3 Things I Wish I’d Thought About Before Joining A VPP

SolarQuotes Founder Finn Peacock offers some important advice for Australians considering signing up for a VPP (Virtual Power Plant) program.

Transcript:

Four years ago, I signed up for an AGL VPP. I’m not going to bash VPPs in this video because I actually got a great deal. I got $14,000 worth of Tesla Powerwall 2 for about $4,000.

So, I saved 10 grand by giving AGL permission to use my battery, almost in any way they want.

What have I learned? Well, I’ve learned three things that are really, really interesting.

AGL Charging The Battery – At My Expense

Number one, how they’re using the battery. Now, the really interesting thing, if I look at my app, I can actually see how they’re using my battery. So that’s really good. I’ve got full transparency when they’re charging and discharging my battery.

It’s telling me, let’s have a look at over four years, they’ve only ever put 26.1 kilowatt hours into the battery from the grid. And they’ve only ever discharged 32.9 kilowatt hours out of the battery into the grid. So, basically bugger-all.

But what is really interesting is when they’ve chosen to do that – which has only been the last three weeks – how they’ve actually gone about doing that. And they’ve done it in a way that I would have never thought they would have.

I’m going to show you three examples from the last three weeks.

Tesla Powerwall battery charge and discharge

On the 17th of May, if you have a look just before the sun goes down, essentially they charged my battery up with 11.1 kilowatt hours of energy. So, almost fully charged the battery. But then if you look below the X axis here, they discharged bugger-all of it.

And then again here, just before sundown, they’ve charged it with 5.7 kilowatt hours, which is about half the battery, and then they haven’t used any of it. And then a couple of weeks before that they charged it with 8.3 kilowatt- hours – so about two thirds of the battery – they filled from the grid and used a tiny bit of it.

So I think, AGL won’t tell me, we did ask –¬† I think what they’re doing is they’re charging the battery from the grid for certainty; just in case they need that energy. That’s my best guess. And then often they’re using very little or none of it, but that’s a way I never considered they’d actually use my battery.

They say, “you know what, we’re going to charge up the battery”. And I’ve got to pay for that, by the way. We’re going to charge up the battery, just in case we need it. And then often don’t use it. And certainly they’ve never used the whole, all the energy that they’ve put into the battery. So that’s interesting. Although they’ve used my battery very little, when they do use it, they’re using it in really interesting ways that you may not anticipate.

So if you’re signing up for a VPP now, when they’re much less generous, you’ve got to do a bit of mental arithmetic. If they do that every night or every night over winter, how much is it going to cost you? If it’s costing you $2 a day and you’re saving $1,500 over the lifetime of the VPP, you could very easily be net negative.

So these VPPs, they are an unknown. And as my mate Ronald has always said, if there’s an energy retailer running your VPP and controlling your battery, do you trust energy retailers – who haven’t got a great reputation in this country, let’s be honest – to look after your interests ahead of theirs? Or do you suspect that they’ll screw you over? That’s your judgment, but just be careful when you’re signing up for a VPP as you are letting these people control your battery.

Feed-in Tariff And Usage Rate Changes

The second thing that I didn’t really consider – and like normal people I didn’t read the gazillion pages of terms and conditions – is that recently they halved my feed-in tariff.

I’ll say without telling me – but they probably sent me an email that I didn’t read, because I don’t read many of my emails to be honest. Especially the ones from big companies, because often they’re threatening to sue me. I’d rather just ignore that. Oh, and by the way, don’t use AGL’s logo in this James, because we don’t want to get sued like Greenpeace.

So they halved my feed-in tarrif, and I export quite a lot of solar – and that had a fairly big effect on my bill.

Now I could go onto the AGL website and push a button and get back onto the original plan that I was on, which was a 16 cent feed in tariff – up from eight. But you know, four years ago, I just kind of naively assumed that the rates I was on are the rates that I’d have for the next five years while I was essentially locked into the AGL VPP contract. The contract – which I can get out of – but it will cost me thousands of dollars to get out of. Why would I pay thousands of dollars to save a few hundred dollars switching retailers – I wouldn’t.

So the second thing: be aware, read the terms and conditions if you can get through them, but be aware that there’s going to be nasties in there like they can probably change the rates they’re paying you for feed-in tariffs and the usage tariff. They put mine up, they put my daily charge up. They can probably change.

If you’re doing your math on the rates that they’re offering you initially, that may not work for the lifetime of the VPP plan.

