Batteries

Published on April 10th, 2015 | by Aisha Abdelhamid

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Off-Grid Solar Power vs Grid-Connected Solar Power In The 21st Century

April 10th, 2015 by  

Originally published on SolarLove.org.

The future in which power company customers transitioning to solar electricity generation can choose to either maintain grid connection or cost-effectively generate off-grid has arrived. The implications of this reality, however, are only just beginning to dawn.

Rising on the horizon of a new solar energy era, concerns for stranded assets are keeping power company stakeholders up at night. Equally disconcerting, low- and fixed-income electricity consumers with no financial ability to upgrade to solar will find themselves unable to handle higher utility bills as electricity prices increase, due to increased grid-defection.

Solar Electricity's Future: Grid-Connected vs Off-Grid

Projecting the Rising Solar Energy Era

Only with an informed roadmap of the economic implications of America’s rising love affair with solar energy, can we navigate a socially just and economically viable way forward. The Economics of Load Defection, a new report released by Rocky Mountain Institute (RMI), offers this roadmap.

Noting that retail prices for grid electricity are climbing while costs for solar PV and batteries are declining, The Economics of Load Defection projects the coming electricity load and revenue loss that utilities could well face in the coming 10–15 years. Implications for utility companies and regulators are clearly detailed in the new report, as well as possible paths forward.

Solar-plus-battery systems are expected to play a major role in America’s future electricity grid. But exactly what that role will be is not yet clear. Retail pricing structures, utility business models, and regulatory frameworks are all evolving at a steady pace, and outcomes of these evolutionary processes will largely determine which trajectory the grid will follow into the rising solar energy era.

Focusing on Grid Load and Sales Revenue Economics

As the report authors point out, solar-plus-battery systems are increasingly becoming a cost-effective option for property owners. And, as these utility customers determine and adopt economically optimal solar energy configurations, their dependence on the grid for meeting electricity needs decreases significantly, while solar PV rises to supply the majority of their needs at significantly reduced cost. Although this sounds alarmingly like an S.O.S. from a sinking ship, the report authors offer this for reassurance:

“While the presence of such customer choice has important implications, the number of customers who would actually choose to defect is probably small. The far more likely scenario is customer investment in grid-connected solar-plus-battery systems. Since such systems would benefit from grid resources, they could be more optimally sized, thus making them smaller, less expensive, economic for more customers sooner, and adopted faster. More specifically how system configurations and economics would evolve over time, and what magnitude of customers, load, and revenue that could represent, are the focus of this analysis.”

James Mandel, RMI Principal and report author, notes, “These findings should be compelling for customers and technology providers.” Mandel continues, “No matter how expensive retail electricity gets in the future, customers that invest in these grid-connected systems can contain their electricity costs at or below a ‘peak price,’ yielding significant savings on their monthly utility bill.”

“This is not all risk,” explained RMI manager and report coauthor Leia Guccione. “Because these solar-plus-battery systems are grid-connected, they can offer value and services back to the grid. We need not see them only as a threat.”

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The Implications of Increased Electricity Load Defection

Nevertheless, exploring the implications of increased load defection, the report points out that “even if only a fraction of customers adopt such systems, utilities could face lost kWh sales from central generation, potentially undermining revenue needed for ongoing grid investment and maintenance. For example, in the Northeast United States, by 2030 maximum residential and commercial load defection could total 140 million MWh and $35 billion per year.”

In reality, however, the report authors appear to favor utility company adoption of solar-friendly regulatory reform and solar energy grid-connection strategies as a way of slowing the arrival of the inevitable death of the grid. According to the report, even the prevalent “net energy metering” (NEM) strategies and more recently proposed “fixed energy charges,” are not strong enough measures to control ultimate load defection:

Net energy metering is a contentious yet prevalent policy that has successfully supported distributed solar PV’s growth in the U.S. Some argue that it hastens load loss from the grid (net-metered solar PV customers quickly reach effectively zero net grid purchases) and that abolishing net metering will preserve grid load.

