Pros and cons of Labor's home batteries scheme

As Noel says. Just before the cyclone struck it was very cloudy so there was no solar gain. That statement says it all. Solar only works part of the time which is useless. Lets have nuclear electricity and be done with it. Works all the time.
Kevin

The ALP’s solution to everything they fantasise about is to subsidise it (ie, pay for something with other people’s money). And they don’t like means-testing this welfare either! No wonder energy (and other) costs just keep escalating (along with government debt).

The Wholesale cost of Lithium batteries is now $100US a KW. It is ludicrous to be paying $10-15k for a 10kw Tesla battery. A 60kw Tesla vehicle goes for about $60k, so you're paying for the batteries and getting the car for free. This scheme is going to increase demand for batteries, bring more players into the market and see the cost of batteries drop considerably. The economics change considerably when you are paying $5-8k total to have a 10kw battery installed.

You've also conveniently left off the ability to access wholesale power markets as some other commentators have mentioned.

What this analysis misses is that the benefit of a battery isn't using your own solar, it's in stabilising the grid. You get this via time of use pricing, especially combined with an EV e.g. via Amber.

No, doesn't work if you're paying 30c/kWh. But in SA at least, excess electricity from rooftop solar in summer can push prices down, even into negative territory. Used intelligently, it can be a windfall. My daughter calculated that her average electricity cost is now 3c/kWh. It made the choice of ICE or EV for their new car a no-brainer.

This is coz of structural issues in the system, but if (and it's a big if) enough home batteries can be installed to avoid building a new gas generator, it's a saving of billions - and that's passed on to everyone via the daily supply charge.

You can also charge the battery cheaply from the grid during the day if you don't generate enough surplus from your panels, then use that to avoid expensive peak rate prices, so the annual savings will be greater and repayment time shorter.

The argument about fairness is a red herring; more batteries is good because it allows more renewable energy to be stored for use after dark, which reduces the need for coal-fired power and allows coal power plants to be retired sooner.

We certainly need more grid-scale storage too.

I think as some have alluded to, it's not so cut and dry as you're not taking into account the evolution of energy consumption.

If you get a battery, you're far better off joining a VPP (Virtual Power Plant) and accessing the wholesale market of the national energy grid. This creates a larger arbitrage opportunity rather than paying 30c or not. More like buy sometimes at 5c or less in the day (one I was paid to consume) and sell at 30c or more at peak evening... I've managed to make >$20 per kilowatt once in a blue moon.

The way it's been described to me is that as fossil fuel plants get retired/closed with nothing sufficient to replace this - especially when the sun goes down, it can only get worse and the Government will be begging us all to uptake else see larger price swings/higher fixed rate costs.

The point is, the same way Australia has evolved into EV uptake, energy retailers will have to adapt or lose market share to newcomers who give battery ownership a far better payoff period. Very back of the envelope is my recent adoption of batteries and moving to Amber Electric - so far I'm at 12% rate of return compared to my previous retailer costs. Bring on V2G!

Finally, there's a few comments that as taxpayers it leaves us all footing the bill... yes and no... the price spikes could theoretically be reduced if more were to sell energy to the grid at peak and in turn, lower energy prices for everyone. Perhaps not such a dramatic reduction, but it counts for something.

https://www.amber.com.au/blog/what-renters-and-homeowners-need-to-know-about-batteries

Excellent article...
One of the best I have read about this subject .The numbers do not add up. At present panels produce around 480 watts each .I am told that when these are all gone ,New ones are around 600 watts ,so each year panels are getting more efficient.
What will they be in 10 years when your battery is due for replacement .That would no doubt apply to batteries as well ,getting cheaper and more efficient .
The missing point in all this is you can Never STOP PAYING THE SERVICE CHARGE ...........AT PRESENT AROUND 90 CENTS PER DAY AND CLIMBING.............

It doesn't even take into account the interest you could earn on the money!! Great analysis Noel!

Well I must say my experience with solar and batteries has been considerably more positive. I upgraded last year an existing solar-only system to more solar + a battery. The extra 10kw of solar and a 16kw battery was a bit over $20k. I calculate I am saving about $4k a year since installing the system. So that's a 5 year payback.

To make the numbers work I think you need:
1)Relatively high consumption -- we have a 5 bedroom house with AC, pool etc so we use a lot of power
2) Lots of solar -- panels are cheap you wan to to charge the battery every day, not just 200 days per year. It's very rare that I don't charge the battery fully each day
3)Use Amber or a similar retailer that provides wholesale prices. This comes with risk because the price can spike but the battery neuralises this risk. The end result is lower prices and higher feed-in. Last month our usage price averaged 27c but the feed in was 15c. And we used very little from the grid. The only way to get this higher fee- in is to have a battery that can discharge to the grid at peak prices. I have made over $80 in a day on peak days when prices spiked. Doesn't happen oftern but it pays for the rest of the month when it does.
4) Shop around for a good deal. Prices vary widely. I ended up going with a Chinese brand that was quite a bit cheaper than Tesla. So far so good. Time will tell of course.

Batteries: Household or Utility (community / grid)?