Electric Vehicle Considerations

Now the third one that I didn’t think about – which is really interesting – I didn’t really care what they were charging me to pull energy from the grid as I was using bugger-all. It was, I think it was 36 cents, which is a bit extortionate for grid electricity. But I’ve got a six kilowatt solar system, I’ve got an efficient house and I’ve got a Tesla Powerwall 2.

I was drawing bugger-all off from the grid, but two years after I got my battery, I bought two electric cars and got rid of my petrol cars.

Now, if you get an electric car – simplifying it – you’re going to at least probably double your electricity usage. Now I’m in a position where I’m actually drawing quite a lot of electricity from the grid. And there’s all these beautiful kinds of EV plans being offered by other retailers where you can charge your EV at night, very cheaply.

They make a lot of sense for me, trying to charge two cars, using a lot more electricity. But I’m essentially locked out of them because I’m stuck with AGL for another year. So, if you’re locking yourself into these multi-year VPPs thinking, “I use bugger- all electricity”, things change very quickly in energy in 2021. There’s a very strong chance you’re going to get an EV in the next 2, 3, 4, 5 years and if you do that, your electricity usage is going to go through the roof.

You may want flexibility in your electricity plan – so think about that.

I think VPPs are very important if done properly and batteries, very, very important. VPPs are a great way to maximize the value of those batteries, but just be careful before you sign up for them. These multi-year VPPs – there’s a lot of things you’ve got to consider that even so-called experts like me kind of glossed over because I was wowed at saving 10 grand on a Tesla Powerwall 2, which I really, really wanted.

Now don’t get me wrong – I think I’m still $9,995 up. So I got a great deal. But the VPPs that are around in 2021 are nothing like as generous.

Be careful signing up for VPPs. Do your homework, think long and hard about if your electricity usage habits are going to change and watch the retailers like a hawk, because they may well change your feed in tariff, change your usage tariff – and be aware that you’re giving them free range to do what the hell they want with that battery.

They can charge it from the grid, which is going to cost you money at times when you might not want to charge it from the grid. And the whole point of getting a battery might have been for you personally – everyone’s different – that you didn’t want to import energy from the grid.

So be careful – go into VPPs with your eyes open.

RelatedCompare VPP Plans

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. Mark Byrne says

    And let’s not forget that if they are charging from the grid after sunset, in most states that energy will probably mostly come from burning coal.

  2. Philip Jensen says

    Given that your your battery and the grid seem to be somewhat distant acquaintances and it all looks benign and not a big impost on your bills, do you not wonder if AGL knows exactly who you are (from the picture on the boardroom dartboard) and is giving you a less that representative usage pattern? Easily done and potentially a way to flim-flam the legions who await your missives with bated breath. As the Greenpeace link shows, they are one of the least benign (actually downright rapacious) of the conglomerates after all. Do you have a neighbour with an AGL VPP Powerwall 2 setup that you could check that on?

  3. Dominic Wild says

    Thanks for telling us all the traps one can fall into with those VPPs. Here in WA the provider is paying us 3c until 3PM, then 10c/kWh and tells us on TV how great they are by starting to put batteries into suburbs. Easy to do if one gets charged 25c/kWh!

  4. Thanks for that. I have signed up recently to be included in the latest trial by AGL, but so far only on the wilting list. As they were quite vague with their promises and not providing any details about T&Cs I am not surprised about your post.
    From what I can see at the moment, the VPP is a one sided game, that mainly benefits the energy providers, balancing the grid and use it for their own benefit, not having the customers situation in mind.
    I assume that this is also the reason why Vehicle2Home or Vehicle2Grid takes such a long time to come into reality.
    I am not interested in Vehicle/Battery2Grid. I am only interested in Vehicle2Home – using my Nissan Leaf in the same way as a home battery, which would not feed the grid either.
    The energy retailers nor The Government are not interested in Vehicle2Home because it would interfere with their game. EVs would charge when it is cheap or free (Solar) and discharge when energy is needed (at home). AGL and competitors would not be happy about this. …

  5. Joseph King says

    25c/kWh, lucky you. My supplier in Melbourne charges me $0.448c/kWh and in the 12 months we had the panels on the roof, no feed-in tariff. Really must look for a new supplier. Now that we have a battery they aren’t even taking out excess generation. That’s going to not utilise a lot of power in the summer months.