Our findings suggest that eliminating net metering merely delays inevitable significant load loss. Grid-connected solar-plus-battery systems will gradually but ultimately cause a near-total load loss even in net metering’s absence. However, fixed charges — which some utilities have recently proposed — don’t ‘fix’ the problem. Similar to our “with” and “without” NEM scenarios, residential fixed charges would likely alter (i.e., delay) the economics for grid-connected solar and solar-plus-battery systems, but likely wouldn’t alter the ultimate load defection outcome. Customers might instead wait until economics and other factors reach a tipping point threshold and more dramatically “jump” from grid dependence to off-grid solar-plus-battery systems that offer better economics for electric service.

Major Findings of The Economics of Load Defection

The major findings reported in The Economics of Load Defection are as follows:

Solar-plus-Battery Systems Rapidly Become Cost Effective

From the utility customer’s economic perspective, a grid only system configuration evolves in the near term to grid-plus-solar, and then to grid-plus-solar-plus-batteries in the longer term. The report states, “Grid-connected systems of this analysis become economic for customers much sooner, with substantial utility load loss well within the economic life and cost recovery period for major assets. Smaller solar-only systems are economic today in three of our five geographies, and will be so for all geographies within a decade. New customers will find solar-plus-battery systems configurations most economic in three of our geographies within the next 10–15 years.”

Solar PV Supplants the Grid Supplying the Majority of Customers’ Electricity

The utility customer initially receives the majority of his electricity supply from the grid. “Over time as retail electricity prices from the grid increase and solar and battery costs decrease, customers logically reduce their grid purchases until the grid takes a backup-only role. Meanwhile, solar-plus-battery systems eventually provide the majority of customers’ electricity. For example, in Westchester County, NY, our analysis shows the grid’s contribution shrinking from 100% today for commercial customers to ~25% by around 2030 to less than 5% by 2050. Inversely, solar PV’s contribution rises significantly to make up the difference.”

Potentially Large kWh Defection Could Undermine Revenue for Grid Investment Under Current Rate Structure and Business Models

The report authors estimate that the grid requires an approximate investment of $100 billion a year, or $2 trillion between 2010 and 2030. This annual investment is expected to be recovered through electricity sales revenue. They point out, however, that a large impact on system economics can come from a relatively small decline in kWh sales revenue. “Notably, our analysis shows that grid-connected solar-plus-battery systems become economic for large numbers of customers, and those systems have the potential to supply greater and greater portions of customers’ electricity. Assuming customer adoption follows optimal economics, the magnitude of potential kWh defection from the grid is large.”

As an example, the report projects what the maximum possible kWh sales erosion might be in the US Northeast by 2030, only 15 years away:

Residential:

  • ~58 million MWh annually (50% of utility residential kWh sales)
  • 9.6 million customers
  • $15.4 billion

Commercial:

  • ~83 million MWh (60% of utility commercial kWh sales)
  • 1.9 million customers
  • $19.4 billion

Significant Implications vs Emerging Opportunities

While implications from the above findings could be very large, the report also recognizes emerging opportunities. Although grid-connected customers are projected to represent significant electricity load loss, the customers’ grid-connected solar-plus-battery systems “can potentially provide benefits, services, and values back to the grid, especially if those value flows are monetized with new rate structures, business models, and regulatory frameworks.” Crucially, grid-connected customers are projected to maintain their connection to the grid, as long as grid defection isn’t encouraged by penalizing charges and/or changes to retail electricity price rate structures.

Participants in the electricity system market and other stakeholders are facing profound impacts which, according to the report authors, come with the following considerations:

For customers that invest in solar PV and solar-plus-battery systems, the emergence of choice is good news.

Report analysis suggests that, “with smart solar-plus-battery investments, customers could see peak pricing emerge, insulating themselves from rising prices for grid-supplied electricity.” However, traditional grid-supplied customers would see higher pricing from rising retail prices, and defected customers (off-grid) would face the necessity of larger, more expensive stand-alone solar-plus-battery systems.

