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  • FIRST POST
    • Martyn1981
    • By Martyn1981 5th Dec 16, 2:57 PM
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    Martyn1981
    On-grid domestic battery storage
    • #1
    • 5th Dec 16, 2:57 PM
    On-grid domestic battery storage 5th Dec 16 at 2:57 PM
    Hello!

    Right, as discussed elsewhere, battery storage for self generation (typically PV) is interesting (to some), and gathering momentum in the UK. So here's a thread to discuss it, and watch it develop.

    I've called it on-grid, as off-grid is so much more specialised. And domestic as commercial scale storage, or grid scale can be chatted about on the Green & Ethical energy issues thread.

    So, where are, well this article lists about 20 systems that are available or should be available soon:-

    Introducing CleanTechnica’s New Home Battery Overview Page

    Jumping straight in with personal opinions:-

    Economical - Not yet. Prices are falling fast, the range of products is expanding fast, and large numbers are being deployed in some countries, either because the price of leccy is high (Australia & Hawaii) or because subsidy schemes exist (Sweden & Germany).

    Where are we today. My needs are a 4kWh system. That's 4kWh of useable capacity, which would mean about 8kWh of lead acid (LA), or about 5kWh of lithium ion (Li-ion). My research has found batts in the high £2k and up range. I need the price to be nearer to £1.5k.

    The Tesla Powerwall II, installed is approx £6.5k, which works out at about £2.2k for 5kWh, but of course, it doesn't work quite like that, as smaller systems will cost proportionately more.

    Environmental - Tricky one this (to say the least). Until storage is needed, it's not environmental. Renewable energy (RE) generation currently displaces gas generation, which is a demand follower. Once gas generation is pushed down to zero (at times) we need storage, but we aren't there yet.

    However, to push gas generation down to zero, we need more RE, and to ensure it is viable/economic/profitable, we will need storage - chicken and egg situation.

    The advantage of storage to the environment, is to take peaks of RE and timeshift them to peaks in electricity demand. On a domestic level, this works quite well as PV generates during the day into the afternoon (or evening) depending on the month, so any stored leccy is available for the evening peak 5pm to 7pm.

    That's the background, and now here's a thread to discuss options, prices, economics, and watch things unfold. Enjoy.
    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.
Page 23
    • TrevorL
    • By TrevorL 2nd Nov 18, 12:07 PM
    • 18 Posts
    • 2 Thanks
    TrevorL
    Can I just say, and sorry if I seem like a pedant, but please make sure you don't / aren't breaking any MSE rules about business posting, as it would be really good to have some professional advice and chat on this issue.
    Originally posted by Martyn1981
    Thanks. Good point - I've just checked the rules and they're pretty strict so I will avoid giving any links to our products or mentioning prices again.

    I believe I am fine to answer questions, and am happy to take any on solar, storage and electric cars.

    Having since reviewed the rest of the thread I can see there are a lot of unanswered questions. I will try to address the most obvious ones here. Note that while the answers are applicable to our products 'other products are available' so the information should be of general use.
    1. Most storage systems can now do at least 3kW power, some go as high as 15kW.
    2. Storage capacities range from 2.4 kWh to 25.2 kWh.
    3. Financial calculation models are available that can calculate the payback for your particular circumstances - but the basic assumption is that you're out during the day so the battery can capture otherwise wasted solar.
    4. Economy 7 is available for topping up the batteries in the winter when solar generation is reduced.
    5. Systems generally have power cut backup capability.
    6. The latest systems have 'G100' capability. This basically means they can be wired in such a way that you don't have to ask for permission in advance to install them.
    Last edited by TrevorL; 02-11-2018 at 12:11 PM.
    • Zarch
    • By Zarch 2nd Nov 18, 3:23 PM
    • 275 Posts
    • 643 Thanks
    Zarch
    Is this right then?

    I pay 13p per kW for my imported electricity.

    If I could max fill up the battery from excess solar every day that would save me 4 x £0.13 (£0.52) each day if I then used all of it?

    365 x 52p = £189.80 saved per year, so over 10 years i'd save £1898.

    A 4kWh battery is currently £3277. So it doesn't add up yet?

    At 13p per unit, the battery would need to be less than £1898?

    Granted, with inflation on energy prices over 10 years that estimation could rise to £2500 saved. But we still aren't quite there yet are we?

