging significantly more than 0.75 cycle per day!! Notice they still preclude various things from the ten year warranty, and for those things you only get 37.8MWh. Those things would likely be using the battery in a VPP or something that might actually lift average number of cycles to the point they might be concerned about the 10 year warranty and placing the 37.8MWh limit gives them that get out of goal free card.

        Anyway, Tesla and others are probably in the ideal position. Batteries and Elon Musk have captured the attention of the market. They don’t have to put any exaggerated claims in writing (apart from watering down or ignoring some of Elon’s more fanciful boasts). They have a whole army of excited fans, sales people and lazy media and pollies they are more than prepared to put 1 and 1 together and come up with 11. This makes batteries look like the miracle product to save us from growing power bills and deliver real savings. So there are enough people claiming all sorts of things (like batteries save you money). Tesla and others can they can get on with selling batteries with no risk of comeback because it is others and not them making the exaggerated claims. Case in point, show me anywhere where Tesla or other major battery manufacturer claims you will actually save money from the battery (sure you will find battery sales people who verbally might get a bit over excited, but as near as I can tell, not 1 from a big sophisticated battery company that is actually in writing)??? Tesla would have all the data to very quickly analyse how many people could be saving money, or if in fact there is anyone with any chance of saving money. I suspect they know very well there is almost no chance that will happen today, so best for them to say nothing and let others do the argument for them. So they don’t claim it, because if they did they would expose themselves to a bunch of refunds for batteries that will never make a return. But the truth is, they don’t have to make those claims, because so many in the industry, the media, the politicians and even the consumers and more than prepared to go out on that limb and make the claim for them.

        Is there anyone out there who believes there is better savings in batteries than installing solar in Australia?? If not, ask yourself why there is so much hype about batteries saving money, and so little hype about solar saving money. Surely if the hype was in proportion to the benefit, there would be more solar sold and less batteries delivering consumers much better bang for the $.

        Tesla and other battery manufacturers reading these forums must laugh when the read all these claims and speculations on these forums. Notice they never appear here and show us the data that demonstrates the cost justification for a single user who can get a semi reasonable ROI on a battery. Surely if it exists, it would help them sell more batteries to show us the case studies on the underlying numbers that support that. Have you ever asked yourself why Tesla or other stakeholder has not released a single detailed case study showing an end user who has been able to make a good ROI on a battery purchase?? The case for batteries saving money seems to come entirely battery sales people, the media and politicians who can’t seem to show any detailed data to substantiated their claims or consumers who have done cost justification based on assumptions that just don’t play out in reality (or can’t tell you the assumptions or the full set of data that justifies their claim). Notice how people with batteries will point point to flaws in Finns assumptions that generously assumes 1 cycle per day from the battery and point out how you can in theory get more than 1 cycles from the battery. But when asked to show their own long term numbers to prove their point, this is not provided even though they would almost certainly have assess to those numbers if they wanted to provide it.

        I might sound a bit against batteries (but I am not). I really am interested in finding anyone who has or could really save money with a battery. I am sure sooner or later it will happen. And there might even be someone out there whose unique circumstances will give them a saving today in which case, I would love to see this brought to light. But as near as I can see, that day is not today in Australia (probably not even close for the vast majority of people). Potential buyers should be aware of this before they throw money into a battery that will probably never pay back. Lets be realistic, and encourage battery manufacturers to deliver products at a price point that can deliver on that promise. Lets not continue to give them a free kick selling batteries to people who think they will make a return, but are never likely to make that return.

  23. Totally agree about weekends a public holidays. I was trying to point out that tge Caculations SolarQuotes uses are based on numbers as fanciful as those tpof the average Joes that they like to sneer at so much.