For owners and operators of central generation and transmission (such as independent power producers and merchant power plants), report findings are likely bad news.

The report analysis predicts that the decline of sales from central generation will accelerate with the adoption of solar-plus-battery systems, and the risk of stranded assets is real. As noted in the report, “Existing assets still within their economic life and cost recovery period will serve a smaller and smaller remaining load, requiring price increases to cover costs and returns. Meanwhile, assets in the planning pipeline won’t see the future demand to justify their capacity and generation output.” Reductions in peak price spikes are also likely in deregulated markets, and solar-plus-battery systems are additionally expected to encroach on markets for ancillary services.

For distribution grid operators (such as wires-only utilities), the emergence of distributed solar PV and batteries is good news.

Distribution grid customers with solar and battery systems are anticipated to provide value to the grid including upgrade deferrals, congestion relief, and ancillary services. However, the report notes that in order to fully capitalize on these opportunities, new business models, pricing schedules, and regulatory reforms need to evolve.

For vertically integrated utilities, these systems will strain current business models, and adjustments will be necessary.

New business models are needed to fully capitalize on the rising adoption of solar PV and batteries. The report authors anticipate that similar challenges will be faced by distribution utilities whose revenue depends on volumetric sales of electricity.

image

Stranded Assets vs Integrated Grid

Jules Kortenhorst, CEO of Rocky Mountain Institute and Carbon War Room notes, “Today’s electricity system is at a metaphorical fork in the road. Down one path are pricing structures, business models and regulatory environments that favor eventual grid defection.” The report authors explain that this path favors grid defection, resulting in an upward price spiral. This path leads to the inevitable stranding of grid assets serving a dwindling load.

Adopting an off-grid solar-plus-battery option will become increasingly appealing for increasing numbers of customers, leading to skyrocketing prices for customers remaining on the grid. In particular, low- and fixed-income customers will be forced to bear a disproportionate burden of the rising retail price for electricity. Down this path, resources on both the grid side and the customer side reach a point of being overbuilt and underutilized, a classic example of stranded assets leaving excess capital on both sides of the electric meter.

On the other hand, RMI CEO Kortenhorst explains this possible future, “Down another road, those same factors are appropriately valued as part of a transactive grid with lower system-wide costs and the foundation of a reliable, resilient, affordable and low-carbon grid of the future in which customers are empowered with choice.”

This alternative path favors business models, regulatory reforms, and stable price structures in which, as the report authors suggest, “distributed energy resources [DERs] such as solar PV and batteries — and their inherent benefits and costs — are appropriately valued as part of an integrated grid.” Such an integrated grid offers a future, according to the report, where grid and customer-side resources collaborate with far greater efficiency in the generation and usage of both capital and physical assets.

Optimizing the Future Grid of the Solar Energy Era

These two pathways into the rising solar energy era are not set in stone. There is ample room for innovative thinking, entrepreneurial planning, and socially just strategies. However, the decisions being made today are likely to set us on a course that becomes more and more difficult to correct. The time frame for optimizing the future grid is relatively short, and growing shorter and more urgent for some geographical regions where solar options are already prevalent and appealing.

Kortenhorst summarizes this urgent need for determining the best path forward: “That’s why RMI is focused on new utility business models, regulatory reform in places like New York, and accelerated adoption of rooftop solar and other DERs—so that the grid of the future can provide customers reliable, clean, affordable power for decades to come.”

Founded in 1982, Rocky Mountain Institute is an “independent, nonprofit think-and-do tank.” Engaging with businesses, communities, and institutions, RMI promotes advanced market-based solutions to drive a cost-effective divestment from fossil fuels to efficiency and renewables. Their work aims to accelerate and scale replicable solutions that transform global energy use for a clean, prosperous, and secure future.

