Household battery storage to be economically attractive by 2020: ATA | RenewEconomy

Household battery storage to be economically attractive by 2020: ATA

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Battery storage could be economically attractive in Sydney and Adelaide as early as 2018, and elsewhere in 2020.

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Battery storage could be just five years away from being an economic no-brainer for some Australian solar households, according to a new report which predicts grid-connected battery storage will be economically attractive for many homes from around 2020.

The report, released on Monday by the Alternative Technology Association, says Sydney and Adelaide could be the first cities to arrive at this point – as early as 2018.

But the report is also careful to stress that the value of adding solar with storage will vary from household to household, and state to state, depending on a number of key metrics, including the household’s size, its location, its consumption patterns and the kind of tariff it is on.

“At today’s prices, most Australian households won’t be able to achieve a 10-year return on their investment – which is the typical lifetime of a well-designed and operated battery system,” said ATA policy and research manager Damian Moyse. “But by 2020, this will change for an increasing number of homes.”

To try to work out which homes, exactly, the ATA tested the value of adding batteries to a new grid-connected solar system across a range of different scenarios.

Using the ATA’s Sunulator solar-with-battery economic feasibility tool – a new technology to be launched on Tuesday in Melbourne – the study included 10 different locations, electricity consumption data for typical working couples and young families, three different grid tariff types and different sized solar systems.

The results revealed that in nine scenarios across six locations a 4kWh battery improved the net present value (NPV) for the “Young Family”. As you can see below, households from only two locations – Sydney and Adelaide– achieved this with investment in 2018. The remainder involved investment in 2020.

Screen Shot 2015-11-16 at 1.47.32 pm

The graph below compares the net present value of solar only systems (4kW) in each location in 2020, as well as solar plus a 4kWh battery; and solar with a 7kWh battery, for young families on a flat tariff.

Screen Shot 2015-11-16 at 12.01.23 pm

Overall, says the report, “investment in 4kW of solar PV on its own was financially attractive for larger energy homes – but not for those who have lower day-time consumption.

“Adding batteries did generally deliver savings over the ‘solar-only’ systems,” the report added – with annual savings
ranging from $132-$335 for a small battery and $187-$513 for a larger battery, dependent upon household type, location and grid tariff.

The study also found that the smaller 4kWh battery was always more attractive than the larger 7kWh one; and in no case did adding batteries significantly speed up the solar system payback time.

The following chart shows how different solar and battery system combinations work with different tariffs, and how much they save on electricity bills for a “young” Sydney family in 2016.

Screen Shot 2015-11-16 at 12.20.14 pm

Of course, the report found that “smarter” battery systems – which could work with a given household’s time-of-use tariff to maximise both cheap energy storage and solar self generation – would deliver greater savings, especially if they incorporated weather forecasts.

“It remains to be seen when batteries this smart become available in Australia,” the report said.

The report also found that the economics of investing in storage would obviously be improved if households were paid to provide and share in associated benefits to the electricity grid.

The chart below analyses a scenario where an energy company co-invested $300 per kWh, off-setting the solar
household’s upfront costs.

Screen Shot 2015-11-16 at 1.40.20 pm

ATA suggests energy companies could co-invest in such systems, for example, by selling batteries cheaply to households and, on critical days, could control the batteries remotely, discharging them at peak times.

Likewise, though, it remains to be seen when energy companies this smart will become available in Australia.

Until that time, or until batteries drop further in price, the ATA suggests households try cutting their bills through more effective investments, including LED lights; gap sealing, insulation and window shading; efficient appliances; ditching the gas network; and solar without batteries.

Finally, the report calls on Australian consumers to get to know their own energy profiles and to embrace energy efficiency.

“There’s a lot of hype in the community about battery storage, and while we think it is a great thing, we urge people to understand their own electricity consumption patterns and choose the most suitably sized and designed solar and battery systems,” said Moyse.

“Different consumption levels and different lifestyles require different solutions – no one size fits all.

“Having a more energy-efficient home will mean you need smaller sized batteries, which will ultimately be better for your overall energy costs and the environment,” he said.

“Batteries need to be considered in the context of an overarching, holistic energy management approach – whether that be for a household or business.”

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  1. Jacob 5 years ago

    This really makes no sense.

    Getting electrons from solar panels is cheaper than from the grid already.

    And the graphs indicate that voters in South AUS will quit the grid before voters in Hobart.

    So perhaps it is 2016 in South AUS and 2020 in Hobart.

    • Andrew 5 years ago

      Yes solar is a good deal, as shown in the blue bars in the second chart in this article.

      But the question is whether adding batteries is worth it.

      The report isn’t about quitting the grid.

      • Jacob 5 years ago

        So then why add batteries.

        • Andrew 5 years ago

          Batteries reduce your bills by saving your excess daytime solar for you to use in the evening.

