# Guest Post: Bruce of Newcastle – Does going off-grid make sense?

No.

But that would be a very short post, so this is a post about how you can do a simple Net Present Value (NPV) calculation to see if any investment is worthwhile.  Net Present Value is a method of financial analysis widely used in industry to see whether a project is worth pursuing.  The answer is very simple:  if the NPV is greater than zero it is viable. If NPV is less than zero it means you are making a loss on your investment compared to what you could get doing something else with your money.

In this post I’m looking only at the Excel NPV function, since it is quick and easy.  Many people have Excel available from the home version of MS Office, or their kids may have it on their school laptops.  Here I’ll do a NPV calc for the use of solar panels with a battery and generator to go off-grid.  I’ll use Excel’s goalseek option to work out how much this costs in cents per kWh.

For some assumptions, I’ll use a 4 kW solar PV set up based on Sydney prices (\$6,557, which includes Federal subsidies).  I’ll assume the panels produce for 8 hrs a day.  The battery is a day of capacity as new, so at 4 kW and 48 V the calculation is:

Ah required = 4 kW x 8 h x 1000 / 48 V = 625 Ah

Without chasing around for deals, I’ll just go find a 48 V and 600 Ah battery, which from this shop is priced at \$9,336.  Obviously a single day of capacity won’t get you through a week of wet weather, but batteries are expensive, so we’ll add a generator for long periods of no-Sun.

The generator has to be sized for peak amperage, so I’ll go for one which does about 6 kW, which I’ll grab randomly from this generator shop for \$4,350.  I don’t know exactly how much diesel it will consume, but I’ll use 1 L/h as an estimate.  We’ll assume that solar can do the job for 275 days a year, so the diesel generator will be running 8 hrs a day at 50% capacity the other 90 days a year, with the battery doing the load levelling.  So that is 90 x 8 = 720 L of diesel per year.

I don’t know what the installation cost for this whole system is, so I’ll just use \$2,000 as a rough number.  It would probably be much more, but this will do for a rough calc.

So we have for the capital cost the panels (\$6,557), the battery (\$9,336), the generator (\$4,350) and the installation (\$2,000).  For operating cost I’ll take the diesel at \$1.50/L (\$1,080/yr), some insurance at \$5/week (\$260/yr) and some minimal maintenance (\$100/yr).   I’ll assume the investment is over 10 years for the calculation.  Both the solar panels and the battery will lose capacity over time, and after 10 years the battery would probably be completely dead, but a simple 10 years will do for a rough calc.  With these assumptions the spreadsheet looks like this:

The power produced in this case is all the power you have consumed: 4 kW x 8 hrs = 32 kWh per day, which is 275 days of solar power and 90 days of wet weather generator power.

To work out how much the off-grid power cost you, you use the Goal Seek tool as shown.  It can be found in the What-If Analysis item in Excel 2010.  By hitting OK with these settings the NPV is set to zero by adjusting how much you “get” for the power.  It is necessary to enter an interest rate, ie. cost of capital, into the NPV function so I’ve chosen 7%.  As you can see your solar power setup cost you about 40c/kWh with this set of assumptions.

What this means is if you can buy electricity for less than 40 c/kWh from the grid you would be better off, but if the purchased electricity costs more than 40 c/kWh you would be ahead with your investment.

With this spreadsheet you can also see how much you make or lose.  So for example if you enter a Power value (cell L3) of 25c/kWh the NPV will come out to -\$11,073.  You are behind \$11,073 compared to using the \$22,243 to pay down your mortgage at 7% instead.

These numbers are just quickly pulled together.  The aim of this post is to show how you can do a fast and simple financial test of any investment using the NPV function.  The warning, as always, is this calculation is only ever as good as your assumptions.

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### 147 Responses to Guest Post: Bruce of Newcastle – Does going off-grid make sense?

1. Leigh Lowe

I don’t see where you’ve factored in dPB, Bruce?