Click here to download RMI’s new report, “The Economics of Load Defection.”

image

All Photo Credits: © RMI.org


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About the Author

is a freelance lifestyle and environmental science writer currently living in Vancouver, BC. Her interests include environmental conservation, climate science, renewable energy, faith-based environmental activism, green building, creative lifestyles, and healthy living.



  • Bob_Wallace

    How about a link that works?

  • GJK

    Just a small part from the link: The Government is subsidizing the cost @ 18 cents per kilowatt hour…Ouch>> I guess when you read the facts you find not just the cost but the real maintenance issues associate with WIND it will surely blow out anyones candle.

    (Reuters) – When the Netherlands built its first sea-based wind turbines in 2006, they were seen as symbols of a greener future.

    Towering over the waves of the North Sea like an army of giants, blades whipping through the wind, the turbines were the country’s best hope to curb carbon emissions and meet growing demand for electricity.

    The 36 turbines — each one the height of a 30-storey building — produce enough electricity to meet the needs of more than 100,000 households each year.

    But five years later the green future looks a long way off. Faced with the need to cut its budget deficit, the Dutch government says offshore wind power is too expensive and that it cannot afford to subsidize the entire cost of 18 cents per kilowatt hour — some 4.5 billion euros last year.

    The government now plans to transfer the financial burden to households and industrial consumers in order to secure the funds for wind power and try to attract private sector investment.

    SHORT-TERM SAVINGS?

    Renewable energy meets just four percent of the Netherlands’ total energy consumption. That makes the country’s target for its share to rise 14 percent by 2020 challenging enough.

    “We have come to the conclusion that the most likely targets with the current policy to be reached will be in the range of 8 to 12 percent,” said Paul van den Oosterkamp, manager of the Energy Research Center of the Netherlands (ECN), an independent institute for renewable energy.

    • Bob_Wallace

      I have no idea what the Netherlands is doing. Seems to me that they are pretty far behind when it comes to renewables.

      Best to look at the countries that have been the leaders and then you will be able to see what is possible and what the Netherlands should be aiming for.

  • GJK

    The most efficient long term power source is hydroelectric. The major issues which face the “Grid” it synchronization of the 60 Hz sinusoidal wave which is required to maintain a perfect power sharing environment. Each source Nuclear, Coal Fired, Natural Gas, Hydroelectric, as well as small local generation systems which sell power back to the power companies, “through the grid” MUST BE IN PERFECT SYNC @ 60Hz in order to connect physically to the grid. This process connects all of the generation systems making them to appear as one generator. This requires them to be linked together through an internet type link as so to maintain this frequency at all times. Wind power is a constantly changing rotation which can vary as much as 90 percent in a matter of a minute thus requiring additional syncing issues. No where on earth has a constant wind 24/7/365. In todays world electricity demand will grow at a rate of 5%+ per year just due to the new electric devices being purchased for use by everyone. Wind power as it stands today could never meet that demand.

    • Bob_Wallace

      I have no idea what scale you are using to measure efficiency.

      But – wind and solar farms feed in through inverters which frequency lock.

      ” In todays world electricity demand will grow at a rate of 5%+ per year just due to the new electric devices being purchased for use by everyone. Wind power as it stands today could never meet that demand.”

      Actually demand is plateauing/dropping in a lot of the world.

      I have no idea how you figure that wind (and solar) could not keep up with demand growth. There are no other generators which can be brought on line as rapidly. And, for the most part, no special skills are needed to install wind and solar, it’s mostly just normal commercial construction activity.

  • GJK

    Wow as I have read all of your posts; who among you have one of these systems in their homes?? Most of you do not understand how the grid works. Looking as some of these solar panels they do not produce enough electricity (wattage) to do anything of substance. Wind is not reliable! Please study how the electric national grid works first. 2nd look at your current power consumption (Electric meter readings. 3rd note the K in front of power thats 1000 watts. In order for you to function in the 21st century you are going to be faced with even this blogging costing you too much power even consider doing it if you talking about power.
    I have had one of these backup systems which can run my whole home for the past 16 years. You all really have a lot to learn. The national power system is still the BEST IN THE WORLD. The only emergency is people who do not understand the system and those who wish to remove or reduce it in order to control you!

