On-grid domestic battery storage
Comments
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Hi... I was using data from 2017 for retail prices, that is all. I am yet to be convinced that we are seeing any evidence of retail prices actually dropping (doing anything other than going up significantly) to match projections of wholesale prices ...
However, medium term projections should be based on extending medium term historical trend analysis as opposed to cherry-picking a figure in a publication which most suits the argument being made ...
Your source may have been from 2017, but I've already supplied links to two official sources of data (Ofgem/ONS) which would be more suitable and likely be far more agreeable than the percentages you've been using, but if you need official information sources with supporting data which can be used to produce realistic forecasts - try these ....
This is the latest QEP (Quarterly Energy Prices) report from BEIS dated 27/09/2018 - you'll be particularly interested in section 2 .... https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/743709/QEP_Q2_2018.pdf
These are the supporting BEIS QEP tables in .xls format which can be used to perform accurate analysis on both domestic electricity & gas bills ... https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/743711/QEP_Tables_Q2_2018.pdf
... however, please note - the latest official conclusion (Sept '18) in the report in no way agrees with your selected sources related to historical price increase trends or even the recent round of price uplifts, concluding that ...
If you are able to accept the validity of the positions being maintained by various posters in this latest discussion, you may also start to understand the thought processes of your targetted market - we are the group that will form the early uptake customer base for storage, with some already having taken the step ... look at it as being a really cost-effective source of market research, from which the initial finding is that the market preference is for more-realistic returns calculations!- The price paid for all domestic fuels in real terms has risen by 3.4 per cent in the year to Q2 2018. Between Q2 2017 and Q2 2018, real terms prices including VAT for domestic electricity increased by 4.8 per cent and domestic gas prices rose slightly by 0.3 per cent.
- The average standard electricity bill in 2017, across all payment types has increased by £33 (5.7 per cent) since 2017, from £586 to £619. However, the average 2017 gas bill across all payment types has decreased by £20 (3.1 per cent), from £650 to £630. These bills are based on standard consumptions of 3,800kWh per year for electricity and 15,000kWh per year for gas
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
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Martyn1981 wrote: »I have not misquoted you.
In my opinion it appears that you did. I wrote:Bottom line, given that we know battery paybacks are typically 8 to 14 years or so, requiring them to payback within a 10 year warranty gives them an impossible task.
Whereas you wrote:Martyn1981 wrote: »BTW, you can't suggest an 8-14yr typical payback, then in the very same sentence state that a 10yr payback is impossible.
I was saying that battery paybacks inhabit a range of timescales, typically in the range of 8 to 14 years depending on circumstances, and therefore it's an impossible task to require them to fit within the warranty period. I never stated that a 10yr payback is impossible.... however, please note - the latest official conclusion (Sept '18) in the report in no way agrees with your selected sources related to historical price increase trends or even the recent round of price uplifts, concluding that ...
The average standard electricity bill in 2017, across all payment types has increased by £33 (5.7 per cent) since 2017, from £586 to £619.
Perhaps we are just at cross purposes. I quoted above a source giving Big Six prices increases in detail for 2017 that averaged out to 5.6 per cent. This seems like corroborating data that suggests that a figure of 5.6 or 5.7 per cent represents a real and useful value for electricity cost inflation in the last year.
Note, I am specifically not considering gas or 'average energy' cost increases, as I only think electricity increases are relevant in this instance. However if a customer's intention was to replace their gas usage with a solar diverter, or a heat pump, then I can see projected gas pricing would be relevant, and would likely reduce the argument for going solar+battery in those circumstances.0 -
An item on domestic battery storage from this weeks Carbon Commentary newsletter:1, Domestic batteries for grid services. It doesn’t make financial sense in most markets for domestic customers to install batteries at home. However some utilities are encouraging the growth of storage by paying for the right to use batteries for grid management purposes. EdF in the UK now offers a discount of £1,500 ($2,000) to purchasers of a 4 kWh Powervault battery in return for the right to remotely instruct the battery to charge or discharge at moments of grid instability. I’m not sure that even this discount is enough to give the owner an adequate return but we’ll see a continuing stream of arrangements like this around the world.Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)
For general PV advice please see the PV FAQ thread on the Green & Ethical Board.0 -
Hi... I had been about to say that I was persuaded in part by your arguments and would use a lower increase next time we model for a customer, and also run a test to see how sensitive the results were to differing increase rates. However given the tone of the comments here I feel now that an objective discussion was maybe never on the cards ...
