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Cars UBS-solar-EV-payback

Published on August 22nd, 2014 | by Giles Parkinson

22

How EVs Could Make Solar Viable Without Subsidies

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August 22nd, 2014 by  

RenewEconomy.

Investment bank UBS says the addition of electric vehicles, and the proliferation of battery storage, will solve the problem of intermittency for rooftop solar and make it viable without subsidies. So much so, it says, that households will be able to budget for 12 years of “free electricity” for a 20-year solar system.

In a major report on the “revolution” that could hit energy markets any time soon, UBS says – as we report here – that the combination of EVs plus solar plus storage will deliver a payback time of 6-8 years by 2020 – effectively making centralised fossil fuel generation redundant.

It says this is not understood by the utility industry or the market, because they are “not yet looking at the topics of solar, EVs and stationary batteries with a holistic view.”

UBS solar EV payback

“Our proprietary model (above) shows it is the combination of the three that makes solar fully competitive and that has the potential to bring disruptive changes to the electricity sector.

“Here are the maths: One can leverage the EV purchase with an investment in a solar system and a stationary battery. By doing so, one can optimise the self-consumption of solar power and minimise the “excess waste” of solar electricity.

“And what also may matter to many EV buyers: The electricity used to drive the car is carbon-free. The combination of and EV + solar + battery should have a payback of 7-11 years, depending on the country-specific economics. In other words, based on a 20-year technical life of a solar system, a German buyer should receive 12 years of electricity for free (purchase in 2020).”

UBS says pure battery EVs will be competitive with cars with internal combustion engines, and in some instance may already be so.

ubs EV parityAs this table to the right shows, the 3-year total cost of ownership (TCO) of a Tesla S model is similar to that of a comparable petrol combustion engine car such as an Audi A7, especially in markets with high fuel prices like Germany – a country where purchase incentives are almost non- existent.

“We think that by 2020, shrinking battery and solar cost will make EVs in the mass segments the cheaper alternative over a car life cycle in most European markets.

“While on a global basis, EV sales for the remainder of the decade should be mostly carbon/fuel standards and related incentives, we think penetration rates will accelerate significantly after 2020 driven by compelling economics. As a conservative 2025 scenario, we think  about 10% of new car registrations in Europe will be EVs.”

So, how does this work in practice?

UBS provides the table below to explain why solar plus stationary battery plus electric vehicle, in combination with smart demand, is an almost perfect fit.

EV charging during the night smoothes the daily demand curve. The stationary battery stores excess solar electricity during the day and releases it in the evening hours.

The remaining supply gap will be filled with electricity from the grid during the night/early morning hours, which is when spot prices are low and there is excess base-load and wind power supply. On top (not illustrated below), the stationary battery may be re-charged in the early morning hours with excess grid electricity (at low prices) and supply the morning demand peak during breakfast hours.

UBS balance supply

Source: RenewEconomy. Reproduced with permission.

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • inductancereluctance

    Yet another reason why leasing a solar system makes absolutely no financial sense.

    • Bob_Wallace

      Saving some money is the same as saving no money?

      • inductancereluctance

        Why same “some money” with a lease when you can save a lot more money with a $0 down purchase?

        • Bob_Wallace

          Why (save) “some money” with a lease when you could save some more with a purchase?

          I can’t answer that. I don’t understand why some people lease a car rather than purchase one, drive it longer and save some money.

          I don’t know why some people rent when they could buy a house, but I’m glad to own the house, rent it to them, and earn the equity they could have built up.

          And I can’t tell you why some want to lease a solar system when they could own. But I suppose that is what they want to do and it’s their decision to make.

          Some may do so because they just don’t want to own a system, they’re more comfortable with someone else owning. As long as they can cut their monthly bills, and perhaps do something ‘green’, that’s good enough.

          Now, if you wish to inform people about the advantages of owning as opposed to leasing, that’s legitimate. But where you, IMHO, step over the line is when you start talking about ‘giving your 30% tax credit to the leasing company’.

          (There are some other dishonest sales pitches that we’ve seen in comments lately. I’m not going to take the time to go back and dig them out and see if it was you or someone else who made them.)