    • Bob_Wallace

      Wind may not be “reliable”, but it’s now our cheapest way to generate electricity. It’s so cheap and solar has become so cheap that it makes far more sense to run a grid on renewables than nuclear or coal.

      I agree that it makes most sense to stay connected if that’s an option. But you need to look and see how the grids of the 21st century will be powered.

  • Christopher Gregory Wortman

    What they don’t talk about is why you shouldn’t connect to the grid. It’s dangerous. The constant strain on your batteries creates gases that are harmful. Not to mention it greatly shortens the life expectancy of your equipment, all for a tiny pay check. They make sure not to pay enough to maintain your equipment. The constant strain also causes corrosion and failure. But they don’t want you to know it can burn your house down by being connected to the grid if lightning strikes a pole up to 10 miles away, that feedback could explode your batteries. Look up the dangers of being connected to the grid.

    • Bob_Wallace

      FUD

      • Christopher Gregory Wortman

        its not fud, also when the power goes out, and you are connected to the grid, you lose power and your panels and batteries become useless and stop working for “safety reasons”

        • Bob_Wallace

          No, Christopher. That is not how grid-tie inverters with battery backup work.

          Once the grid goes down your inverter will not feed power to the grid, for “safety reasons”, until it recognizes that the grid is once more up and operating.

          Your inverter will not feed power from your batteries back to the grid. Only excess solar once your batteries are full.

          Vent your batteries, if you’re using lead acid. You have to do that regardless of whether you are grid-tied or not.

          What harms lead-acid batteries is to discharge them deeply and leave them discharged.

        • djr417

          …and thats how Dick Cheney reads my mind and gives obama followers std’s! its all thru the grid! but on the plus side, when you stand on one leg with your tinfoil hat on and touch something metal…you can get Netflix for free!

    • Ronald Brakels

      Personally I found licking the interior of light sockets to be much safer before I connected my house to the grid.

      • jeffhre

        …Butttttt, tttthhheee grrriiiiiirrrrrrrrddddd, could kill you, LOL!

      • Offgridman

        So that’s how you get your dietary supplements, quit being such a cheapo and help out big pharma by getting your mineral supplements down at the druggist like the rest of us.
        🙂

  • Kraylin

    It seems to me that the substantial energy requirements of EV cars would be a large contributor to overall energy demand.

    The idea that large EV batteries could be the very interconnected home storage we are talking about is also intriguing. At least as an emergency backup it would be interesting to be able to remove the energy from my EV battery to power my home.

    The next 5-10 years are going to be very interesting! Thank you CleanTechnica for the articles!

    • Bob_Wallace

      EVs will mean a switch in energy demand. A decrease in petroleum use but an increase in electricity use. The great thing (aside from CO2 reduction and decreasing oil pollution) is that we will need far less energy overall. ICEVs waste about 80% of the energy in their tanks while EVs waste only about 10% of the energy in their batteries.

      You can already plug your home into a Nissan Leaf. They come with inverter and outlet.

      • Marion Meads

        It is an extremely ignorant oversimplification about plugging your home into a Nissan Leaf.

        • Bob_Wallace

          How do you figure that, Marion?

          • Vensonata

            Wow, somehow I did not realize that the leaf had that feature already. I’ve already started typing in “used Leaf for sale, Canada”. What an interesting asset for a large pv array for which we need more storage….

          • Bob_Wallace

            I’m finding statements that Nissan planned to bring that feature to the Leaf in 2012 but no indication they have.

            For a while they were running an ad for the feature. Perhaps they backed off.

          • Bob_Wallace

            And there’s this –

            https://www.youtube.com/watch?v=Zd-crZIHWYM

            Seems like they are available and being sold in Japan.