My guess is that household batteries are the most expensive and thus least cost and performance effective, but most politically effective.

My modelling of solar +/- battery shows a 'saving', after competing investment, depreciation and damage risk, of about $300 / y.

That the returns are so small shows that function point comparative pricing has siphoned all profits to the various vendors.

Money in the bank pays about the same and is less bother.

Great article,I agree that it doesn't make economic sense. And currently there is little thought to dealing with all the home and EV car batteries at the end of their life span. Probably another bill to pay further reducing any benefit.

In regard to "surplus goes to the grid — and as we all know, there’s not much money in that."

I notice the extraordinary markup between what the retailers pay per kwh for solar feed-in tariffs. That is to householders and what they charge the same people in the opposite direction. I know some that are receiving only 3 cents kwh feed in. Looks like the largest markups in the history of mankind.

A good idea to reduce electricity bills. Just do generation and transmission. The retailers are ‘rent seekers’ who are basically ‘clipping the ticket’. Overall thousands of personnel that do not do anything to get power to the door. Such as; marketing, sales forces, large call centres, trading, tactical analysis, directors, CEOs, managements, administrations, I.T. depts, purchasing, personnel depts, safety, legal depts., multiple new plush CBD city offices. Having to 'lawyer up'. Maybe redeploy them into extra transmission for renewables. Many repetitions add enormous costs for the users with little added practical value. These ongoing costs are added to the actual flow from the generators to the user. Multiply the number of retailers by their internal departments. These costs are 'mind-blowing'.

Retailers applying markups are just basically clipping the ticket and are rent seekers. No longer having 'bricks and mortar' style companies aggravates this issue also. They can obfuscate with 'smoke and mirrors'. Look what happened in the USA with the Brian Thompson issue. The guy that allegedly shot him is regarded as a hero by a few there. I am not condoning violence but that is what can result when faceless organisations deny, defer, delay, depose (hope you 'go away' etc). The electricity market is similar.

A good idea to reduce electricity bills. Just do generation and transmission.

I'm just going through the process of renewing our electricity plan now. Our current provider doesn't seem to be interested in keeping our business, so went to the government comparison site that uses your actual power usage numbers to locate the best deals for you and I had never even heard of most of the retailers it threw up in the results.

I can find a better deal than my current provider easily enough amongst companies that are actual traditional energy provision companies by checking the plans on their sites, - it'll cost me a couple of hundred dollars a year extra but I don't care to deal with companies with no history in the energy business. More fool me, I guess.

How does having an ev and charging at home 90% of the time effect the payback period of a home battery. My ev can be used in a blackout perhaps I do not need a battery?

Yep - I thought just use the EV battery. It is also much larger in capacity ?

That is called V2G -- vehicle to grid. It's very early days for this technology but it does hold a lot of promise.

You will not be generally able to use your home battery or the EV battery during an outage. This is because If workers are working nearby, they will be zapped from your and other close systems. You have to pay a considerable extra amount to be able to use your batteries in an outage. This is an Outage Proof system, expensive and needs the approval of the power folk. Be also aware that the power folk can use your battery power up, for little reward to you if they have a sudden need for your power in the grid.

We plug all our essentials directly into the car during blackouts and there is no safety issues for any workers.

The proposal is a great move by the government

It gets people to voluntarily purchase batteries, and pay for most of the battery cost.

The alternative is for the government to install big batteries somewhere, and in doing so the government incurs 100% of the cost

So subsidizing people to buy their own batteries saves the government money.

What's more, people think they are saving lots of money in electricity bills

It is extremely expensive power and extreme fire risk. Stupid use of taxpayer's money.

Yes I agree with you.
This is an initiative that works for the government and the country as a whole but not so much for the individual buying the battery.
Of course with the way energy costs are going up and I think will continue to go up under a Labor/Greens coalition, the economics for the individual will no doubt improve.

Whats with using maths to analyse a Labor/Greens/Teals brain fart? The definition of futile. Or would that be thinking Australia on its own can reverse all global emissions on our own. Unfortunately we need 3 years of this unholy alliance to learn a hard lesson. Buckle up.

Excellent review - in outer Melbourne we have two solar systems, the 6 panel now 15 yo 1.1 Kw system provided 15 years of 60 cent rebates so I priced its replacement with new panels and a battery - $19,000 as need 7 x 440w panels to fully change the battery, they offered 5 year repayments of $70 a week which would be about $50 cash out and $20 cash from free electricity. Just as Noel points out, the break even is like 2037, no way Albo. I worked for one of the Chinese Government funded manufacturers for a few years, within the next five years perhaps 50% of existing panels will reduce output by 50% or more, who is going to fund the $150 billion 5 year full replacement cost - not me.

But you will be paying David.
The half of Australia paying taxes will be funding the replacement of these failing systems because the other (govt. dependent) half will be voting Labour/Greens to keep them in power (it is the best way to keep the welfare flowing to if you are on welfare).
LOL !

Note: the reality is that Storage and Generation technology has not caught up with the green dreams yet. It will eventually but until then it is ideological faith and you are going to pay for this.