I'm all for an objective discussion, so I've run the 'simplistic' model offered up in a previous example to provide some slightly less 'rough-cut' but still 'simple' analysis ...
... firstly, agreeing the calculated saving of £427 at a compounded 8.4% pays off sometime before the end of year 9, we'll look at a range of energy inflation rates .... starting with the 8.4% you were preciously using then moving down through a range of other alternatives recently raised ..... Let's return to your figure of £0.13 with a more typical battery size, a SX45-2 with 9kWh for £5k. Potential first savings are 9 x £0.13 x 365 = £427. At 8.4% price inflation that's £463 in the second year, then £502 in the 3rd year, etc. Payback is about 9 years. So not bad ...
8.4% - 9 Years (Your source)
6.7% - 10 Years (Your HoCEPBPaper - 5year SC only!)
4.8% - 10 Years (BEIS Q217-Q218)
3.8% - 11 Years (HoCEPBPaper - 5year all supply)
3.0% - 11 Years (Ofgem 7year High)
2.5% - 11 Years (ONS CPIH inflation 2005-2018)
2.0% - 11 Years (Ofgem 7year Low)
... so as can be seen, on the simplistic model where all battery charge is supplied by solar at no cost there's little difference so historical term CPIH might as well be used ...
Where the difference comes in is when realistic usage patterns come into play ... I haven't researched an annualised battery effectiveness for a 9kWh battery, but for total simplicity, let's assume that the average battery contribution would from solar would be 6kWh for 6 months of the year and 3kWh for the rest, with an additional 5kWh of E7 tariff shifting benefit at 85% return efficiency over that period with E7 rates being 6p/kWh overnight and 4p more expensive during the day .... we get an initial first year annual battery cost benefit (to which inflation must be added) of ~£222/year((182*6*13p)+(182*3*(13-4p)+(182*5*(13-4-5p)*0.85)).... note this is still on the ambitious side for a low energy user in representing a household currently importing 1274kWh/year moving to no imports at the E7 daytime rate ... for information, our 12month rolling import is 1219.4kWh.
Applying the same set of annual energy inflation assumptions we resolve to a different range of 'payback' timelines ...
8.4% - 14 Years (Your source)
6.7% - 15 Years (Your HoCEPBPaper - 5year SC only!)
4.8% - 16 Years (BEIS Q217-Q218)
3.8% - 17 Years (HoCEPBPaper - 5year all supply)
3.0% - 18 Years (Ofgem 7year High)
2.5% - 19 Years (ONS CPIH inflation 2005-2018)
2.0% - 19 Years (Ofgem 7year Low)
.... note this is still on the ambitious side for a low energy user (the normal early adopter target market) in representing a household currently importing 1274kWh/year moving to no imports at the E7 daytime rate & would not include any change in tariff standing charges resulting from the move to E7, any ongoing (/ through life) costs, equipment financing or any lost opportunity from having the £5k held as an investment - as stated, it's still relatively 'simple', but should be in line with the results from introducing any model complexity ...
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle0 -
Hi... Perhaps we are just at cross purposes. I quoted above a source giving Big Six prices increases in detail for 2017 that averaged out to 5.6 per cent. This seems like corroborating data that suggests that a figure of 5.6 or 5.7 per cent represents a real and useful value for electricity cost inflation in the last year ...
Yet you used replaced an analysis basis of 6.7% with 8.4%! ....
Anyway, please read the posts carefully, they provide a view that a medium-term projection cannot be based on price movements in a single year ... if you disagree we will remain at 'cross purposes', however, the consensus of any group of (decent) economists, statisticians, accountants or engineers would reasonably consider trend analysis as being the more reasonable assessment methodology ...
Please look at the charts in the BEIS document referenced as well as the supporting spreadsheet data ... there is no reasonable argument to not base an assessment of future energy price increases on these figures unless there's an (yet unknown) externality which seriously changes the trend projection.
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle0 -
In my opinion it appears that you did. I wrote:
Whereas you wrote:
I was saying that battery paybacks inhabit a range of timescales, typically in the range of 8 to 14 years depending on circumstances, and therefore it's an impossible task to require them to fit within the warranty period. I never stated that a 10yr payback is impossible.