    Does that all sound about right? If not, what have I missed?
    17 x 300W panels on a 3.68 SolarEdge system in Sunny Sheffield.
    • EricMears
    • By EricMears 2nd Nov 18, 3:41 PM
    • 2,449 Posts
    • 4,267 Thanks
    EricMears
    Does that all sound about right? If not, what have I missed?
    Originally posted by Zarch
    You also have to estimate (guess ?) how many times you can take the battery from completely empty to completely full and back again then divide that number into the cost of the battery(ies) to get a cost per cycle figure. Divide that by the size of the battery to get a cost per kWh and subtract that from your 'saving per unit'

    You could probably reduce that cost/kWH stored if you never completely fill or empty the battery to 'de-stress' it and make it last longer.
    NE Derbyshire.
    4kWp S Facing 17.5deg slope (dormer roof).
    • Martyn1981
    • By Martyn1981 2nd Nov 18, 4:00 PM
    • 8,687 Posts
    • 13,672 Thanks
    Martyn1981
    Is this right then?

    I pay 13p per kW for my imported electricity.

    If I could max fill up the battery from excess solar every day that would save me 4 x £0.13 (£0.52) each day if I then used all of it?

    365 x 52p = £189.80 saved per year, so over 10 years i'd save £1898.

    A 4kWh battery is currently £3277. So it doesn't add up yet?

    At 13p per unit, the battery would need to be less than £1898?

    Granted, with inflation on energy prices over 10 years that estimation could rise to £2500 saved. But we still aren't quite there yet are we?

    Does that all sound about right? If not, what have I missed?
    Originally posted by Zarch
    I think you have the basics, yes. Assuming that you have 4kWh spare to store each day (in the winter I don't), and you have 4kWh of demand to offset from storage (in the summer I don't). But heat pumps and EV's might change the demand side for me allowing use of much more generation (with storage) for 9 months of the year.

    Or, as Eric suggests you can come at it from the other direction and calculate the cost of using the batt and see how that compares to the leccy price. If we ever see export being metered, then you also have to deduct the lost export money.

    Regarding inflation, I wouldn't bother. To save time and headaches, I kinda (lazily) let inflation and cost of capital (lost interest) balance each other out. If energy inflation is significant, then you would include it, but it looks like such fears are now groundless. At worst the NAO suggest perhaps a 50% increase in wholesale prices over the next 10yrs, before costs fall back down again. Note that 50% of wholesale is about 2p to 2.5p/kWh on the retail price.

    The big wins for battery economics are prices (falling) and life expectancy / life cycles (rising).

    Purely for fun, think how different the picture looks if the leccy price is 15p+ (perhaps a NSC account), the batt cost falls to £2.5k, and the life / cycles double?

    You won't get rich, you won't save a lot of money, but long term you might benefit, and help to green up the grid a bit.
    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.
    • TrevorL
    • By TrevorL 2nd Nov 18, 4:20 PM
    • 18 Posts
    • 2 Thanks
    TrevorL
    Is this right then?

    I pay 13p per kW for my imported electricity.

    If I could max fill up the battery from excess solar every day that would save me 4 x £0.13 (£0.52) each day if I then used all of it?

    365 x 52p = £189.80 saved per year, so over 10 years i'd save £1898.

    A 4kWh battery is currently £3277. So it doesn't add up yet?

    Granted, with inflation on energy prices over 10 years that estimation could rise to £2500 saved. But we still aren't quite there yet are we?

    Does that all sound about right? If not, what have I missed?
    Originally posted by Zarch
    Your approach is correct, and paybacks are typically in the region of 8 to 13 years depending on the size of system, customer use pattern, etc.. The batteries are warrantied for 10 years but customers are assuming that they will last significantly longer, though of course at a lower capacity. When we run our financial model we assume 2% capacity degradation per year and an annual price rise of 8.4%.

    Let's consider a different example to yours. The average UK price for a kWh is about 15p (the average is higher for renewable electricity). So if we consider the SX63-4 model, just so I can be accurate about prices (other systems are available), then you get 25.2 kWh for £12k. In the first year you could save about 25 x £0.15 x 365 = £1350. At 8.4% price inflation that's £1500 in the second year, then £1600 in the 3rd year, etc. In that case, for a high energy user with deep pockets, payback is after about 7 years.

    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.