            But the Leaf apparently didn’t get the built in inverter. Sorry.

          • Offgridman

            Maybe not from Nissan yet, but it is an advertised feature from Via motors for US sales.

          • Calamity_Jean

            But the Vias are hybrids. When someone plugs in to a Via, the truck is basically acting as a generator.

            Vehicle to grid will not become a big thing anytime soon. The main value to the grid from EVs beyond being a new market for power is that EVs could act as a “dispatchable load” that can be turned on and off to compensate for short-term variations in the supply of power coming from wind turbines or solar panels.

          • Offgridman

            Yes the Via is a hybrid,, but it comes with a much bigger battery than most and can go 2-4 times the EV range of most other hybrids. What I was referring to is that it comes with inverters and can be used for home backup in a black out without running the ICE. That is one of its selling points of being able to drive to a job site and having electric power for tools without running the engine.
            Yes I would prefer too that it had even more battery capacity and was a straight EV, but it is a step in the V2G direction, as it is one of the vehicles being used at the military base in California for their V2G test project,along with Leaf’s and the straight electric delivery vans, if I remember right.

          • jeffhre

            LA Air Force Base?

          • Calamity_Jean

            Yeah, the Via’s onboard inverter is pretty cool. I want one.

          • Hermit_Thrush

            Thx for the video, Bob. It shows that the V2G concept works and will become widespread sooner rather than later. Combined with falling solar costs, it means another energy revolution is just around the corner. ;-D

    • Will E

      not in 5 -10 years, It can be done now. PV has come down to a dollar or two dollar, and EV is proved reliable, home charging. fully loaded.

      • Kraylin

        As mentioned in other comments already. Unfortunately the ability to tie your car back into your house is not readily available as yet…. I think in time it will be though.

        Would be nice to have a couple days backup stored in my car for those blackout periods (even though they almost never happen for more then a few minutes where I live)

  • Charlotte Omoto

    I would think that this should provide electrical utilities incentive to promote electric vehicles. Imagine the increase in load demand, especially when demand is low so it would tend to level the demand over the day.

    • Bob_Wallace

      Absolutely. Look at what happens to German wholesale prices on sunny days, the price of electricity drops close to nothing. (3.5 euro cents/kWh)

      Being able to sell to EVs would build in price supports.

    • GCO

      Indeed, and some do, surely understanding the potential of PEVs as dispatchable loads, ie something to dump electricity into when it’s plentiful.

      Sometimes this support is indirect: for example PG&E (Northern California) waives demand charges for EV quick-chargers.

    • Will E

      coal gas and nuke utility electricity is of no use for EV. The grid must be liberated and utilities must go renewable as Eon Germany is doing.

  • SecularAnimist

    Commenter Matt wrote: “Need to split generation from transmission and distribution.”

    Thank you. That is vitally important. We need to distinguish — conceptually, legally and economically — the electricity distribution grid from the electricity producers AND/OR consumers who use the grid.

    Once that distinction is made, it is immediately obvious that the electric grid must become like the Internet — it must become the Intergrid.

    As the Internet is a “network of networks” the Intergrid will be a “grid of grids” — intelligently, robustly and reliably connecting a diverse array of small, large, centralized, decentralized, private and public electricity consumers and producers as well as autonomous microgrids all of which can exchange power with each other as easily as computers can exchange data over the Internet.

    In this light, it is interesting to consider the parallels between the net neutrality debate around Internet access, and the debates over net metering and related issues around grid access for distributed renewable generation.

    • mike_dyke

      I agree and we’ve just had the Microsoft/PC moment when cheap PC (i.e. Solar panels) sales took off – Look what happened to IBM etc.

    • jeffhre

      We also need to separate the human waste stream from fresh water drains…opps sorry just California dreamin!