    • Ronald Brakels says

      I generally don’t sneer. It takes too much effort as I have a very stiff upper lip. Instead I rely on the truth. Here’s an article I wrote that goes into detail on time-of-use tariffs and why they won’t allow batteries to pay for themselves for normal families:

      https://www.solarquotes.com.au/blog/batteries-time-of-use-tariffs/

    • I am not sure what your concern about Finns numbers are? Is it you think his tariff are too low, and not helping the battery justification, or too high (which helps the battery justification because his tariffs are almost certainly higher than in NSW)? In any case, battery justification is not so much about just the import tariff, but the spread between solar FiT and import tariff (ie what you are arbitraging). In Finns case that is 20c. Now you are on TOU and that brings higher peak rates than Finns fixed rate. And if you assume you only discharge into peak, that would appear to be a bigger spread that will help battery justification. But that is unlikely to be the case, and I assume much more likely you discharging into peak, shoulder and off peak, so we need to blend those rates and I suspect your average rates you are offsetting likely to be below 36c. Lets assume you don’t discharge into off peak, because in a lot of cases, it will just not be sensible to do that from an economic point of view, and lets say you have a 50/50 split between peak and shoulder (probably generous, and suspect that most people will not get this much in peak). Average prices you are paying under this assumption is 35c. Now you don’t get Finns 16c FiT, so your “spread” is 24.8c (though you might be advised to look for somebody who will give you more than 10.2c as that looks on the low end for NSW and that can probably save you more money). Sure this is a little better for battery payback than Finns 20c, but it is in the ballpark.

      Everyone will have different prices. I assume Finn is in SA where prices are a bit expensive and in truth, battery economics are probably better in SA than NSW. In NSW for fixed rate, you should be able to get prices well below that pretty much everywhere. From a quick look, 25c – 27c should be easily achievable depending on the distributor, and that is on plans with reasonable solar FiT of 12.5c (which will probably be important to to give you the best rate overall). So in fact, there is probably less room for savings with a battery in NSW than SA if you are always looking for the cheapest plan, and don’t settle for one of the more expensive one.

      TOU does change things a little, and maybe you could argue that Finn should do the numbers with TOU. But truth is that is pretty complicated and would require a lot more assumptions that may or may not upset people. There will never be 1 size fits all because TOU rates and times are different everywhere. Finally, most people would not have a clue how much their battery is discharging in peak, shoulder and off peak, unless you specifically collect and analyse the data, which in a lot of cases is not trivial. But having done exactly that for a number of people, the amount of discharge in peak tends to be WAY below what people instinctively think. And from what I have looked at TOU does help the economics of a battery. But not anywhere near enough to change the economics in any meaningful way,

      I have a battery simulator, which easily enables me to crunch real world solar and usage data to come up with accurate estimates of bills and savings. From this, here are my costs and savings for the last 12 months (big electricity user averaging around 50kWh a day in Ausgrid NSW area, with peak usage somewhat aligning with peak TOU, big 18kWh solar system which will help batteries be economical etc) :-
      – $4794 bill (no solar, no battery, fixed rate)
      – $3,887 bill (no solar, no battery – TOU)
      – $102.07 bill (Solar, no battery – TOU)
      – -$319 credit bill (solar, 1 PW2 battery – TOU (yes, that is a minus)

      From this you can see the incremental savings from various measures :-
      1. going to TOU even before solar saved me $907 pa
      2. adding solar saves me an additional $3785 a year.
      3. so basically by moving to TOU and getting a big solar system, I am saving $4600pa and getting pretty much zero electricity bill for the year, and this is with NO battery.
      4. adding a Tesla PW2 only saves me an additional $421 a year. You can see from this it is NEVER going to pay back $15k battery investment.

      Other interesting things from my setup :-
      1. Best economics (outlined above), comes from charging in off peak (and therefore not discharging off peak). This is because of off peak rate is less that my solar FiT. I discharge into peak and shoulder.
      2. I only get 74.6% utilisation of the battery, because I don’t discharge in off peak because it would be costing money, and solar covers the rest of the peak and shoulder time.
      3. if I don’t charge off peak, my battery savings drops to $346 pa, but my ulilisations goes to 87.7%. So classic case of higher utilisations does not mean better battery savings. Effectively I will be paying money to wear my battery out faster.
      4. My battery averages 7.1kWh per day from shoulder, and only 2.8kWh from peak with real world usage. Obviously this really hammers any real chance of getting decent battery savings.