    Having said all that, I'd be the first to say these examples are not entirely accurate which is why we have a very complex mathematical model that we run for customers, this is just to illustrate that people are buying home batteries for sound financial reasons. At the same time they benefit from fixed electricity costs, power cut backup, at least partial independence from the grid and the Big 6, and simply knowing where their electricity comes from. These are significant issues for many people.
    Last edited by TrevorL; 02-11-2018 at 4:25 PM.
    • Martyn1981
    • By Martyn1981 2nd Nov 18, 4:38 PM
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    • 13,672 Thanks
    Martyn1981
    we assume 2% capacity degradation per year and an annual price rise of 8.4%.
    Originally posted by TrevorL
    Even by my standards that was a short term relationship. Just 5hrs and 4 posts.

    Oh well, time to log in to Screwfix and order more barbed wire and trenching equipment.
    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.
    • pinnks
    • By pinnks 2nd Nov 18, 5:07 PM
    • 704 Posts
    • 1,506 Thanks
    pinnks
    Hmm, don't mean to be rude and I appreciate that you say you use a more complex model for customers (and need to be careful how you post here) but if anyone tried to sell me a battery with an assumed 8.4% inflation figure and 100% daily charge and discharge 365 days a year I would show them the door.

    I have a 5+kWp system and while I can generate up to 30kWh a really good day in the summer, the average expected for my system is about 19kWh per day in the middle of summer. All good for saving 9kWh per day but I wouldn't use more than about 3kWh of that during the dark hours, so it doesn't really help being able to save 9. In reality I would be topping up by 3 or 4 per day during those months, say 8 months for ease and say 5kWh per day to average out using a bit more at the beginning and end of those months when the nights are longer. So, the reality is more like 5*0.13*240 = £156 in that period.

    For the other 4 months my average daily excess generation is perhaps 2kWh which of course I would store and use, so 2*0.13*125=£32.50. This makes a more realistic annual saving of about £190, which as it happens is not a million miles away from Zarch's guess.

    In terms of inflation etc, I am with Mart and would generally ignore it but certainly wouldn't entertain 8.4%. My leccy price has increased by 4.5% over the last 6 years. True, it fell by 20% and then rose by 25% but estimating over 8% rise per year is not really reflected by recent events...

    So, the maths doesn't yet pan out for batteries for me, though I wish it did.

    There are some on here with deep pockets who have opted for batteries for green reasons but for most of us the prices still need top drop to below £2,000 for a 9kWh plus system...
    Wiltshire - 5.25kWp
    3.5kWp: 14 x Phono Solar 250 Onyx, Sunny Boy 4000TL, WSW 40 degrees, June 2013
    1.75kWp: 7 x Phono Solar 250 Onyx, Sunny Boy 1600TL, SSE 45 degrees, March 2014
    • zeupater
    • By zeupater 2nd Nov 18, 6:41 PM
    • 4,813 Posts
    • 6,479 Thanks
    zeupater
    ... Let's consider a different example to yours. The average UK price for a kWh is about 15p (the average is higher for renewable electricity). So if we consider the SX63-4 model, just so I can be accurate about prices (other systems are available), then you get 25.2 kWh for £12k. In the first year you could save about 25 x £0.15 x 365 = £1350. At 8.4% price inflation that's £1500 in the second year, then £1600 in the 3rd year, etc. In that case, for a high energy user with deep pockets, payback is after about 7 years.

    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 ...
    Originally posted by TrevorL
    Hi

    Sorry, but that's far too simplistic an approach resulting in far too optimistic a return! ...

    On the 25kWh system with a 25kWh/day usage you'd need to have a property with an electrical demand of at least 25kWh/day (so a minimum of around 3x UK domestic average) and have a solar array likely well in excess of 40kWp to get anywhere near being able to achieve an average 25kWh of charge into storage in mid-winter months & probably well over 100kWp to stand a chance of providing any kind of reasonable guarantee ... the incremental investment in solar would logically need to be added to the battery in order to calculate any form of storage payback on that basis so somewhere around £50k-£100k in addition to your £12k for a return of £1350/year ... then again, ensuring there's a need for 25kWh of overnight discharge in the summer would be more than a little problematical for most.

    There are reasons for having a 25kWh battery in a domestic property, for example - to provide multi-day autonomy for most of the year, however, that would reduce the number of cycle equivalents over a year with a corresponding reduction in annual savings ....

    Now, the 9kWh is interesting, it's probably in the region of what we would look to install, but even then the solar+storage payback assumption is overcooked ...

    A typical 4kWp system may average generation of ~16kWh/day in high summer, but that's not guaranteed, some days there wouldn't be enough available spare generation to charge to the batteries to full, whilst in achieving ~2.5kWh in mid-winter, little would be available to divert to storage as it'd mostly be used in the daylight hours ... some mid-winter days there'll be no generation at all, others may achieve ~7kWh or more, of which only ~5kWh would likely be available to store!