    • Willie in NY

      Willie in NY
      NY State (USA) did the split years ago. It was based on “increased market competition will lower the price of energy.” Well, didn’t work that way. The utility had two charges: delivery and fuel. The consumer could replace the utility fuel seller with an independent fuel seller — thus reaping the lower costs of market competition. Like telecommunications deregulation, there was no requirement for sellers to state “full cost with all add-on’s, taxes, fees, etc.”
      As it turns out, the lack of comparable costs resulted in the independents being more expensive that the utility. Free markets only work if fully informed.

  • vensonata

    Remember, realistically the grid itself must become solar/ wind and storage. It must happen, there is no choice. And the home owner? They can only go solar/ storage. Wind is not an option for the house. So big solar/wind storage grid for people without roofs and solar/storage for people with a house. Both will be convenient, reliable and moderate in cost. (not cheap, because people become wasteful if electricity is cheap)

    • Bob_Wallace

      I am not optimistic about home storage.

      Utilities are going to be able to buy everything cheaper because they will buy in much larger quantities.

      Utilities will need less storage to because they will have access to large scale wind, dispatchable hydro, and dispatchable loads.

      Utilities may be able to use technologies like Ambri’s liquid metal batteries which would not be appropriate for home use.

      I can see a future for home storage in a few places like Australia where the system is being run by bone-heads (is that a racial slur?) but even there conditions could turn around overnight with a change of government. Home storage would have made sense in Hawaii but now their grid is headed toward 100% renewables we should expect their costs to fall.

      And, of course, home storage makes sense when it costs too much to hook up to the grid, but folks like me area a tiny minority.

      • vensonata

        The storage issue is a big question mark. If home storage can arrive at 10cents kwh and home Pv comes in at 7 cents, they will combine, if storage is 50% of total electrical use at .5 x17 + .5 x 7 = 12 cents kwh. For a sensible house using 20 kwh/ day $2.40 day or $75 month. Basically thats good grid price.
        More about the math: Pv doesn’t use storage through the day it just goes through the battery without cycling the battery. The battery cycles once every night. and perhaps 60 times a year on cloudy days. So the battery cycle cost is battery plus pv maybe 60% of the year and just Pv about 40% of the year. The price per kwh is determined by adding together.
        So lets make it $100 month for electricity off grid in sunny Arizona. Thats close to reality…soon, maybe even today with a 30% rebate on Pv. The grid won’t be much cheaper. So we are approaching parity.
        Now the question is, what battery gives you 10cents kwh? We are about to find out, probably on April 30, with Tesla home battery announcement. Lead acid is not for the ordinary home owner, only lithium will do it. The market is huge, but the final price is uncertain.

        • Bob_Wallace

          The average US electricity bill is $100/mo. Saving $25 a month is not going to mean a lot to most people. Not be enough to cause them to deal with the energy to install and maintain a system rather than using the grid.
          Those who would most be helped by a $25 savings aren’t likely to have the resources to install a system. And are probably less likely to be homeowners.

          Grid prices are likely to fall. Wind and solar are heading toward $0.03/kWh and we’re seeing some nuclear and coal plants closing down because they are too expensive to operate.

          And after the 20 year PPA period for wind/solar these farms can rebid close to $0.01/kWh.

          Replacing expensive peakers with cheaper storage will lower grid prices.
          And your math does not included the cost of a grid connection (or backup generator).

          I’m not saying that a lot of people won’t install solar and storage. I’m just saying the math may not be impressive and may even work in the utility company’s favor.

          • vensonata

            Yes indeed, we are at that delightful stage where clean electricity is not really an economic issue. On grid, off grid, six of one half a dozen of the other.
            The one huge factor, that we may be overlooking is cheap beautiful land that is available to the no longer problematic off grid house. Frank LLoyd Wright predicted cities would wither as “independant house technology” got better.

          • Bob_Wallace

            We’re moving into a new world in which we use less energy and the energy we do use costs less.