      Bottom line battery savings tend to be way less than what people would expect including myself until you actually crunch the real numbers. There is not 1 sized fits all because of different tariffs, TOU times, usage patterns, solar and battery sizing etc etc etc. So this makes it impossible to make definitive statements. I thought my usage patterns would delivery me more battery savings than the average person, and this is probably reasonably true. But there is bound to be people with the exact right conditions to get better savings that me. But what I can say, I can’t see anywhere in Australia, where a typical person has much chance at all of getting a reasonable payback on a battery in a reasonable time frame despite the promise and the hype.

      I have run this tool over multiple peoples figures who were sure they were saving heaps of money with the battery, and shown them the reality is way short of the expectation once the real world factors are factored in.

      But there are lots of people out there with batteries, many of them convinced of the savings they are making. And the proof of the pudding is in the eating. And these people should be able to with extract the real numbers to support their arguments if it is real (eg if you think you can get more than 1 cycle a day, so us the numbers, if you think you are always offsetting peak, show us the numbers). So why don’t you share with us the numbers that clearly demonstrate the savings. But if you do that for peoples education and knowledge it is important that the numbers are not cherry picked with important details that undermine the economics left out. I would love to be proven wrong, but I suspect if we go through that, there will not be 1 regular grid connected person in Australia currently who can demonstrate a real ROI on an off the shelf commercially available battery without a significant subsidy (I am not talking about someone who has a free supply of 2nd hand batteries they they have the knowledge and patience to cobble together a workable solution for little money that does not apply to the majority of us). To me it looks like the conditions that are required to make them viable don’t appear to exist yet as near as I have been able to tell. Again, I am not talking about savings from blended paybacks, change of habits, reducing usage, changing to a more cost effective provider, needs speculation about future energy prices rises to make it work, or use assumptions that are not backed with with real life evidence (eg assume more than 1 cycle per day, 100% efficiency, ignore the fact that the sun does not always shine, or that you will be able to cycle everything at peak rates and at high average battery utilisations, or that the battery will last forever with no performance degradation) etc etc. Just savings that can only come from the battery under conditions that are seen in the wider market place. Again, would be really happy to be proven wrong. Come on everybody, if there is a unicorn out there, lets see if we can find it.

  24. Dr Arthur Chesterfield-Evans says

    Hmm. I have just stumbled across this discussion. In NSW I am not sure how relevant it is as our feed in tariff is 12c and our electricity is charged at 48c at peak times, so there is a lot more money to be made. The key problem is the high cost of connection to the grid. Also, Tesla batteries only last a few years. What about flow batteries?

  25. Over the 2 years of Solar-only we’ve had, our electricity bill was around $500… that’s well under $1 per day… ironically, that’s what our connection charge was at. How can I ever justify putting in a battery when the actual payoff point is around 40 years…

    Overall, my W-N 6.6kW panels and 5kW inverter will pay itself off and pay off the next upgrade before they’re done. Better than any battery could achieve.

  26. Can I please point out that the comparison is flawed?
    1. SOLAR only calculations are for a 24kwh solar system
    2. SOLAR + BATT is for only a 13.5 kwh battery
    – The savings should be a full 36c per kwh on the battery (Assuming the impossible 100% efficiency), not 36-16c. Why? Because you are calculating the energy that you did not have to pay for! The 20c savings is ridiculous, it’s like saying for a Solar Only system, you are missing out on FiT because you fully self consumed!
    – What happened to the other 10.5kwh generated by the equivalent 24kwh solar system? This needs to be taken into account, whether self consumed or exported.

    • I think you have misunderstood the comparison Finn is trying to make. It is not comparing “Solar” only to “Solar + Battery” as you put in your comment. What Finn is comparing is the saving from :-
      1. Solar only,
      2. The incremental savings from a battery alone if you add a battery to your solar system.

      Ie to help you understand what savings (if any) can be achieved from purchasing a battery.

      Saving from “Solar + Batt” is what is called “blended payback”. Unfortunately “blended payback” is one of the tricks that dodgy battery sales people and other use to make a case that seems to show that batteries can save money. Unfortunately at current prices, this is not the case for most people in Australia (who don’t benefit from a massive government subsidy that pays for most of the cost of the battery and have exactly the right usage patterns). Basically for most people the reality is that the vast majority of the savings come from the solar system, and in most cases the battery will actually never even pay back the original investment before the warranty runs out.