    What I'm attempting to convey is that it's no use using simplistic payback calculations for such technology on these threads as we've had this very discussion so many times ... having said that, I do like the concept of modular storage solutions as it provides the consumer with a potential growth-path (as long as the manufacturer has a long-term view on backward-compatibility of their product offerings) and the referenced range certainly looks to be more suitable to 'buy into' than the Powerwall, which has a minimum capacity configuration which would likely be far too large for the UK homes with solar considering that they would typically be far more energy efficient than average ... as such I tend to agree with... this article on the PW2's market positioning ... from last year that covered this very issue ...

    It's also relevant to note that until storage costs fall well below the £200/kWh level they will effectively remain far too costly to show any form of payback and that most wouldn't even consider 'investing' in one until the achieve a price point of ~£150/kWh, which for a 9kWh system would give a basic 'starting to get interested' range of ~£1300-£1800 installed, so a cell price of around/below $75/kWh would need to be achieved first ... additionally, at £100-£120/kWh for the battery solution, the solar+storage decision becomes a 'no-brainer & that's where the market segment will become very interesting! ...

    ... as for the energy price inflation assumption used within a justification ... we early PV adopters all saw that approach when talking to various solar panel salesmen, so let's not go anywhere near that one on batteries! ...

    HTH
    Z
    Last edited by zeupater; 02-11-2018 at 6:58 PM. Reason: formatting
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    • TrevorL
    • By TrevorL 3rd Nov 18, 10:59 AM
    • 18 Posts
    • 2 Thanks
    TrevorL
    Even by my standards that was a short term relationship. Just 5hrs and 4 posts.

    Oh well, time to log in to Screwfix and order more barbed wire and trenching equipment.
    Originally posted by Martyn1981
    We rely on third parties to estimate future rises. The most recent update we've seen said 8.4% - I can't post links but you'll find it you Google for "UK Energy Price Rises Report 2017". Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    The second source clearly takes the view that electricity price rises over the last decade have little relevance to how they expect prices to increase over the next one as the market is being transformed.

    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.
    Last edited by TrevorL; 03-11-2018 at 11:08 AM.
    • TrevorL
    • By TrevorL 3rd Nov 18, 11:05 AM
    • 18 Posts
    • 2 Thanks
    TrevorL
    For the other 4 months my average daily excess generation is perhaps 2kWh which of course I would store and use, so 2*0.13*125=£32.50. This makes a more realistic annual saving of about £190, which as it happens is not a million miles away from Zarch's guess.
    Originally posted by pinnks
    Sorry, but that's far too simplistic an approach resulting in far too optimistic a return! ...
    Originally posted by zeupater
    I agree, which is why I wrote "I'd be the first to say these examples are not entirely accurate which is why we have a very complex mathematical model that we run for customers." A key element of the model is it compares the savings for 3 cases:

    1. Staying on a 24 hour tariff and adding a battery
    2. Moving from a 24h tariff to an Economy 7 tariff with a battery
    3. Being on an Economy 7 tariff and adding a battery

    This is because a key benefit of these systems is that you can fill them with Economy 7 in the winter when solar generation is low. Obviously only by cycling the battery daily can you get good paybacks. Our model runs an optimisation algorithm to calculate the percentage of charge that a householder needs to put in from Eco7 to optimise their savings (e.g. 40% in October and March, 65% in November and February, 90% in December and January, or whatever).

    While Economy 7 had largely gone out of fashion, it's now back and increasingly popular because of the rise of EVs. Certainly a significant portion of our customers have an EV or are considering one, so they may not be representative of the country at large.

    With this approach instead of saving the cost of a unit by using solar, you are saving half the cost by using Economy 7.

    The results from the modelling are pretty clear - the shortest paybacks are for those who are already on Economy 7 and just add a battery. Next best is moving from a 24hr tariff to Economy 7 with a battery, and least savings go to those who just stay on a 2hr tariff and add a battery (in which it case it will be idle for much of the winter).

    Another key element that is often ignored is lifestyle. At the risk of pointing out the obvious - but it doesn't seem to have been highlighted so far - home batteries are for people with solar who are out during the day. If we get an enquiry from someone retired or at home with small children we tell them straight up that it's unlikely to save them money. The benefit is for people who are out during the day - they are generating free solar but don't get to use it without a battery.