          Say you save a few hundred extra dollars a year. If the battery costs $3,500 then it’s not really worth it. But when the battery gets cheaper then it *is* worth it.

          Some people will add batteries to keep the lights, fridge and internet going in a blackout. Some will do it just because it’s cool. 🙂

          • Jacob 5 years ago

            So during what hours would you discharge the battery.

          • Andrew 5 years ago

            Most grid-connected batteries use a sensor in the meter box, so they charge up whenever you have excess solar (avoiding exports to the grid), and discharge whenever you have a shortfall (avoiding imports from the grid).

            If you are on a Time of Use tariff with high “peak” charges in the evening, it’s a good idea to set the battery so it doesn’t discharge until the peak period starts. That’s if your battery has timer controls.

          • nakedChimp 5 years ago

            For that to be viable the grid would need to stop developing ‘connection charges’.. but last time I checked those did go up.
            At the moment it looks like 100% quitting is the only viable option, but probably not a remarkable money saver.

          • Andrew 5 years ago

            nC, yes connection charges are a problem. In the report we assumed they increase at 1% per year into the future, and energy charges decrease 1%. That’s one of the reasons grid-connected batteries don’t give massive savings.

            But there are still savings to be had, as shown in the report.

            If you quit 100% you have to get through a cloudy winter week. That’s expensive, needing a much bigger battery, lots of solar and probably a generator too. You’ll be wasting lots of solar in summer because you can’t feed it into the grid.

          • Mike Dill 5 years ago

            Andrew, I agree that getting off-grid is somewhat expensive, but I think that you are exaggerating the costs. Yes, I will need a backup source of power for the extended cloudy days, but with one day of storage, based on the results from my panels, I would have needed a generator for 20 days last year for about 4 hours per day.
            Currently the grid access charge is a third of my bill, and would pay for the generator in about 4 years. When it goes up again, If the cost of storage continues to plummet, I will be seriously considering going that route.

          • Andrew 5 years ago

            Ok that’s great! Can I ask where you’re located, and how much electricity you use per day in kilowatt-hours (kWh)?

          • Mike Dill 5 years ago

            I am in Las Vegas, and during the summer (40C or more) my AC is running nearly all the time. My summer usage is about 38KWH/day and my winter about 25KWH/day (heat pump AC unit). I had seven days last summer where the panels produced less than half of average, and another 25 in the winter. With a 7kw array and 25KWH of storage, I would have needed about 500 kwh for the cloudy days, and would have had about 900 kWH of ‘excess’ generation (mostly in the summer).

          • Andrew 5 years ago

            Interesting! Constant AC would be a nice steady load to supply. Here in Oz a good 7kW solar system costs about A$10,000 (depending on location). We’re expecting 25 kWh of batteries to cost around $20,000 at Powerwall prices (cheapest lithium announced so far, not available yet). Then we’re looking at say $7,000 for a good inverter-charger and maybe $5,000 for a good electric-start diesel generator. Plus labour etc.

          • Mike Dill 5 years ago

            Currently I have 4KW on my roof. From a purely economic perspective, the other $35k of hardware would take about fifty years to amortize based on those prices and my current electric bill.
            As I do expect the prices for both sides of the equation to change in the next few years, I am looking forward to adding some pieces to get closer to net-zero. One step will be 10KW of batteries to eliminate all of the electrons I send back to the grid. Another 3KW on the roof would put me over net-zero averaged over the entire year. The other pieces and getting entirely off-grid will depend on the economics.

  2. GlennM 5 years ago

    It is good that people do these analyses..

    But in reality no one can predict solar costs five years from now…let alone battery costs.Battery deployment is in an exponential growth curve, and solar costs are still coming down very fast. Doing a calculation with such crossing curves could easily be out by 300%. Then add in a major technical breakthrough and all bets are off.

    It would be easier to predict the Melbourne cup winner in five years time.

    All that can be really said is that Solar is good value even now and will only get better and batteries still have someway to go on costs for the majority of people.

    • Jacob 5 years ago

      Solar is a money saver now and has been for years in sunny places like South AUS.

      And Mr Musk is making 340 watt solar panels now. By 2020 the world would be making 400 watt panels.

      Such panels dramatically reduce the roof space required.

    • JeffJL 5 years ago

      Number 7.

  3. Andrew Woodroffe 5 years ago

    All of this appears to be based on the current situation – current tariffs etc. At some point, the network operators will work out the value of behind the meter batteries to them. Particularly if those batteries are located on rural properties. Even in the major cities there is still a significant value in flattening demand peaks.

    The real discussion ought to be about who pays what and where. PV and batteries behind the meter have the ability to dramatically the reduce the demand on sticks and wires by flattening the load profile.

    It not about whether a customer should be able to install batteries but how much will the network operator pay them to do so.

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