        • Will E

          Solar PV electricity stored in warm water tank and heating the house with electric heatpump air to water, 3 years now.
          PV stored in the EV car, Im on grid but this is how I store the electricity produced by my PV installation. Net metering gets my bill zero, was for the house NG and electricity 200 dollar,
          for the car 300 dollar a month.
          saves me 6000 dollar a year.
          20 year 120000 dollar.

      • Ronald Brakels

        i think the term bone-head is just a slur and not connected to race.

        Today the largest difference range in wholesale electricity prices in all of Australia was 2 US cents in South Australia. It’s not easy to make money from any kind of energy storage when the difference between the highest and lowest prices is only 2 cents. Of course some days the difference is a lot higher, like $10 a kilowatt-hour, but there are a lot of 2 cent days in a year. The trouble for storage is these $10 days are getting less common as Australians continue to reduce their electricity consumption in the face of high retail prices and rooftop solar meets more peak demand and preserves more hydroelectric and existing pumped storage for the evening peak. So currently it is not economically impossible to build on grid storage in Australia. We would need a drop in storage costs and/or for electricity prices to become more extreme to make it possible.

        But the difference between grid electricity and the feed-in tariff for new solar in South Australia is about 20 US cents and is always about 20 US cents. This means home and business energy storage is getting close to being practical. We’re not there yet, all up we can’t install home energy storage that operates for under 20 cents a kilowatt-hour, but every year, heck, every month we get closer. Except those months when our dollar is crashing. Those months suck when it comes to the prices of German wundar boxes that store energy.

      • Doug in Hawaii

        Hawaii headed for 100% renewables??? Baloney!!! They give massive lip service to renewables in their press releases, but do everything they can to discourage it in practice. Grid tie permits are slowed to a crawl, $4,000 junk fees to connect a new installation or even to add a single panel to an existing facility, rising connection fees and declining returns per kWh. None of those things encourage growth in renewables. However, it will encourage defection from the grid for those who can afford to do so.

        • Bob_Wallace

          There are routes to 100% renewables that don’t include everyone having rooftop solar.

      • jeffhre

        Utilities will sell at retail rates though – making residential scale products more competitive if priced well. Much like utility scale solar is cheaper now – but small scale rooftop solar is competitive. Competitive because once the utilities get solar power, it’s sold at the higher retail rate.

        • Bob_Wallace

          Utilities will have to add in a distribution cost. Let’s call it 5c/kWh just for argument’s sake.

          (Argument in the science world means something like what hypothesis means in the non-scientific world, for those who might think I’m tring to start a fight. ;o)

          OK, end-user solar 10c/kWh, storage 10c/kWh, backup (generator) 20c/kWh. I’m just making up numbers. Somewhere around 15c/kWh.

          Utility solar 4c/kWh, wind 3c/kWh, storage 5c/kWh, CCNG 6c/kWh. Somewhere around 4/kWh. Plus 5c/kWh for distribution = 9c/kWh.

          Again, none of those numbers are “real”. But they may be close. And the big point is that utilities will have the advantage of wind farms along with large scale purchasing which, combined, might override the cost of distribution

          • Kraylin

            You got that backwards.
            Argument means in the NON-science world what Hypothethis means IN the SCIENCE world =)

          • Bob_Wallace

            Sorry, not.

  • Matt

    Need to split generation from transmission and distribution. With no board/management cross participation (10 year wait after leaving one before joining other) or cross stock ownership allowed. That way the distribution company can focus on how to get the max benefit for the grid from PV, instead of being worried about old coal plants. With no generation profits to worry about, distribution can public congestion point. Location where PV and/or storage can help put off upgrades. They would be much more likely to develop a model that supported storage.

  • Will E

    I see no transition of utilities going to provide cheap Solar and Wind Power in the article. Eon Germany, not a small company, split up in a FF company and a renewable company. nuclear coal and gas assets and decommission cost will be for the State taxpayer in the future. ofcourse they dont say so.
    Eon renewable will provide cheap Solar and Wind Power and Storage and Services to customers.
    The grid is liberated.

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