    Forums are imperfect means of communication, but hopefully through conversing we will see that we're not a million miles apart.
    Last edited by TrevorL; 03-11-2018 at 11:33 AM.
    • Martyn1981
    • By Martyn1981 3rd Nov 18, 11:27 AM
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    • 13,672 Thanks
    Martyn1981
    We rely on third parties to estimate future rises. The most recent update we've seen said 8.4% - I can't post links but you'll find it you Google for "UK Energy Price Rises Report 2017". Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.
    Originally posted by TrevorL
    1. Happy to go through all the latest CfD auction prices and estimates for nuclear and RE. We see the highest at £100/MWh for HPC, and of course gas lower, though we may see a rising carbon tax. So that's an increase of about 5p-6p/kWh on the wholesale price giving an increase of approx 33% on the retail price.

    But, we now have on-shore wind and PV going subsidy free at around £50/MWh, and off-shore wind CfD's at £64/MWh (£57.50 CfD bid at 2012 baseline price). So increases of about 1p/kWh on the wholesale price giving an increase of about 7% on the retail price.

    These increases are above and beyond 'normal' inflation.

    2. We also know that with better management and avoidance of peak prices, the annual average can be reduced, and we are starting to see the rollout of batteries as frequency response, being cheaper and faster than diesel farms or gas OCGT peakers.

    Interestingly, the adoption/rollout of storage, be it demand side, supply side, or both, will actually reduce the peak price and therefore the extremes of the peak in the peak and trough daily price cycles.

    3. We also have common sense and awareness, and a history of considering and pushing back on these claims of enormous leccy inflation dating back on these threads to about 2010 when some (not all) PV salesman and sites used them to justify prices.

    On that same subject, the exact same tactic is used, still, by one company - Project Solar - when posters come on and ask for advice on the deal they've been offered, which will almost always be 50%-100% more expensive than it should be, but seemed good to them when a breakdown of income was given. However the enormous leccy inflation figures are never written down on the quote, only made verbally.

    4. But, as you say, you can't take my word for it, so I'd refer you to the NAO who in 2015 revised down their peak price for leccy in 2029 of £85/MWh to a 2027 peak of £70/MWh - please see page 40.

    Then one year later, they further revised the peak down to £55/MWh through the 2020's, before dropping down towards £45/MWh and less in the 2030's - please see page 39.

    If we are generous and stretch to a 1.5p/kWh rise in the wholesale price, then we will see an approximate rise (from 15p/kWh retail) of about 10% over 10yrs, so about 1% pa simple, or 0.95% pa compounded. Again, this is the rise above and beyond normal inflation, but that can simply be put against the lost interest invested in a PV or batt system (cost of capital).


    A high energy inflation figure, compounded forward to improve the economics of an item is not going to go down well here - we've been there, seen it, fought tooth and nail against it, and got the memorial T-shirt to wear with pride.
    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.
    • Martyn1981
    • By Martyn1981 3rd Nov 18, 11:42 AM
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    • 13,672 Thanks
    Martyn1981

    This is because a key benefit of these systems is that you can fill them with Economy 7 in the winter when solar generation is low.
    Originally posted by TrevorL
    Firstly let me make it clear in case it's not evident from the thread, that I'm a huge fan of storage, and believe in its future very much.

    However ...... (you knew there'd be a but didn't you) ...... it's not as simple as that regarding E7.

    Looking at your batt prices, let me suggest a slightly favourable £5k for 10kWh, just as an example. Now, assuming a 10kWh use for the 6,000 cycles, that means a throughput of 60,000kWh's.

    So the cost of cycling 1kWh of leccy is approx £5,000 / 60,000kWh = 8.33p/kWh. Add that to the price of the E7 and you have a unit price of approx 15p/kWh, or to put it another way, no benefit at all.

    Of course it's not that simple:

    I'm very optimistic that the number of warranted cycles will rise (I can't use un-warranted cycle estimates at this stage as batts are too much of an un-known still, and the investment cost is too high to 'take a punt')

    I'm running figures at a 100% efficiency, which the batts won't have.

    I'm assuming E7 will continue and prices will remain low, but it was created primarily to find a market for nightime nuclear generation, but that may be fine with night time wind generation, but could be impacted by increased demand from EV charging.


    Again, I'm not knocking batts, but as Zeup has pointed out, we need prices to fall, and i believe we need the other side of the economic breakdown to improve, which is a significant increase in life expectancy and cycles, with warranties - double the cycles, and you half the cost of the batts (per kWh of throughput).
    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.
    • Martyn1981
    • By Martyn1981 3rd Nov 18, 11:53 AM
    • 8,687 Posts
    • 13,672 Thanks
    Martyn1981
    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.
    Originally posted by TrevorL
    I'm posting this separately as it's the exact opposite of what you have asked, just my personal opinion, but you might find the maths interesting.

    Assuming a baseline price today of 15p and a compound inflation rate of 8.4%, then in 10yrs time you get a price of = 33.6p/kWh.

    Assuming an inflation rate of 2%, you get a price of 18.3p/kWh.

    This gives us a difference of 15.3p/kWh or £153/MWh.

    Assuming (lots of assumptions, but hopefully they are fair), that any price increases greater than 'normal' inflation will be on the wholesale price side, then that suggests an increase in the wholesale price from approx £40/MWh today, to roughly £193/MWh in 10yrs time.

    From here, please refer back to my figures on the prices of leccy generation, and the NAO's revised estimates on the wholesale price of leccy. [Note, by excluding the 2% 'normal' inflation from my calculations, I have (hopefully) shown you the increase above and beyond that would be needed/due to generation cost rises.]
    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.
    • zeupater
    • By zeupater 3rd Nov 18, 12:53 PM
    • 4,813 Posts
    • 6,479 Thanks
    zeupater
    We rely on third parties to estimate future rises. The most recent update we've seen said 8.4% - I can't post links but you'll find it you Google for "UK Energy Price Rises Report 2017". Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    The second source clearly takes the view that electricity price rises over the last decade have little relevance to how they expect prices to increase over the next one as the market is being transformed.

    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.
    Originally posted by TrevorL
    Hi

    Your wish is my command ....

    https://www.ofgem.gov.uk/gas/retail-market/retail-market-monitoring/understanding-trends-energy-prices#thumbchart-c852534280570049-n95437

    ... nothing more independent than the official source for such things!


    Worst case scenario (big 6 SVT) over the (approx) 7 year period 01/01/2012 to 28/10/18 equates to a total ~20% increase, so ~3%/year on average, however, on the basis that there's been a shift away from the big 6 & SVTs over the period it's likely that the total increase would be closer to 14%, so ~2%/year on average ... looking at the best scenario (basket), the total 7 year increase shows as ~3.7%, less than half of the annual increase used in the justification, suggesting that the assumption could be overinflated by a factor of ~16x for those who would chase the best deals ....

    Ofgem's analysis suggests that a reasonable term price rise trend would lie somewhere between 2% & 3% per annum, so around 2.5%, so using anything outside this range should be regarded as dubious ...

    This can be double-checked against official ONS economic trends in the form of CPIH (housing based CPI) inflation as per ... https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l522/mm23 ... which suggests the average annual increase (2005-2018) runs close to 2.5%.

    With the strong correlation between Ofgem's retail energy market trend analysis and the ONS trend analysis on household inflation, there's a logical conclusion that any estimates for medium term domestic energy price movement should simply be related to the CPIH trend ... it would take a lot of convincing to suggest that this would be incorrect!

    HTH
    Z
    Last edited by zeupater; 03-11-2018 at 2:10 PM.
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    • zeupater
    • By zeupater 3rd Nov 18, 2:05 PM
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    zeupater
    I agree, which is why I wrote "I'd be the first to say these examples are not entirely accurate which is why we have a very complex mathematical model that we run for customers." A key element of the model is it compares the savings for 3 cases:

    1. Staying on a 24 hour tariff and adding a battery
    2. Moving from a 24h tariff to an Economy 7 tariff with a battery
    3. Being on an Economy 7 tariff and adding a battery


    This is because a key benefit of these systems is that you can fill them with Economy 7 in the winter when solar generation is low. Obviously only by cycling the battery daily can you get good paybacks. Our model runs an optimisation algorithm to calculate the percentage of charge that a householder needs to put in from Eco7 to optimise their savings (e.g. 40% in October and March, 65% in November and February, 90% in December and January, or whatever).

    While Economy 7 had largely gone out of fashion, it's now back and increasingly popular because of the rise of EVs. Certainly a significant portion of our customers have an EV or are considering one, so they may not be representative of the country at large.

    With this approach instead of saving the cost of a unit by using solar, you are saving half the cost by using Economy 7.

    The results from the modelling are pretty clear - the shortest paybacks are for those who are already on Economy 7 and just add a battery. Next best is moving from a 24hr tariff to Economy 7 with a battery, and least savings go to those who just stay on a 2hr tariff and add a battery (in which it case it will be idle for much of the winter).

    Another key element that is often ignored is lifestyle. At the risk of pointing out the obvious - but it doesn't seem to have been highlighted so far - home batteries are for people with solar who are out during the day. If we get an enquiry from someone retired or at home with small children we tell them straight up that it's unlikely to save them money. The benefit is for people who are out during the day - they are generating free solar but don't get to use it without a battery.

    Forums are imperfect means of communication, but hopefully through conversing we will see that we're not a million miles apart.
    Originally posted by TrevorL
    Hi

    That may be the case now, however what needs to be considered is that the reasoning behind the existence of 'cheap rate' tariffs such as E7 or E10 is simply lack of overnight demand during those hours ... offering substantial unit price discounts to entice consumers to change their demand profile reduces plant investment requirements & pays towards the overall operating costs of the plant when demand is low ... however, any assumption that this would continue to be the case is logically flawed ...

    Over the coming period there will be a substantial shift in energy demand profiles. In order to meet agreed emissions targets it's apparent that transport will move from fossil fuel to electrification, domestic heating will largely move away from GCH towards heat-pump technologies and various forms of storage technologies will become more prevalent, which really points towards a need to smooth demand across the entire 24Hr daily cycle to avoid unnecessary investment in little used generating assets ... this can all be supported within NG's ongoing future energy scenario analysis here ... http://fes.nationalgrid.com/fes-document/

    Storage, smart vehicle charging, heat-pumps etc will act to smooth demand, leaving smart-meters as simply being the 'big-stick' to wield to address peak demand issues through applying punitive HHM TOU tariffs, so when there's a balanced & smooth demand profile, where's future for 'off-peak' or 'cheap rate' tariffs?

    It's likely that the price differential between daytime & E7 tariffs will continue to narrow as demand shifts to fill the overnight supply/demand imbalance and over time E7 as a product will be 'sunsetted' & replaced by a purely demand based variable TOU tariff structure, which would logically favour a move towards cheaper weekend energy being available to 'top-up' storage ...

    The future for E7 looks more than a little ropey .. it would be unwise to base an energy storage investment strategy on it being tariff advantageous, or even available, throughout the estimated cycle life of any battery based product offering, whether domestic battery or EV (/V2H/V2G).

    HTH
    Z
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    • Martyn1981
    • By Martyn1981 3rd Nov 18, 3:58 PM
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    • 13,672 Thanks
    Martyn1981
    Hi

    It's likely that the price differential between daytime & E7 tariffs will continue to narrow as demand shifts to fill the overnight supply/demand imbalance and over time E7 as a product will be 'sunsetted' & replaced by a purely demand based variable TOU tariff structure, which would logically favour a move towards cheaper weekend energy being available to 'top-up' storage ...

    HTH
    Z
    Originally posted by zeupater
    The addition, subtraction and alteration of tariffs does make 10yr+ planning tricky.

    A TOU tariff I mentioned a while back was, accidentally, a perfect PV and storage deal (except for the relatively high daily charges).

    It was 5p nightime, 13p daytimes, and 25p week day evenings (4pm to 8pm I think).

    So for 6 months of the year PV would massively reduce daytime and peak rate usage, and the addition of a battery would most likely eliminate peak rate usage for 9 months pa. Then smart use of the nightime rate + batteries could eliminate the other 3 months peak use, which even at 5p import + 10p/kWh battery usage would still be acceptable.

    I'm sure we will see good TOU deals going forward that work well both with PV and PV + storage, but as always, need those storage prices to fall.
    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.
    • zeupater
    • By zeupater 3rd Nov 18, 4:05 PM
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    • 6,479 Thanks
    zeupater
    ... Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    The second source clearly takes the view that electricity price rises over the last decade have little relevance to how they expect prices to increase over the next one as the market is being transformed ...
    Originally posted by TrevorL
    Hi

    Just read the above referenced report through ... isn't it the case that the 6.7% projection is for Standard Credit customers only (the highest projected increase group) and covers the 5 year period 2016-2020 resulting in an average annual compounded projection of 1.3% ?? .... is it also the case that the overall projection (SC+DD+PP) for all GB domestic customers would be more appropriate to use within a cost justification and that it's shown to be 3.8% over the same 5 year period, therefore suggesting that the report data describes a compounded annual projection of 0.75% should have been used instead of the 6.7% you were using ?

    HTH
    Z
    Last edited by zeupater; 03-11-2018 at 4:10 PM.
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    • TrevorL
    • By TrevorL 3rd Nov 18, 4:13 PM
    • 18 Posts
    • 2 Thanks
    TrevorL
    1. Happy to go through all the latest CfD auction prices and estimates for nuclear and RE. We see the highest at £100/MWh for HPC, and of course gas lower, though we may see a rising carbon tax. So that's an increase of about 5p-6p/kWh on the wholesale price giving an increase of approx 33% on the retail price.
    Originally posted by Martyn1981
    Thanks for going through that argument in detail, and I'd be very happy to use a lower rate of price increase if it was justified, but I don't find that data convincing. However good the potential may be for low wholesale prices I see no evidence that retail prices are going up at anything close to just inflation. You also seem to be using quite old data. As I said we took 6.7% from the Commons Briefing Paper from February this year, but the other report I mentioned covers actual data from 2017 and states "The average increase suffered by all those Big 6 dual fuel customers who have been affected stands at 8.4%".

    I've just done a bit more Googling and found the following (from the Independent online "Why are energy bills rising and what can consumers do about it?"):

    The Big Six have made the following changes to bills since the beginning of the year:

    Npower: 5.3 per cent
    SSE: 6.7 per cent
    Scottish Power: 5.5 per cent
    British Gas: 5.5 per cent
    E.ON: 4.8 per cent
    EDF: 6 per cent
    Average: 5.6 per cent


    I can see an argument for going as low as 5.6 per cent, but not below it. Especially as many of these companies now do 2 increases each year.
    Last edited by TrevorL; 03-11-2018 at 4:15 PM.
    • TrevorL
    • By TrevorL 3rd Nov 18, 4:30 PM
    • 18 Posts
    • 2 Thanks
    TrevorL
    Looking at your batt prices, let me suggest a slightly favourable £5k for 10kWh, just as an example. Now, assuming a 10kWh use for the 6,000 cycles, that means a throughput of 60,000kWh's.

    So the cost of cycling 1kWh of leccy is approx £5,000 / 60,000kWh = 8.33p/kWh. Add that to the price of the E7 and you have a unit price of approx 15p/kWh, or to put it another way, no benefit at all.
    Originally posted by Martyn1981
    I have seen this argument before and don't find it useful. Certainly our products are warrantied for 10 years, and they have a specification of 6000 cycles, but they are not warrantied for 6000 cycles in 10 years. I think that's just a misunderstanding. 6000 cycles is obviously nearly 20 years of daily use so calculating the cost of a cycle assuming that they will do 6000 cycles in the warranty period and then be unusable is a blind alley.

    By all means if you need a product to payback within its warranty period then you may find a battery doesn't. But most people don't expect require that of other things, like a car. A better approach, in my opinion, is to model the degradation of the battery capacity over its lifetime. Our model does this, assuming 2% degradation per year, and uses that to calculate how much energy you will actually cycle through the system over time. Payback periods we quote to customers take this capacity loss into account.

    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. Myself I'm expecting, in broad terms, good capacity for the first 10 years, somewhat lower capacity for the second 10 years, and lower but still usable capacity (perhaps just 40-50%) after that. Anything after payback is a bonus. It's not that dissimilar to solar where we know inverters are typically only warrantied for 10 years but the system won't just die on the first day of the 11th year.

    That doesn't mean you're wrong if you require payback within the warranty period, just that that isn't a requirement for most of our customers.


    I'm running figures at a 100% efficiency, which the batts won't have.
    Originally posted by Martyn1981
    Our model uses the inverter manufacturer's specs of Charging efficiency of 94.5% and discharging efficiency 94%, so a round trip efficiency of 89%, but I'd be the first to concede we don't know how well this matches real-life usage.
    Last edited by TrevorL; 03-11-2018 at 4:37 PM.
    • TrevorL
    • By TrevorL 3rd Nov 18, 4:49 PM
    • 18 Posts
    • 2 Thanks
    TrevorL
    The future for E7 looks more than a little ropey .. it would be unwise to base an energy storage investment strategy on it being tariff advantageous, or even available, throughout the estimated cycle life of any battery based product offering, whether domestic battery or EV (/V2H/V2G).
    Originally posted by zeupater
    I agree generally with the initial statement - but not the conclusion. IMO the more time of use options and tariffs become available, the more benefit you get from a battery.

    As well as the Tide tariff mentioned in another post, a very interesting example is the Octopus Agile tariff with 'Plunge Pricing' where you can actually get paid to take excess electricity off the grid. I think their implementation is a bit ropey, but it is hopefully a portend of more interesting options to come.
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