{"id":40689,"date":"2020-07-06T14:18:44","date_gmt":"2020-07-06T03:48:44","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=40689"},"modified":"2020-07-06T14:35:45","modified_gmt":"2020-07-06T04:05:45","slug":"nsw-solar-battery-calculator","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/nsw-solar-battery-calculator\/","title":{"rendered":"You Won’t Believe How Dumb The NSW Government’s New Battery Calculator Is"},"content":{"rendered":"
\"nsw

The new NSW solar & battery calculator is so misleading it’s not funny.<\/p><\/div>\r\n

The NSW Government’s Solar Battery Calculator<\/a> is up and running.\u00a0<\/p>\r\n

This would only be a good thing if it was up and running out the door, never to be seen again.<\/p>\r\n

It had one job to do — inform NSW families if a home battery makes financial sense for them — and it fails miserably.\u00a0 Worse, it fails in exactly the wrong direction. <\/p>\r\n

If its advice was too cautious it might put you off buying a battery that only just paid for itself. In which case you might miss out on dozens of dollars of electricity bill savings in a year.\u00a0<\/p>\r\n

Instead, it throws caution to the wind. The calculator declares that many NSW households will save with a home battery when the cold, hard reality is they’ll lose money.\u00a0 Families could lose thousands of dollars following the calculator’s advice.\u00a0<\/p>\r\n

Advice like this:<\/p>\r\n

\"battery<\/p>\r\n

This is simply not true.<\/p>\r\n

Right now a home battery system will only lose most NSW homes money.\u00a0 The only way you could correctly show this message to grid-connected homes in NSW is with unrealistically optimistic assumptions about the installed cost and\/or the value of joining a Virtual Power Plant (VPP<\/a>). \u00a0 The only reason the NSW Solar Battery Calculator says many NSW household are “likely to financially benefit from investing in a solar battery system” is because there is a profound and stupid mistake in how it does its calculations…\u00a0<\/p>\r\n

The NSW Solar Battery Calculator was designed as a companion to the NSW Government produced NSW Home Solar Battery Guide 2020<\/a> that I\u00a0wrote about last week<\/a>.\u00a0\u00a0 Just like in the guide, the NSW Solar Battery Calculator makes the simple but serious mistake of blending<\/a> the excellent payback of rooftop solar power with the lousy payback of home batteries. \u00a0It assumes solar panels somehow magically improve the payback of a battery.\u00a0 Unfortunately, in real life, there is no such thing as magic.1<\/a><\/sup>\u00a0<\/p>\r\n

Happy Fun Batteries Are Fine\u00a0<\/h2>\r\n

If the NSW Government had put out a guide saying:<\/p>\r\n

\r\n

“For most people, batteries don’t pay for themselves yet, but many people still want one because they are the wave of the future and can back up your home. This guide will help you buy batteries with your eyes wide open, and will never deceive you. Because we are the government. You can trust us.”<\/p>\r\n<\/blockquote>\r\n

…that would be great.<\/p>\r\n

Well, actually, it would be weird because it’s not the state government’s job to be a battery salesperson. And we all know you can’t trust the NSW government<\/a>. \u00a0But they do have an interest in making sure the electricity grid operates smoothly, so I can understand them wanting to encourage the installation of batteries, particularly ones that are VPP capable.2<\/a><\/sup><\/p>\r\n

But this isn’t what they are doing.\u00a0 They are instead going to cause real financial hardship for normal, everyday, NSW families by telling them they are likely to financially benefit from a battery that’s only likely to lose them money.\u00a0 The NSW Government should be ashamed of themselves.<\/p>\r\n

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While I don’t think home batteries will become outdated anytime soon, I have to admit it often doesn’t take long for what’s considered to be a wave of the future to end up looking like Western Australia’s 2.63 billion year old wave of the past. (Image: Fredrik B\u00fclow)<\/p><\/div>\r\n

A Losing Proposition In NSW<\/h2>\r\n

While NSW will provide interest-free loans<\/a> for batteries in the right postcodes<\/a> in the Hunter region, there is no big battery subsidy like in SA that could potentially make batteries pay.\u00a0 In addition, VPPs have yet to prove themselves. VPPs are also likely to be unprofitable\u00a0right now, thanks to recent, large falls in wholesale electricity prices<\/a>.\u00a0 This means anyone buying a home battery now in the hope of saving money is making a hell of an against-the-odds gamble.\u00a0<\/p>\r\n

It is easy to show home batteries cannot pay in NSW when used to store solar electricity for use at night.\u00a0 I used the SolarQuotes Retail Electricity Plan Comparison tool<\/a> to get this edited list of standard tariff plans for Sydney:3<\/a><\/sup><\/p>\r\n

\"NSW<\/p>\r\n

Without losses, the amount of money saved by storing 1 kilowatt-hour of solar electricity and using it at night is equal to:<\/p>\r\n

\r\n

The cost of grid-electricity per kWh minus<\/em> the feed-in tariff per kWh.\u00a0<\/p>\r\n<\/blockquote>\r\n

This is because when you put your solar energy into a battery, you lose out on the feed-in tariff you would have received for exporting that electricity to the grid.\u00a0<\/p>\r\n

If we leave out the AGL plan at the top as an outlier, then assuming people sensibly choose electricity plans and don’t mistakenly or intentionally pick ones that make batteries look better, then each kilowatt-hour of stored electricity will save around 15 cents.\u00a0 But because the round trip efficiency of a battery system is typically 88% it will be closer to 13 cents.\u00a0 But to be kind to batteries I’ll round it up to 14 cents.\u00a0<\/p>\r\n

If a home battery with 10 kilowatt-hours of usable storage is bought and installed for $10,000 — which is less than the typical cost of one around that size — and it is fully cycled every day without suffering any deterioration in capacity, then it will save 10 x 14 cents per day: $1.40.\u00a0<\/p>\r\n

That’s $511 per year.\u00a0 If it has a 10-year warranty4<\/a><\/sup> then when it ends it will only have saved $5,114 dollars if it’s assumed it magically doesn’t suffer any deterioration in capacity and it survives for 15 years, which seems unlikely, then it will only save $7,669.\u00a0<\/p>\r\n

To earn back its purchase cost it would have to operate for over 19.5 years — almost twice its warranty period.\u00a0 But it’s actually worse than that because if the household had instead put the $10,000 towards paying off their home loan, then with a 3% interest rate they would be nearly $18,000 better off after 19.5 years.\u00a0<\/p>\r\n

This means, if electricity prices remain more or less constant, then provided a household has a good alternative use for the money, the home battery system will never pay for itself.\u00a0 This is the case even if it never breaks down.5<\/a><\/sup>\u00a0 We can make this calculation look better if we assume all the savings from the battery are invested, but this only reduces the problem and doesn’t solve it.<\/p>\r\n

The Battery Won’t Be Fully Cycled Daily<\/h2>\r\n

No normal home is likely to use a battery’s full usable storage capacity each day.\u00a0 In practice, it will be significantly less because:<\/p>\r\n