If a payback is possible within 8yrs, and you went further than just saying possible, but stated that 8-14yrs was typical, then not only is a 10yr payback possible today, but could become normal going forward.
So perhaps I have more faith in the storage industry than you do, but it certainly seems like a payback would be possible (not impossible) with a 10yr warranty.
However, you've missed my positive comments, which was that if the warranty (cycles and years) can be extended, perhaps to 10,000 cycles and 15yrs, or 20yrs, then that massively improves the economics (by reducing the batt cost per cycle) without even reducing the battery price.
It seems you have decided that I am 'the enemy', you could not be more wrong. I'm one of the silly people who is willing to invest a substantial amount of money, perhaps £5k, on the basis of there being a reasonable chance of getting my money back over a 10-20yr period. Or to put it another way, risk £5k for absolutely no financial benefit whatsoever, since risking zero pounds on zero battery systems would place me in the same economic position.
Now, is that sensible, of course not. After 20yrs I'll be back where I started if my gamble pays off. This is not something that most people will be willing to do, and I would caution them strongly against it ...... despite my being willing to do so. This is a money saving site and if I suggested others copied me, I'd be wrong.
Yes, this is a green and ethical board, but I'm also not convinced about the green side of batts today (tomorrow yes) since we do not as a nation need storage today as RE generation is not in excess, so batts will actually 'waste' green generation through system losses. I'm also not entirely convinced on the need to promote/subsidise batts today, despite arguing the exact opposite for PV at the start of this decade - my reasoning is that batts don't need an artificial boost since they will receive a massive ramp up from the automotive side. I'm just being honest and pointing out the negatives.
So, as I said at the start, I like the site, I like the clear pricing. I'd go further and say the pricing is good, but that's compared to other products, whilst it is bad compared to where the pricing needs to be.
Is this your fault, no. Is it my fault, no. Is it the industry's fault, no. It is simply where we are today whilst we impatiently wait for prices to fall, production to ramp up, to bring prices down, to increase demand, to ramp up production, to bring down prices ..... you see where I'm going with this - to a point that it is economical.
BUT - will I let my passion for RE, PV and storage blind me to reality and sit by idly when I see marketing tactics like this:When we run our financial model we assume 2% capacity degradation per year and an annual price rise of 8.4%.
NO, no I won't.
It might seem strange that I (and others on here) should take such um-bridge at such a short sentence, but you've inadvertently set off every alarm bell possible, and as another poster said:
"All trust and respect was lost with the first set of ridiculous assumptions. I'm actually quite surprised that indefensible is continuing to be defended."
We are your market, but I personally wouldn't go within bargepole range of a company using, or misusing inflation rates to justify the economics of a product. Perhaps, unknown to you, we are simply too jaded to this argument on MSE.
Lastly I need to address this previous issue as it has played on my mind:Edit- for simplicity, and based on your 8.4% inflation claim, are you happy to state that in 10yrs time you predict a leccy unit price of approx 34p/kWh?
I had been about to say that I was persuaded in part by your arguments and would use a lower increase next time we model for a customer, and also run a test to see how sensitive the results were to differing increase rates. However given the tone of the comments here I feel now that an objective discussion was maybe never on the cards.
Firstly, let me give you the benefit of the doubt, and assume you thought I was 'spinning'. I hate spin doctors.
I was not trying to spin, not trying to be clever, not trying to look big, not using games & tricks. All I did was take your statement, apply 10yrs to it (we are talking about a 10-20yr product after all), and then ask you if you still stood by it.
Sometimes folk say something numerically without thinking how it would actually turn out, and it can sometimes surprise all. This may have been the case with you.
So you can take offence at my question, you can be outraged at my question, but the data upon which it's based is yours, not mine. You set the path, all I did was go down it, and if it leads somewhere uncomfortable for you, then that's your cross to bear, not mine.
I do hope you can be persuaded to step back from this inflationary cliff edge you are standing on, as I really meant my original post that having some industry input would be so helpful and interesting. I know next to nothing about batts, but like many others on here, I can hold my own in a discussion on maths and economics.Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)
For general PV advice please see the PV FAQ thread on the Green & Ethical Board.0 -
let's assume that the average battery contribution would from solar would be 6kWh for 6 months of the year and 3kWh for the rest, with an additional 5kWh of E7 tariff shifting benefit at 85% return efficiency over that period with E7 rates being 6p/kWh overnight and 4p more expensive during the day
I think we're close to agreeing on the method, and maybe our differences are largely in the detail into which we go and the choice of values to use. For solar generation we use figures from the PV GIS database (you should be able to find details of the process we use if you Google for 'fuel included blog "how much solar power could my roof generate"'). For a default case we use a south facing array in the Midlands which will generate as follows (daily kWh Jan to Dec):
4.28 6.53 10.90 13.80 14.70 15.10 14.60 12.60 11.50 8.22 5.49 3.85
Running the model optimises payback as it will consider the full range of available battery capacities from 2 to 20kWh. In this case we would expect to fill a 4 kWh battery most days just from solar, with a top up from Eco7 in the winter. Ordinarily, though, we would expect a bigger differential than you suggest between Eco7 and the daytime rate - my own is something like 7.5p and 15p, and we generally use the British Gas standard rates of 8.61 and 19.4p unless the customer can give us their specific rates.
Anyway, if we run the model for that user, assuming annual consumption of 4200 kWh and a 90/10 split day/night, 2% annual degradation, 2.4kWh batteries, and 5.6% inflation we get the following paybacks for the given number of batteries:
1: > 20, >20, 15
2: 16, >20, 11
3: 15, >20, 9.9
4: 14.9, >20, 9.5
5: 15, 16.5, 9
6: 14.5, 14.5, 9
7: 15.5, 14.5, 10
8: 16.5, 16, 11
Where the results, as described previously, are for staying on 24hr and adding a battery, moving to Eco7 and adding a battery, and staying on Eco7 and adding a battery.
Here my recommendation would be that it's only viable if they are an Eco7/EV user, as mentioned before, and they should start with 3 batteries (7.2 kWh) and upgrade to more once it has proved itself.
For the case of 3 batteries the model suggests the following figures for the battery charge level from Eco7 to maximise savings:
January: 26%
November: 5%
December: 33%0 -
Our posts seem to be crossing over each other, I'm not sure why.Yet you used replaced an analysis basis of 6.7% with 8.4%! ....
Anyway, please read the posts carefully, they provide a view that a medium-term projection cannot be based on price movements in a single year ... if you disagree we will remain at 'cross purposes', however, the consensus of any group of (decent) economists, statisticians, accountants or engineers would reasonably consider trend analysis as being the more reasonable assessment methodology ...
We changed the figure when more up to date data became available. Further, we favour real-world data over projections. That may be something we have to disagree about, but I posted from an example article that outlined why they expect electricity will keep going up above inflation - and that seems to be the reality that our customers come to us about, not the minimal increases that these projections indicate. Based on the data you gave, and our philosophy, I think a figure of 5.6% would be an appropriate annual increase to use and will not skew the results either way.0 -
Hi... Running the model optimises payback as it will consider the full range of available battery capacities from 2 to 20kWh. In this case we would expect to fill a 4 kWh battery most days just from solar, with a top up from Eco7 in the winter. Ordinarily, though, we would expect a bigger differential than you suggest between Eco7 and the daytime right - my own is something like 7.5p and 15p, and we generally use the British Gas standard rates of 8.61 and 19.4p unless the customer can give us their specific rates.
Anyway, if we run the model for that user, assuming annual consumption of 4200 kWh and a 90/10 split day/night, 2% annual degradation, 2.4kWh batteries, and 5.6% inflation we get the following paybacks for the given number of batteries ..
I really don't want to get into a detailed argument to agree a methodology at the moment when there are a number of basic assumptions which need to be addressed.
Firstly, as the average UK electricity consumption is closer to 3100kWh than 4200, that night has nothing to do with E7 tariff rates but logically starts at sundown and ends at sunrise, the typical household consumes more energy when occupied than when simply running baseload and, on average, it's darker when occupied (say 5pm - 8am) than when the PV is generating, then the assumption that "annual consumption of 4200 kWh and a 90/10 split day/night" must be questionable as a typical model from the outset, if at all! ...
Secondly, on the E7 differential ... that was based on a 13p/kWh single rate electricity tariff moving to 17p(13+4) daytime and a discounted 7 hour overnight tariff of 6p/kWh, a day/night differential of 11p(17-6), which is fully in line with your BG differential of 10.79p (19.4-18.61) ... as my provided calculations we purely based on differential logic, I think that the difference (0.21p/1.9%) is typical of an acceptable rounding tolerance ...
Regarding ... "In this case we would expect to fill a 4kWh battery most days just from solar" ... that cannot be the logical assumption as the priority for the solar generation would be to meet household demand ... if the total demand (as per your figures) is 4200kWh, the simplistic sanity check is to say that average daily daylight consumption would be ~5.8kW(4200/365/2), therefore in simplified terms the average generation available to be committed to storage from your PVGIS dataset ...
4.28, 6.53, 10.90, 13.80, 14.70, 15.10, 14.60, 12.60, 11.50, 8.22, 5.49, 3.85
... would likely look more like the following as realistic daily generation available to commit to storage ... 0 0 4 7 8 9 8 7 5 2 0 0 ... which when exploded to an annualised basis approximates to 1529 kWh from a ~4kWp system, no matter what size the battery, whereas capping storage to a single 2.5kWh battery pack would, after round trip efficiencies, result in a deliverable daily energy pattern something similar to ... 0 0 2 4 4 4 4 4 4 1 0 0 ... so around 825kWh/year ....
This sets the benefit for using a battery pack/solar combination with the model assumptions provided as ranging from £107(825*13) to £199(1529*13p) before resorting to reliance on E7 ... all this because of the mismatch between the example annual consumption and the size of the example PV array ...
Now, if the array was bigger or the demand was lower things would be different and a more advantageous saving could be described, it's all a matter of keeping things in balance! ... I certainly wouldn't have chosen such an example!
... and yes, almost everyone in this discussion would be fully familiar with PVGIS & understand that the annualised ~3703kWh that the monthly data resolves to would be typical for a 4kWp system! ..
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle0 -
Firstly, as the average UK electricity consumption is closer to 3100kWh than 4200, that night has nothing to do with E7 tariff rates but logically starts at sundown and ends at sunrise, the typical household consumes more energy when occupied than when simply running baseload and, on average, it's darker when occupied (say 5pm - 8am) than when the PV is generating, then the assumption that "annual consumption of 4200 kWh and a 90/10 split day/night" must be questionable as a typical model from the outset, if at all! ...
It's terminology - the 90/10 split day/night means what's outside the E7 tariff period vs what's inside it. Our customers have data on their E7 and daytime consumption from their bills, that's all they can give us.
And the 4200 just represents the value in the model when it was last run - though our demographic certainly tends towards bigger energy use (despite your presumption previously that early adopters would be low energy users) - some of their consumption figures are huge. I'd rerun the model for 3100 if it would be of interest.Secondly, on the E7 differential ... that was based on a 13p/kWh single rate electricity tariff moving to 17p(13+4) daytime and a discounted 7 hour overnight tariff of 6p/kWh, a day/night differential of 11p(17-6), which is fully in line with your BG differential of 10.79p (19.4-18.61) ... as my provided calculations we purely based on differential logic, I think that the difference (0.21p/1.9%) is typical of an acceptable rounding tolerance ...
Got it, my misunderstanding, sorry.Regarding ... "In this case we would expect to fill a 4kWh battery most days just from solar" ... that cannot be the logical assumption as the priority for the solar generation would be to meet household demand ... if the total demand (as per your figures) is 4200kWh, the simplistic sanity check is to say that average daily daylight consumption would be ~5.8kW(4200/365/2), therefore in simplified terms the average generation available to be committed to storage from your PVGIS dataset ...
4.28, 6.53, 10.90, 13.80, 14.70, 15.10, 14.60, 12.60, 11.50, 8.22, 5.49, 3.85
...
No, remember what I said about our demographic being people who are out while their solar is generating (we wouldn't advise a battery system for the retired, stay at home mums, etc.) so roughly speaking the first 4 kWh goes into the battery and the rest is lost. These are the customers who are getting the best paybacks.
I don't want to put words in your mouths, but perhaps you can see that from my perspective these arguments seem to be along the lines of 'if it can't work for everyone then it can't work for anyone', yet I was very clear about the subset of households we feel get the most benefit from these systems.0
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