Hybrid solar: How to kiss the grid goodbye

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Don’t get angry with your energy retailer, get even! Can suburban houses gain energy independence? Welcome to Grid 2.0.

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If ever there were a need to develop off-grid power systems it would have to be now, when transmission costs are now up to around 60 per cent of non-solar power bills.

Solar systems have historically been classified into two broad camps – “grid connected” or “off-grid” systems. This distinction has arisen due to historical segments of the market that needed solar to do different things. The vast majority of systems we see around Australia’s towns and cities are grid connected and have been driven by feed-in-tariffs and consumer desires to cut electricity costs and do something positive for the environment.

Off-grid systems have historically been the preserve of regional customers seeking to avoid expensive network augmentation costs to provide power to their remote locations. Off-grid systems are usually a lot more expensive as they require battery storage, more complicated control technology and often diesel backup generators to ensure the lights will always shine. Battery technology has also been a culprit as the memory effect of old-style lead-acid batteries has meant that battery arrays are oversized to ensure the depth of discharge is not high and hence battery life is extended.

An emerging trend though is for so-called hybrid systems which take a little from column A, and a little from column B. Such systems could either be described as an off-grid system which uses the grid as the standby generator or a grid-connected system with some added battery storage. Either way, these systems don’t require expensive diesel generators since the grid provides that service, and the size of the battery arrays can be downgraded as the cost of back-up power using off-peak grid electricity is much lower than that provided by diesel generators.

The technology that is making this possible is a new generation of products capable of directing energy flows as the consumer best desires. One such product is the PowerRouter which enables the home owner to optimise, control and manage any self-generated electricity. A homeowner in NSW appalled by their retailer’s offer for solar buyback, for instance, could arrange for excess solar yield to be diverted to their batteries for use at another time when electricity prices are higher. The batteries could also be re-charged on off-peak tariffs and re-used during peak periods as a straight arbitrage opportunity.

Another technological development is occurring in the battery sector with heavy investment by the auto-makers looking to reduce battery size and extend life using lithium-ion based solutions. Importantly, Li-ion batteries have no memory effect, so battery arrays can be better sized to suit demand. Intersolar fairs these days are increasingly showing attractive, compact and affordable Li-ion battery solutions capable of helping consumers make the jump to these hybrid systems. The introduction of electric vehicles with batteries will add another exciting dimension as the household battery storage effectively gains wheels and becomes mobile.

So where is this opportunity apparent in the Australian context today? There are probably three broad consumers to whom this hybrid model would appeal:

My grid keeps dropping out! Many solar consumers ask the question about what happens when the grid goes down? Unfortunately the answer they get is “so does your solar system in order to prevent injury to electrical line workers”. Having a hybrid model appeals to consumers who are looking for higher levels of reliability than their existing supply. A hybrid model would allow the home to effortlessly switch from solar to grid to battery as the need arises on a least-cost basis.

I hate my retailer, how can I get them back? Spite is a strong motivator and many consumers have just had enough of traditional electricity retailers. While the cost of completely switching off from the electricity grid (i.e. an off-grid system) is probably cost-prohibitive for most householders, installing a hybrid system would be a lower cost since there are no back-up generators and less battery storage. The original intent would largely be delivered.

The network won’t let me expand! Many consumers, especially businesses in regional locations, are constrained in their growth due to limitations imposed by the electrical networks. One recent customer owned a coffee shop in a small suburban Sydney shopping centre. The grid operator would not provide them with the 130A supply it needed without an expensive upgrade to a substation. The landlord and the shop owner went halves in a 10kW system which reduced their peak demand to the allowable 80A through a system of batteries and recharging off the grid when power is available. The system cost half as much as the substation option and will pay for itself in around 7 years – compare this to the sunk cost of the substation which would only make a return for the grid operator.

The larger policy implications of this shift are interesting. In 1999, the term Web 2.0 was offered forward as a description of the cumulative changes taking place in web development which facilitated greater collaboration, interoperability and information sharing. These days, more and more content on the web is user-generated and the nature of how we use the internet is vastly different from the embryonic, static website version of the 1990s.

Increasingly the electricity grid is moving towards Grid 2.0. Eventually, the networks will cease to become simply a delivery mechanism for electrons to your home and will morph into a shared network designed to help each energy user effectively manage their surplus or deficit of electrons to meet their needs. With this will come enormous changes to the business models of the network operators as customers gradually become more and more self-sufficient and use less and less from the grid.

The immediate response from network operators will most likely be higher peak demand charges to reflect the (in)tangible economic benefit offered to customers through the grid acting as the standby generator. As these charges start mounting, however, this will only encourage consumers to go the whole-hog and take their homes completely off-grid, thus completely avoiding network charges. Inevitably this will leave the grid a stranded asset – similar to the telegraph poles dotting the country side.

The response from networks operators should be more collaborative and understanding of the market dynamics and accepting of the new role they will likely have to play. This will involve changes to the asset’s valuation and pricing regimes – no small thing – but in the end will deliver better outcomes for society, the environment and energy users.

Jeff Bye is head of CBD Energy’s solar division.

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13 Comments
  1. Chris Fraser 7 years ago

    Jeff, i believe factors that network operators need to consider (hopefully to forestall potentially vicious reprisals via tariffs) is the fact that small distributed PV generators – along with consumers topping up batteries at off-peak times and sharing energy amongst themselves – tends to create a more diffuse, even spread of energy across the network througout the diurnal cycle and during high demand times. In this way, there should be less stress on the system, fewer choke points, fewer infrastructure upgrades due to demands of aircon and fewer load-shedding blackouts. Surely, unless owned by a malevolent government, they will know we are all on the same side. Otherwise may a well-read contributor prove my thesis wrong.

