jhm
Well-Known Member
That's really nice. I was not aware of that tool. Too round this out, one can use gas for heating, so that electricity consumption is close to 20kWh/day in December. 21 kWh of Powerwall gives coverage for a day. I would still feel a little more comfortable with a 1 kW generator. Cost system
$24000 8kW PV, Inverter, Inatallation
$ 6500 21kWh Powerwall, Installation net ITC
$ 1500 1kW Generator, Installation
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$32000 Total
$1982.52 Annual payment on 30 year loan @ 5% interest
12000 Annual kWh
16.52 c/kWh LCOE excluding fuel
25 c/kWh fuel $3/gal / 12 kWh/gal
This is pretty good, but I've introduced some financial sleight of hand. The batteries and generator are not expected to last 30 years. Depending on use the batteries may last 10 to 15 year, but when they are replaced they will cost much less. Moreover I would expect more batteries and PV to be added as prices fall to reduce the consumption of fuel. These increments may actually reduce the average cost per kWh over time, and replacement components may be thought of as a natural escalator. Also the 25 c/kWh is a pretty good motivator to persue energy efficiency projects over time.
I think 16.5 c/kWh plus fuel is pretty fair. It's not too far above residential rates in many places the US. Thus, we can see tenuous the situation is for the utilities. The batteries and generator is only 25% of the cost of the system. Without them, we are looking at a $1487/yr or 12.3 c/kWh. This is pretty good if you have a decent feed in tariff. But if is a utility ditches net metering or adds extra fixed costs then going of grid adds just $496/year plus $200 - $500 /year in fuel. So if the utility is trying to push $1000 of cost per year back onto this customer, they go off grid. A customer with an 8kW PV system is not going to tollerate a $85/month utility bill. A customer with PV + battery is not going to tollerate a $50/month utility bill. Add to this the sense of being penalized and disrespected by the utility, and it is not hard for frustration to trigger defection.
The barrier to defection will only decrease as utilities raise rates and solar and battery costs continue to decline. It is also worth noting that in this set up the utility has considerable oil price risk. Suppose at $3/gal one's fuel cost going off grid is say $600 per year. This cost is part of the barrier to defection. But if the fuel price drops to $2/gal, your barrier just got $200/yr smaller. This may just be enough to reach one's tipping point. So the longer view is that within ten year the barrier to defection vanishes, but along that path a single year or two with a severe down tick in oil or uptick in utility bills will turn the tide. A key matketing strategy for SolarCity may be to pounce on any particular utility rate increases and to educate customers about how to integrate batteries and generators into their PV systems. Investors may want to know how oil price declines may have an adverse impact on utilities while strengthening rooftop solar. Currently the market wants to devalue solar as oil fall, but if gasoline, diesel or natural gas comes down hard enough to liberate residential ratepayers from the grid, then onsite solar would be a huge beneficiary. It is not as if the utilities can pass along enough fuel saving to residential ratepayers to induce them to stay. The problem for utilities is too much fixed cost in the grid that they expect to recover from ratepayers. I think we are still a few years off from this. Powerwalls need to become widely available and come down 20% or so. This development would coincide with more downward pressure on oil prices, specifically coming from a growing EV fleet and batteries offsetting power generated from oil.
So three years out or thereabouts, we could see oil fall below $25/barrel ushering in massive grid defection. This is just one possible scenario. But know that in part of Australia, utilities have added fixed charges to residential plans in order to try to stem the tide of rooftop solar. These fixed charges are quite regressive against ratepayers who consume less power. For example, a resident that consumes only 7000 kWh/yr may wind up paying 0.72AUD/kWh or 0.52USD/kWh. This is well below the cost of home generators. So it is ironic that in an attempt to suppress rooftop solar these utilities have created a rate plan that leaves them highly exposed to low oil prices. This creates an alternative path to yet more solar: get a generator, go off grid, install PV to offset fuel consumption, install batteries to offset even more fuel, iterate until practically no fuel is required. Get out the popcorn, this should be fun to watch.
