Exposing the power grid lobby's 5 mistakes on grid disconnection

The power network lobby has moved into defensive mode with a new report titled, 'Value of a Grid Connection to Distributed Generation Customers' as it dawns on its members that millions of customers might choose stand-alone solar and storage over a grid connection in the near future (collectively reducing our dependence on the grid). 

As touched on in another article today this work is essentially targeted at demonising owners of solar as freeloaders and defending the networks from competition. On top of this it makes a series of inaccurate claims that suggest networks provide services that can't be replaced by solar in combination with batteries, and also overstates the cost of solar-battery power systems.

Claim 1: It's extremely expensive to leave the grid

Reality check: The quoted costs for leaving the grid were sourced from specialist niche suppliers in a business without access to a volume market (it hasn't developed yet). If a volume market was achieved this would cause significant downward pressure on prices (imagine costing future computers on the cost of the first PCs). Modeling from Zero Emissions Australia shows that a battery system only needs to be around 50kWh in Sydney to get a house with three or four air-conditioners through the worst of winter and in summer the system is constantly in surplus, meaning that the system quoted in the report is considerably oversized in terms of battery capacity.

The system proposed for going off-grid also includes a $9000 fossil fuel generator, which is not required for a reliable supply. If a generator were actually required then a small 1kW premium DC inverter model for around $1500 would suffice. The solar PV panels are also priced at an absolute premium. The price per watt quoted is about twice what is available on the commodity market, and enough to buy the world's highest performance (Sunpower/BENQ) panels. 

The PV system also needs to be substantially upsized to get the best return on investment and longest lifespan of the equipment. In all, the systems quoted are significantly overpriced. Systems could be built to achieve reliability equal to that of the electricity grid for approximately $40,000-$45,000 using components available today with reasonable mark-ups and current labour costs. This is about $35,000 less than what the ENA report claims it would cost, and would offer a cheaper energy service than paying the ENA's good friends and peers (the gentailers) for full annual gas and electricity bills.

Claim 2: A customer would be up to $8700 better off if they stay on the grid

Reality Check: There is some really poor modeling (and very questionable assumptions) behind these numbers. Although the opportunity cost of money has been properly accounted for by comparing the financing cost of going off-grid to paying down or redrawing on a home loan, the lifespan of the solar equipment has been set ridiculously short, at 10-12 years.

A solar inverter and PV system will easily last 30 years. Batteries that aren't aggressively cycled, such as those in large banks to get through a tiny number of three or four day heavy winter cloudy periods will last 15 years, and the replacement cost in 15 years will be very low at around 30 per cent of today's price (have the authors not heard of cost reduction curves?).

Analysis both by energy consultants True Demand and Zero Emissions Australia shows that at today's prices it is about break even, for a customer with low-cost finance (i.e. home loan rates), to leave the grid versus staying – but if retail electricity prices continue to rise, it would work out better to leave.

Claim 3: The grid provides startup-power, supporting appliances such as air-conditioners that temporarily increase their load 4 to 5 times when starting up

Reality Check: This claim is based on air-conditioners that were the standard units sold at least 15 years ago. The bulk of air-conditioners sold on the Australian market today are inverter models which soft start, creating very little (if any) at all in-rush or surge current. They do not create a significant impact when starting up.

What's more, off-grid inverters have been able to handle significant surge current over very short time frames, to start motors, for decades. This is not a new problem and is well catered for in current solar equipment; even though it is (for the most part) no longer required. Even the overpriced equipment specified in the appendices of the ENA document quotes a two-minute surge current rating. 

Also, modern split air-conditioners, such as Daikin's Ururu Sarara, use about 400W max of grid electricity to produce 2400W of cooling and 620W max of grid electricity to produce 3600W of heating. Running four or five of these on a modern 5-7.5kW inverter will in no way stress it, leaving it with considerable additional capacity for servicing other appliances such as washing machines, dishwashers, fridges, ovens and kettles.

Claim 4: Power quality services that protect the safe operation of home appliances can only be supplied by the grid.

Reality Check: A customer using a good quality stand-alone inverter is likely to have significantly better quality power than what is offered on the grid because they are not subject to being on the receiving end of poor performing equipment being used by their neighbours which they have no control over.

Claim 5: Quitting the grid is like turning off Wi-Fi.

Reality Check: Umm… well no. 

Having a Wi-Fi internet connection gives you access to information and network services on the world's biggest communication and information platform.  You can't have that in a stand-alone form, it just doesn't exist and never will. 

However 5000kWh a year of energy demand, and some afternoon peak demand, is something that can be delivered in either stand-alone or grid connected configuration, in a way in which a customer cannot perceive any difference between the two.

Matthew Wright is executive director of Zero Emissions Australia, technical director at Efficiency Matrix and resident columnist at Climate Spectator.