  • http://www.electric-car-insider.com electric-car-insider.com

    Here’s a link to the original UBS report, or one that precedes it, which apparently is from Jan 2013:

    http://www.qualenergia.it/sites/default/files/articolo-doc/UBS.pdf

  • Roger Pham

    How EV’s could make solar viable without subsidies? Simple: BEV’s stimulate large-scale battery production which will lower the cost of battery for home storage of day time solar energy. FCEV stimulate further growth of solar PV installation around the H2 stations for making H2 in-situ, which will help lower the soft costs associated with residential PV installation.

    Have EV’s with plug out capability to help provide power for rainy days to help increase penetration of solar energy.

    Day time EV charging at work or at the shopping centers to take advantage of the low cost but short range BEV’s like the Leaf to double it’s daily range on a small battery pack. PV with direct DC power for charging EV and bypassing the grid further resulting in low-cost solar electricity.

    • Bob_Wallace

      Same old problem, Roger.

      Hydrogen is an inefficient storage method.

      But you keep on beating that raggedy old dead horse. It seems to give you some pleasure….

      • Roger Pham

        Well, the dead horse is the acknowledged fact that H2 is not as efficient as battery by factor of 2 to 1. But it may not be a show stopper for FCEV. So, people may prefer BEV’s many folds over FCEV’s. But, when petroleum will be scarce, the US yearly market may have 10 millions EV’s, of which 7 millions could be BEV’s and 3 millions FCEV’s…this sizable number will need a lot of H2 stations and nearby solar PV panels to supply energy to the filling stations…

        • Bob_Wallace

          ” But, when petroleum will be scarce, the US yearly market may have 10 millions EV’s, of which 7 millions could be BEV’s and 3 millions FCEV’s”

          You think 30% of all new car buyers will be willing to pay more than twice as much as they need to per mile to drive? To lock themselves into having to go to fueling stations every few days or purchasing an expensive H2 rig to put in their garage?

          And do all this to save spending an extra 20 minutes on a long distance trip a couple of days a year?

          • Roger Pham

            Good point, Bob. I don’t have the exact answer for this futuristic scenario. For me, a 200-mile BEV works just fine, because we don’t drive long distance but rather fly on vacations.

            But there are many people with long-distance relationships and drive hundreds of miles on weekends to see their GF or BF, or work out of town and drive home on weekends, many hundred miles trip per weekend. A few people I know have relatives in different states and every month or two they drive over a thousand mile each way, at 90 mph, to visit each other. With comfy vehicles and smooth Interstates Hwys, people can easily drive a thousand mile in less than 12 hours, so, leaving home at 7-8 am and arriving in time for supper! A 1000 mile trip will require 3 fillups in a 300-mile range car.

            Major car MFG’s don’t just spent billions USD without first do a market research.

          • Bob_Wallace

            How many hundreds of miles to see their G/BF? A 200 mile EV should cover 350 miles with one stop.

            Drive that much and you’re spending 6-7 hours on the road each way. Twelve to fourteen hours per weekend.

            Drive that much and you probably will be looking for a different relationship in a few months.

            “With comfy vehicles and smooth Interstates Hwys, people can easily drive a thousand mile in less than 12 hours”

            Averaging 83 miles an hour, including fuel/food/bathroom breaks? Sorry, that stretches things way too far. I recently drove coast to coast and back. I can assure you that no one was driving 90 miles an hour and people more than a few miles over the speed limit were getting stopped on the highways I used. I experienced several people driving past me at ~10 miles over the limit and saw them again later on sitting on the side of the road with a patrol car writing them a ticket.

            Roger, in your desire support FCEVs you create unrealistic, way out on the fringe conditions. Try to stay real.

          • Roger Pham

            Sorry, may be people stretched thing a bit when they told me about their adventures. 80 mph is more typical speed in the Interstates that we usually encounter. The future ratio of BEV’s vs FCEV’s may be even higher, depending on how fast battery will come down in cost and weight. FC may have advantage in big trucks, van, and buses, and in cold climates.

          • Bob_Wallace

            So now 80 is your new 90?