    • James Taylor 4 years ago

      This maybe an old thread but the maths remains the same. If you are an electrical retailer, your best bet is too price your power such that battery hybrid systems are not economical. I wonder if the retailers will listen to their mathematicians?

  2. Tim Buckley 7 years ago

    Jeff
    Great article.
    Maybe we should remind the tax payer owned grid operators, and the electricity genretailers like AGL, that the same issues you raise occurred in another regulated industry, and the end result is worth repeating. Telstra has underperformed the ASX for most of the last decade, much to the dismay of a couple of million of Australian tax payers who trusted the government and took up the Telstra II and Telstra III offers. Telstra was left with a stranded asset in the form of an outdated copper fixed line system as everyone moved to mobile phones. If the Australian electricity system does not change with the advent of these new technologies, customers will inevitably exit the grid rather than be on the hook to help fund the $45 billion grid upgrade required. That will certainly be the equivalent of a regressive tax (to cite AGL back to itself), given it will be the poor who can’t afford the capital cost of a smart meter, battery and solar system.

  3. Alistair 7 years ago

    If batteries can follow the price decline curve of solar panels, I can see a mass movement to hybrid or completely off grid systems.

    Jeff mentions PowerRouter, so it is worth mentioning Selectronic Australia. They have been making inverters for hybrid systems for years, and their products are manufactured in Australia.

  4. Nick 7 years ago

    We have a grid-connected system, but we are limited to 3kw, because of the poor quality of our grid connection.

    Therefore 3kw is currently our peak production, so Is there a hybrid system that will allow us to fit more solar panels, but limit our output to the grid to 3kw so that we could maintain that 3kw to the grid for the majority of days ?

    We could either store any excess in batteries, or dump it into heating water, etc.

    Thanks.

    • Lindsay 7 years ago

      Hi Nick, i think the Selectronic SP PRO can do what you are looking for, it has a huge degree of flexibility, talk to Selectronic.

    • Rob 7 years ago

      Hi Nick,
      the PowerRouter allows you to install more panels, and limit your export to the grid to avoid grid problems, and use the PowerRouters Local Out to keep you with power when the grid fail during the day, WITHOUT batteries! You can always add batteries later to provide Power any the grid fails.

  5. paul 7 years ago

    HI Jeff, good story here. You mention one product on the market that can do what you are saying, but there is the all Australian made SP PRO that can do this. In addition It can be programed to support the grid or even lock the grid out during peak energy times. Visit their web http://www.selectronic.com.au

  6. Martin Nicholson 7 years ago

    Cost will be the barrier for most users today. Battery systems are very expensive (I know I have one to protect against grid loss) and I suspect battery costs will not follow the cost curve of solar PV without a significant technical breakthrough. There is plenty of incentive to develop low cost modular electrical energy storage so there are plenty of organisations working on it.

    Once the price point is competitive with grid costs then it will probably happen on significant scale. It has a long way to go today.

    • stuart duthie 7 years ago

      I tend to agree with Martin. Correct me if I am wrong, but distributed storage looks to me as if it will be prohitively expensive.
      As of 2nd April solarbuzz is quoting in the US a price of $213/kwhr of storage. To get a respectable life (say 2000 cycles) out of the batteries one would have to limit the depth of discharge to 50%. Thus you would need over $400 of deep draw batteries to store/ utilise 1 kwhr of electricity ona daily basis for a little over 5years. Thus the storage cost (before financing charges etc) would be around $0.20/kwhr which is probably more than the PV generation cost. By comparison pumped hydro storage costs are closer to $0.02/kwhr.
      The Power-router is a very smart piece of kit but doesnt appear to make much economic sense when operated in self-use ( as opposed to export to grid) mode in the Australian context.

      • Chris Fraser 7 years ago

        Thanks for your calculations, Stuart. I don’t even think 20c/kWh is expensive if you consider that you could be drawing from your battery at peak times when your smart meter is charging you 42c/kWh (depending on retailer). However what I am very concerned with is the losses in the discharge cycle , such as losses going in, losses going back out, and then losses generating 240v AC with your Power-router. Any thoughts on this ?

        • stuart duthie 7 years ago

          In the case of competing with 42c/kwhr retail costs of power from the grid a power router and lead acid deep draw batteries operating with rooftop PV might be getting fairly close to being competitive.
          However in general I suspect it will requirea revolution in battery technology before distributed home storage and PV can compete ditectly with the general retail cost of circa 20c/kwhr ( although this is likely to rise in the next few years).

          However perhaps that revolution in battery technology is closer than we think. Solid state Li-ion batteries are touted by their developers as being half the cost/Kwhr of traditional Li-ion batteries but more significantly, for this application, having a lifespan of tens of thousands of cycles.
          They are also claimed to have 2-3x the energy density (kwhr/kg)of traditional Li-ion batterys. This would go a long way to improving the functionality of Battery powered vehicles.

          See http://www.planarenergy.com/

          Lets hope the claims are accurate.

      • Joshua White 4 years ago

        The trick is to juggle your usage.
        Plenty of cheap solar panels running fridges/freezers all day and not at night
        (There are other mechanical options to improve performance ~ eg. properly-placed/ventilated/insulated fridge/freezers.)
        Use of a small demand-start generator for running short-term heavy users like microwaves, power-tools, washing-machines, etc.
        …and in that way the battery-bank needs only run a few lights, TV, computer, etc.

        I’ve been living like that since the early 1980s, and made it v work even when equipment was very primitive and very expensive.
        These days it’s a doddle.

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