  6. Hi Finn,
    Interesting. Let me first declare I am not an expert here. I have a 13 kwh PV system and 10 kwh export capability, and have just signed up for an AGL VPP Powerwall 2. I live in VIC and am trying to beat the reduction in Solar Vic rebates from July. My ROI calculation after all rebates/discounts is 8-10 years based on my usage pattern and AGL’s current FIT and charges. Breaking the contract would cost me up to $1000. My recent multi-day (felt like multi-month) blackout due to the storm in VIC was the final straw on the Powerwall decision. I am currently with Amber Electrics which, despite all the promotion, has not resulted in significant savings for me (to be fair, that’s partly because sometimes I refuse to be sitting in my study without the heating on because it’s 0 Centigrade outside, even though the wholesale price is spiking at $3-12/kwh).
    I know only in my dreams that power companies put customers/the planet before their profits. But I wonder if they charged your battery when there was a lot of renewable power to stabilise the grid? Despite all the possible downsides, I think it still makes sense (financially, power-security, and less reliance on the grid) for me to join AGL VPP, or am I misguided?

  7. Brad Sherman says

    I’d like to learn more about electric vehicle to home opportunities. The comment about cheap charging of evs at night sounds like just a return to off-peak hot water heating of past decades used to balance the grid’s big thermal plants (i.e. coal) at night. Kinda defeats the point of shifting to an ev to help reduce FF emissions.

    Like Tom, I’m interested in getting an ev, charging it during the day (to balance all that surplus renewable generation in the grid) and then using it to supply my home’s shoulder and peak loads around sunrise and in the evening. Is there any chance of this becoming possible in the next few years?

  8. I am on the same VPP and have also noticed that they have actually used it this month after not using it at all for 4 years or so (other than 5kwh or so). As you say, we got a good deal but maybe the current offer is not as good (but isn’t that commonly the way with early adopters- i.e those who got boosted feed in tarrifs?)

    As to AGL’s plans, the solar saver one comes with a higher feed in but other rates are higher. If you have electric cars and a battery, wouldn’t the feed in be less important vs self consumption?

    I have changed plans twice in the four years and understand there is no lock in on the plans (other than losing any bonus rebates etc).

    AGL does offer an electric car plan with subsidies which I have been considering switching to (you get $480 worth of credits over 2 years or something), but I think it comes out only slightly better than I’m paying now due to it having higher feed in but higher usage and daily charges (and with the risk that I come out worse off of I use more electricity)

    As to leaving the vpp early, it’s been a while since I looked at it but I recall there was a sliding scale for what you had to pay if you left early (starting at $5k(?) And going down to zero).

  9. Thanks for this Finn – I’m still on the fence about committing to a AGL VPP with a PowerWall2 – they have me on a waiting list, but Energex needs me to convert my 1 ph connection to a 3 ph connection before they will grant the connection request. I’m doing ,my research into VPPs in the meantime.
    I have a 13.2 kWp PV array (45 panels of SolarWatt) and 2x 5 kW SMA inverters.
    With a 10-13 kWh battery, can either it (or a smart load controller) be configured to fully charge the battery from the PV/inverters before exporting to the grid in the middle of the day (and avoid the ‘just before sunset’ grid charging of the battery), and maintain the full battery charge?
    Then in the evenings, one can use the ‘allocated minimum’ for home loads (without drawing from the grid) and the balance can remain available to the retailer if they want to discharge.

  10. Wayne Burzacott says

    I’m in the process of getting out of the Tesla VPP now. Tesla took and axe to the original flat tariff plan to force people on to their less favourable TOU plan.
    Then they started charging and discharging the battery as if we were on a TOU plan rather than a flat tariff.
    I figure if I’m going to pay the same rates other retailers are offering I might as well move and have control over my battery.

  11. Count yourself lucky though. Here in Perth we have only ONE provider – Synergy, and they are extremely opposed to roof solar and to batteries they allergic. The feed in tariff is 3 cents, and my Tesla Powerwall 2 is restricted to 3 kWh charging and decharging. So, you will always have grid consumption for top prices. We have no cheaper night tariffs here, and have no EV plans.

    It feels like living in a totalitarian state with just 1 energy provider.

Speak Your Mind

Please keep the SolarQuotes blog constructive and useful with these 4 rules:

1. Real names are preferred - you should be happy to put your name to your comments.
2. Put down your weapons.
3. Assume positive intention.
4. If you are in the solar industry - try to get to the truth, not the sale.

GET THE SOLARQUOTES WEEKLY NEWSLETTER
%d bloggers like this: