Network limits on solar, storage could accelerate “death spiral”

Newly introduced limits on rooftop solar and battery storage capacities for households are likely to spark innovative solutions that will effectively accelerate the so-called “network death spiral”, according to one of the leading lights in the Australian solar and storage business.

Glen Morris, from SolarQuip and a director of the Australian Storage Council, says the new standards will likely encourage households to “hide” multiple circuits from the grid.

That’s because it will be cheaper to take many appliances and circuits “off the grid” rather than pay extra money to meet network requirements, which limit total solar and storage and inverter sizes to 5kW.

The new standard is a guidance and may or may not be enforced by individual networks, and the solar industry is seeking clarification of exactly where each network sits.

But where it is imposed, says Morris, it will likely encourage households to install UPS systems that take at least part of the house off-grid. And it seems that some networks, such as Ergon and Energex in Queensland, are happy for that partial grid desertion to occur.

This diagram above roughly explains what is proposed. The area to the right – surrounded by the dotted line – is effectively off grid and operates as a UPS (uninterruptible power supply) system.

Morris says it is an attractive option for those people who think that the only choice is to go off the grid altogether, or who think they have no choice but to pay extra charges to upgrade to a three-phase system.

The pitfalls of going off-grid, and choosing the right equipment and configuration, was highlighted in our story on Wednesday about the problems faced by “off-grid guy” Michael Mobbs with his inner-city system, a story that has sparked vigorous debate about how people should look at off-grid options.

And RenewEconomy contributor and ITK analyst David Leitch also wrote about how the new solar standard would affect homes such as his, and why he faced significant extra costs because of his wish to expand his rooftop solar system from 4kW to more than 6kW.

Morris says there is a middle path.

He suggests installing a separate switchboard which runs much of the appliances in the home, and has its own solar panel, inverter and storage. Some appliances, and the house is still connected to the grid, and when the solar and battery storage on the new switchboard runs out of power, it can still draw from the grid.

Households will pay for the privilege of using the grid as a back-up, with fixed grid costs at around $1.50 a day (more than $500 per annum) in regional NSW, for instance.

The advantage for existing solar households, particularly those still on premium tariffs, is that they can add more solar and storage on a new switchboard and continue to receive those tariffs from the original system.

For those, like Leitch, who want to add solar and storage to an existing system, it means they are not obligated to pay thousands more for an upgrade to a three-phase system.

“I think these new rules will force people towards it, and these systems are not very expensive,” Morris says. The price for UPS inverters are around $1,000 to $2,000 – and for not much outlay people can take part of their houses off grid, he says.

And then, further down the track, if network charges continue to rise and solar and storage costs continue to fall, they can take their whole house off grid.

“This is an engineering decision,” Morris says of the network ruling. “I don’t think they have an agenda here. They are engineers …. but the implications are that it could cause people to slide off the network, a little bit at a time.”

Note: In another development, Morris also warns that the Clean Energy Regulator has made is “very clear” that if households are creating STC’s (renewable energy certificates for rooftop solarby upgrading any solar PV system (even replacing faulty panels) then the whole system needs to be brought up to current standards.

“Even though distribution businesses and state energy safety regulators may not require this, if creating STC’s then you have signed a form stating, “the whole of the system complies with Australian Standards and local regulations”.

That has implications, he says, because some older systems may not have conformed to more recent fire regulations and other standards, and may have to be upgraded to meet those new requirements.