Do batteries make sense for your solar system?

I want to talk about batteries. And the question is whether or not batteries make sense for somebody putting solar on their home. And batteries are a hot topic. There’s a lot of things in the news about them and the fact that you can eliminate your bill entirely and so forth, but does it really make economic sense? That’s the question. So there’s cases when it does and cases when it doesn’t. So I want to give you an overview of what it is that they’re actually doing, first of all, so that you have got enough information to work it out for yourself.

How much solar power do you get?

So what solar is doing is, first of all, on an ideal day, solar will produce power in a bell-shaped curve like this, hovering around midday. There’s things that can make this change. It’s more in summer, it’s less in winter. If you’ve got panels that are facing west, this curve will move. If they’re east, it’ll move this way, and it’s very rarely actually this perfect, so quite often it’s up and down and all over the place, but this is a general solar production type graph. And of course, every house has what’s called a pattern of consumption, so on any given day, you will have some between, say, midnight and midnight, you’ll have some stuff that’s on already, you’ll wake up, you’ll cook breakfast, watch TV, do whatever.

How much power do you spend?

Let’s say you went to work, and it stayed flat all day with your consumption. This is the case for a lot of people who are looking at solar. Then you come home, cook, watch TV, do whatever, go to bed, it goes down again. So you map these two on to each other, and what you’re left with is a couple of things happening. This is power that’s being used from the grid. As is this. This amount here is called self-consumption. And this is exported. So if it’s exported, you get paid a little bit for it, on what’s called a feed-in tariff. Might be 10 cents, 16 cents, 20 cents, they vary according to your retailer.

What a battery will do?

For an extra investment in a battery, you can store this power here in a battery, and then it gets used here. Now, depending on how you’re using power, maybe that carries you all the way through and gives you all of your night time use, maybe it doesn’t. But you’ve always got the grid. So basically, if you’re not using solar or batteries then you’re using the grid.

the question is, is there enough of a difference between exporting this power and using it here to justify batteries? And there’s two reasons for getting batteries, really. One is economic, because you want to save this power and not pay for power in the evening. The other is as a back-up against blackouts. So it depends how often blackouts happen in your area and how important they are. So for some people, you might have a blackout during the day, you’re not at home, doesn’t matter. You come home and your oven clock is just flashing. If you’ve got an aquarium full of tropical fish, maybe a blackout is really, really critical, because if the temperature rises, they all die and you lose thousands of dollars worth of fish. There are lots of different reasons. So for businesses, it matters too. Look obviously, imagine being in the frozen foods business. You may not have batteries, but you may have a generator that kicks in.

ROI of Solar Batteries

The question is, is there enough of a difference between exporting this power and using it here to justify batteries? And there’s two reasons for getting batteries, really. One is economic, because you want to save this power and not pay for power in the evening. The other is as a back-up against blackouts. So it depends how often blackouts happen in your area and how important they are. So for some people, you might have a blackout during the day, you’re not at home, doesn’t matter. You come home and your oven clock is just flashing. If you’ve got an aquarium full of tropical fish, maybe a blackout is really, really critical, because if the temperature rises, they all die and you lose thousands of dollars worth of fish. There are lots of different reasons. So for businesses, it matters too. Look obviously, imagine being in the frozen foods business. You may not have batteries, but you may have a generator that kicks in.

basically the economics are that you’ll invest a certain amount in a battery. And there are a range of companies that provide batteries, everybody from Tesla to Sonnen to BYD, LG Chem. They all use quite often it’s a similar chemical solution, which is lithium-ion. The interface and the look can be different, but you’re basically putting power in and doing what you call load shifting. So, my personal take on batteries is this. The cost of putting power into a battery and taking it out over the lifespan of the battery varies from, say, 20 cents per kilowatt hour. All the way up to 30-something cents per kilowatt hour. So if you are only paying 28 cents per kilowatt hour, batteries are not going to be a slam dunk economic proposal for you. However, some people in Sydney pay 50-something cents per kilowatt hour in the afternoon. So if you’re in an Ausgrid area, which is Sydney and Eastern suburbs and up and down the coast, then you’ll probably pay between 2 o’clock and 8 o’clock 50-something cents per kilowatt hour. Because of that, batteries can actually have an economic case quite quickly.

Conclusion

If you’re curious about it, sometimes it‘s really easy to say, “Oh well, it makes sense to store all of your power. That way I’m independent.” That’s great, that’s kind of an emotional reason for doing it, but if you want a numerical reason, then let’s talk about your bill, your rate of power, your pattern of consumption, and we can actually help you decide whether or not batteries makes sense for you. And if they do, we can talk about some of the solutions, whether that’s Tesla or BYD or LG Chem. So we have a lot of knowledge in batteries, both on residential projects and also commercial. So, happy to talk about this, but our goal is to be as objective as possible, and not just say batteries are great, which a lot of companies do. So we look at it from an analytical point of view. Look forward to talking about batteries with you.