      So Finn is wanting to help people decide if adding a battery to a solar system is worth it, or whether they are financially better of not to have the battery as will likely be the case for just about everyone outside of SA, and even a lot of people in SA.

      So once you understand Finn is calculating the savings from battery alone, I think it will answer most of your concerns about his calculations if you carefully reread/listen with this in mind. But specifically :-

      1. the “Battery Only” calculation is 36-16c = 20c, because to charge your battery, you have to forgo the FiT which you would have had if you did not have the battery. You might not have to pay for solar that you charge the battery with, but you will have to for go the solar FiT and that is real $ and c that you will miss out on, and that needs to be accounted for. You can’t do sensible “Battery only” cost justification and only include the savings without the costs (or real forgone savings as in the case of the forgone FiT to charge the battery).

      2. “What happened to the other 10.5kwh generated by the equivalent 24kwh solar system? This needs to be taken into account, whether self consumed or exported.” – This saving is attributable to the solar and not the battery. Once you understand that Finn is only calculating the incremental cost savings from the battery purchase, and not doing a blended payback, I assume this will answer your question.

      I hope this helps.

      • Let me show you, from my perspective, what the calculations should look like:

        Assumptions
        – Solar generates 24kwh a day

        ———-
        SOLAR ONLY – FULL SELF CONSUME
        – Savings come from not having to pay 36c per kwh
        24kwh x 36c x 365 days

        = $3153 savings

        ———-
        SOLAR ONLY – 100% EXPORT
        – Savings come from supply charge, minus FiT (let’s go with the same 16c example)
        24kwh x 16c x 365 days

        = $1401 savings

        ———————————————————-
        SOLAR + BATTERY – FULL SELF CONSUME
        – Saving comes from FULL BATTERY CONSUMPTION (not having to pay 36c per kwh)
        – Remaining Solar is fully consumed (not FiT)
        BATTERY STORES 13.5
        13.5 kwh x 36c x 365 days

        = $1773 savings
        EXCESS GETS FULLY CONSUMED 10.5
        10.5kwh x 36c x 365 days

        = $1379
        TOTAL SAVINGS = $3153
         SAME AS FULL SOLAR ONLY – FULL SELF CONSUME

        ———-
        SOLAR + BATTERY – 100% EXPORT EXCESS
        – Saving comes from FULL BATTERY CONSUMPTION (not having to pay 36c per kwh)
        – Remaining Solar is fully exported (FiT savings)
        BATTERY STORES 13.5
        13.5 kwh x 36c x 365 days

        = $1773 savings
        EXCESS GETS FULLY EXPORTED
        10.5kwh x 16c x 365

        = $613 savings
        TOTAL SAVINGS = $2386
         higher than SOLAR ONLY – 100% EXPORT

        • Again, you are calculating something completely different to Finn. What you have calculated, is blended payback. Finn is calculating savings from battery alone. Notice, if we take your theoretical calculation, and want to understand the incremental benefit of the battery we take your $2386 saving from your “SOLAR + BATTERY – 100% EXPORT EXCESS” and subtract the saving you would have got from the solar alone which was $1401 and come to EXACTLY the same figure Finn arrived at which is the theoretical maximum saving you can achieve by adding the battery which is $985 per year!!!!

          If you care about battery economics, and doing it for economic reasons, you need to factor in the cost of the battery and make sure you make a return in a reasonable amount of time, and certainly it before it expires. Saving a theoretical maximum of $985 on a ~$15k battery that realistically only has around a 10 year lifetime, is just not going to do that on current assumptions, which is what Finn is trying to show. Especially when compared to real world solar savings of somewhere between $1400 and $3000 for a system that would have cost a fraction of the battery cost AND has a usable life of more like 25 years compared to the batteries 10.

          Bottom line, if you care about battery economics, you absolutely need to understand the important difference between blended payback which you are focusing on, and the difference between this and the incremental savings of a battery that Finn is pointing out.