          • jogi54

            Especially in Germany, where we can drive on several highways much more than 80mph, you cant compare a BMW 735 with a Tesla S. I drive a Citroen C5 3.0l (with the same engine as the BMW), max speed 250km/h, and have to drive to work at sunday nights 320km, which I can do with my car easily in 2:10h at the night. This never would be possible with a Tesla S, in case you drive with a Tesla 200km/h – the battery is empty after ~120km.
            On my house in Cologne, Germany, I have installed 7,44kWp east/ west PV and a very big 20kWh brutto/16kWh net LiFeYPO4 battery with 3 x 5kW frequency converters, which can cover all my needs of electricity. 9oo12 months, I feed in the grid only, dont need any power from the grid the most time
            In winter, until now, I need ~800kWh from the grid.

            Additional, I need ~3500kWh/a Gas for heating the house (very high insulated, before it had been at 28000kWh/a). Just looking for the best solution – either stirling motor heating, or any natural source, like wind + additional PV + heat pump heating or any other solution for the winter.

            The goal will be for me, to feed as well a car like a Tesla S at home minimum while that 9 months (ok not for all distances I have to drive…) and dont need any energy from outside for the house.

            jogi54

  • shecky vegas

    Why do these articles attribute battery storage to “just enough” until the consumer needs to resort to the grid? Just include additional batteries and go completely off grid!

    • Bob_Wallace

      Money, Honey.

  • http://www.carnewscafe.com electricnick

    It’s interesting to see these banks finally talking about what many of us have been saying since 2007, PV + EV = Mobile and load balancing storage.

    With V2H and V2G, how much more affordable EVs are today and the same holds true for PVs, a family that plans well can be an energy powerhouse. Utilities could see them as business allies and make that switch from energy producers to energy managers.

    We’ve been saying this for a long time now.

  • Vensonata

    Interesting article. I have proposed this scenario several times recently in the comments. Nice to see others connecting the dots. I am sure there are already a few households in the U.S. who have an EV, Rooftop PV, separate PV for daytime car charging and some battery storage as well. Most of them would be grid tied and I would certainly like to hear from them. One of the regular commenters is close to that set up, and I think he is an engineers as well. Would also like to hear from any off grid with an EV. And finally, anybody using Lithium ferrous battery bank for solar storage out there? The Bosch lithium battery bank has been used in Germany for a couple of years…any reports?

  • MrL0g1c

    Residential solar is already viable without subsidies, it’s just that the installation costs in the US for residential are far too high, Germany and UKs installations costs are a fraction of the USA installation cost. To say that electric vehicles make Solar viable is disingenuous if you don’t include the cost of those electric vehicles.

    What is the carbon footprint of manufacturing a car?

    We should be encouraging more cycling and rail, not more cars.

    With battery storage highly likely to be well under $100 per kWh by 2020 there’s no reason why batteries shouldn’t be an integrated part of solar installations in the future.

    • Matt

      Yes, “report” is a bit off. In fact they talk of EV charging at night using cheap grid power; so really the EV has nothing to do with the home PV/battery system. Unless they are trying to say the EV will help “store” the cheap night time wind power, but again unrelated. Also the “holes” in Figure 15, shows at best lack of understanding. You would use your batteries during the peak cost times (17-20) not during cheap times. Or maybe the report is just, PV/EV/storage good, don’t really understand details but sure its good. So it isn’t wrong, just …

      • Will E

        solar is cheap daytime power.
        this article gets to the point that the combination makes the profit.
        Germany exports Wind turbine power at minus 5 cent a Kwh, and stops the Windturbines producing energy.
        and at the same time Germany imports diesel and gas for the cars.
        With electric cars Germany can store the surplus of Windpower in the EVs.

        and stop importing diesel and gas.
        a win win win win and is just not happening.

    • Jouni Valkonen

      Electric cars can be assumed as free in this analysis, because people need to buy cars indifferently if they use it as energy storage for solar panels.

      It is good to understand that the soft costs of solar are costs only for individuals, but they are not real costs for local economy as a whole, because money is only transferred from pocket to pocket. No money will disappear from the economy in this transaction. This is the reason why it makes sense for local economy that soft costs of solar are always subsidized, because of course solar panels are producing new electricity for few decades and therefore increasing long term wealth and prosperity of local economy.

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