          HOWEVER, it is worth pointing out, Finn knowing kept is calculation VERY simple, and presented a “best case” scenario which artificially overstates and maximises the battery savings, while still comparing them to a real world solar system (ie his calculation overstates the battery savings by a considerable margin, whereas the solar savings are real world output numbers and by choosing 100% export actually understates the solar savings). He no doubt did it to show how definitive and indisputable the poor economics of batteries really are without complicating the calculations with the real world things that will further hammer battery economics. If you want to get a better understanding of what real world battery savings are likely to be, you need to add the following things into your equation :-

          1. Round trip efficiency losses. For a PW2, that is about 12%. That is for every 1kWh of solar FiT you sacrifice to charge the battery, you will only get about 0.88kWh out of the battery.

          2. Due to overcast conditions, and people being away and not using power in holidays etc, you will almost certainly not get 13.5kWh x 365 days a year. Typical real world battery utilisation figures I have seen average in the low 60% range with a typical figures for individuals ranging from 40% – 80%. The maximum utilisation I have seen from anyone was 92% with very high electricity usage and changing the battery overnight from the grid.

          3. PW2 warranty only warrants 70% of 13.5kWh capacity over its life. This is because everyone knows that over time the battery degrates, which will not make the 13.5kWh capacity possible. Even a new PW2 will not neccessarily provide 13.5kWh. I know of one at least 1 new PW2 which can only do 12.5kWh when brand new, and both the installer and Tesla trying to argue that is acceptable (I doubt this would stand up if the owner pushed their claim through ACL because it is new).

          4. because of poor economics of batteries, 1 of the only real tangible reasons to get a battery is blackout protection. So most people will want a reserve for this. In addition to this, even Tesla sets the reserve for this as 10%. I am sure that some of the reason for this will be to increase the chances the battery will last 10 years, because we know that very deep battery discharges are 1 thing that kills batteries. In any case, unless you specifically set this to 0, and reduce your blackout protection, and almost certainly the longevity of the battery, you will not be able to use the full battery anyway.

          5. cost of finances of the battery

          6. the fact that you you spend you money on a battery today, you will not have it to spend on battery down the track when they are probably cheaper, more feature rich, and potentially able to offset power in years when battery economics are better (eg high peak prices and lower solar FiT).

          7. etc

          I know some of this is counter intuitive, especially with political, media and sales people hype about batteries saving money. But this is why Finn is doing a great job in pointing it out. Suggest you watch read again until you understand how Finn has done his calculation if you want to understand the real savings from batteries.

          • I made some mistakes hitting the wrong reply and have ended up elsewhere.

            Thank you for your comments.

            I feel the biggest impact that the battery has is that it allows you to consume your solar generated energy, even with a 12% loss.

            Let’s assume a family spending 15kwh a day. 5kwh during the day, 10kwh at night.
            Under the same assumptions of 24kwh generation

            On Solar, assuming 100% self consumption, they would be paying 10 x 36c = $3.60 a day
            They have a FIT of 19kwh x 16c = $3.04
            Effectively it costs them 54c.

            On S+B, they would be paying 0 for usage during the day (self consumption), 0 at night (drawn from battery)
            During the day, they would have 15kwh used to charge the battery.
            They have a FiT of 9kwh x 16c = $1.44
            Effectively they profit $1.44 from having the battery, which by a theoretical stretch is a $1.98 difference between Solar and S+B.

            Other factors to take into calculation are your FIT. If I used a FIT of 10c, the savings is even bigger @ $2.60, (cost $1.70 for Solar only, profit $0.90 from S+B).

            You and Finn are right – the economics of batteries vary a lot. I am guilty of being South Australian so battery costs to me are significantly lower. I do not know how much more it costs for installation, but with batteries coming around the $3K mark, assuming the savings roughly calculated above multiplied by a year, ROI for battery only (excluding installation) can be reached anything between 3.5-5 years.

            I’ve read your new post (while typing) and concede/agree that economically if you are paying close to or upwards of 5 figures the economics do not make sense.

      • Bearing in mind for SOLAR only, most people will be somewhere in between the flul export or full self consume, that puts them anywhere between a $1401 to $3153 savings.

        Meanwhile, Solar + Batt has a bottom bracket for savings, $2386 to $3153.

        I still feel it’s misleading, because in his conclusion he actually says you save between 1401 to 3153 dollars with solar only, but Solar Battery only $985 a year. He does not mention that with a battery, your self consumption goes up naturally.

        Again, it’s important to highlight Finn and your other caveats, which are that Battery costs differ in different state.

  27. What does this show?

    1. Solar + Batt can’t give you a theoretical better saving rate than Solar Only.

    BUT
    2. Solar + Batt gives you a better chance for minimum savings per kilo watt.

    Compounded with the fact that with a battery you will be self consuming at a higher rate than solar alone, where you only self consume during daylight.

    • To be fair to your calculation and the conclusions you make above, I think that are a little bit harder on the battery than they need to be. In most cases, a battery will help you make more saving on your bills than not having a battery (don’t confuse this with it being a sensible financial investment because of the small saving and big battery cost). This is because in practice, the household that 100% self consumes with solar only is not going to be the same one that you can compare with a house that has a battery and gets anywhere near and full cycle and 100% self consumes their power. The solar only house that already 100% self consumes has no place for a battery, because they have no spare solar to charge the battery. They need to get a much bigger solar system before they even think about a battery. A battery is probably only helpful if you have plenty of spare solar to charge it with. So your household that has a battery and 100% self consumes would be a solar only household that exports 13.5kWh exported (more if you include the efficiency losses). If you compare this household before and after battery, they will likely save more off their bill before and after the battery, but almost certainly not enough to pay for the battery.

      Battery’s can do many things. eg :-
      1. Your bill will probably (though not certainly) be lower with a battery. But the question is, is spending $15k on a battery that saves you about $400 / year ($400 is I suspect an above average real word saving that people could expect with the right usage patterns)

      2. if your goal is to minimise grid import, then a battery can definitely help with that a LOT, or maximise solar self consumption. But again these goals have very little to do with economics, and in most cases to pursue them will cost you lots of money.

      3. if you want some nice seamless backup power, then a PW2 can be good for that. However, it should be realised that a generator is a LOT cheaper if your circumstances allow it. Though I personally think they bring different things, and should not be consider an either/or argument. A generator compliments a battery in long blackouts, and that is why it is disappointing that batteries like the PW2 have no generator support and seriously limits its appeal for long term blackout protection.

      But don’t think a battery always saves money off your bill. There is a guy in NSW that ran a blog showing how much he apparently saved with his PW2 (hundreds of $ a month). I can’t remember the exact details now, but I think he got a PW2, expanded the size of his solar, and signed up for a better electricity plan at the same time and used all of these things to attribute to battery savings. I helped him analyse his figures, and in fact showed that there were many months in winter, where he would have actually saved money off his bill by NOT having the PW2 switched on. His particular “problem” that he had VERY wisely signed up for a great plan which gave him 20c FiT for solar. So by the time you factor in efficiency losses, there was very little room to make money from charging the battery with a single rate electricity plan at 23c. But this sort of thing is not uncommon and I have help people analyse there real savings are it is very common that people think their battery is giving that massive savings, but it is the solar doing the heavy lifting. Where I live in Ausgrid NSW area, I can get more for solar FiT than the off peak TOU rate. So if I am not careful, I can actually be loosing money by offsetting off peak TOU rates, and even shoulder rate the benefits are marginal at best. So if I don’t use TOU settings, it can actually cost me money to use the battery.

      For reference, intuitively, I thought I would be a great candidate to maximise savings from a battery. I am a BIG electricity user, and have well above average electricity usage in peak hours (average around 50kWh / day). I also have a BIG solar system (18kW). But the real world savings for me are only a little over $400 per year for a PW2. Compare that to saving for around $3800 for the solar alone, you can see how the 2 compare. I never expected to get a payback on a battery at current prices, but I will admit intuitively I expected it to be a little better than this. But the numbers don’t lie.

  28. Colin Martin says

    I still can’t justify batteries. Eventually I will be entitled to claim my Battery Rebate of about $5,200 in Victoria but the Government has post code restrictions and it’s getting closer.. Only 14 km away on the latest allowable post codes.. With my 5 months, new 10kw system my power usage is down 84% on Spring last year.. So all I’m paying for is the Service charge.

    So hopefully with the Electricity tariff increases in January our Summer Solar will have us breaking even.

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