2. Bill

Just a couple of very quick things I noticed, that I think are wrong

Solar panels actually produce about 12% – 15% of capacity, (not 33% as you seem to be assuming).
But panels last 20-25 years, declining only slowly, not 10 years

3. Driftforge

Only quibble I’d have is that if you have a battery in your setup, there is no need to match the genset capacity to peak amperage, as you provide that from the battery set up. All you have to do is charge the batteries when there is no sunlight.

The damning thing about this is that 39c/kWh is not that much more than we are paying on grid. Yes, it’s still more, but with all the green on-costs its a lot closer than it should be when generation costs at scale are 4-6c/kWh.

I know a number of the gas supply companies are sniffing around the edges for cheap, home scale ways to convert gas into electricity given their energy price advantage (about 3 to 1 here). Unfortunately small scale engines don’t quite have the efficiency required, and fuel cells are still too expensive from a capital perspective.

4. deisal

Thanks for this, I am considering going off grid as my new house is to be built on my farm and the cost of a transformer is at least 50K along with the underground power cable. Given that Victoria is about to elect the red green filth again, our power prices will be going up even further.

5. Bruce of Newcastle

Leigh, its a rough calc. In most of the companies I worked for they don’t use DPB (I am assuming you mean this definition). Some like IRR, most like NPV. And they want NPV to be big and positive.

The industry spreadsheets I’ve used are very large and very detailed. This is an ultra simple look at NPV in a way hopefully people can do at home.

6. Leigh Lowe

No, Bruce, that’s not what I meant.
dPB = Poley Bears (deceased).
Must be factored into all Renew Ball calcs along with DSG (Disenfranchised and Sad Grandchildren)

7. Bruce of Newcastle

Oops that was DPP, not dPB. What do you mean Leigh? I do financials and science, I am not a solar or energy expert. Sinc asked for a post here.

8. entropy

I think you have the panels running more effiently than they really can, but opn the other hand wouldn’t you just buy a bank of 120 Amp hour batteries at around \$230 each? Or do they have to be 48 volts?

9. Leigh Lowe

No worries Bruce.
I just went a bit warmy head-tilty for a minute there.
Normal transmission will resume shortly.

10. Bruce of Newcastle

Entropy – I Googled the solar batteries and picked one near the capacity for a day of backup. The site I linked offers 12, 24 and 48 V packs. I suspect you could find a better deal, but in the NPV space you almost always underestimate cost items. The engineering consultancies add 30% for contingency in a prefeasibility level study, and this is ‘way below that.

11. Rabz

dPB = Poley Bears (deceased).

LOL.

12. Rohan

Bill
#1456166, posted on September 23, 2014 at 12:41 pm

Solar panels actually produce about 12% – 15% of capacity, (not 33% as you seem to be assuming).
But panels last 20-25 years, declining only slowly, not 10 years

PV arrays rate of capacity loss occurs within the first 7-10 years. This paper linked says it can be between 20-50% depending on the technology used. I’ve read (but can’t find the link) that can be as high as 70% of their rated capacity at 4 years (UV degradation in extreme UV climates). In any event, start up adding the performance drop due all the factors in the real world, and that generator is going to get a massive workout.

However, for a rough “back of the envelope” calculation, with assumptions clearly defined, this wont be far off the mark.

13. MsDolittle

What a cracker BofN! Where is Bilby?

14. JC

What a cracker BofN! Where is Bilby

He’s in ER. He went into heart failure when he read the post. The ambulance dudes had to use paddles on the fucker because it stopped beating for 10 minutes. But there’s no further risk of brain damage as only a small part of his brain stem was functional anyway. Good news really.

15. This is an all time great smackdown. Like when I showed Bird per Foley v Hill that fractional reserve banking was legal.

16. Leigh Lowe

All jokes aside Bruce … the cost of the kit … is that gross, or net of taxpayer subsidy?

17. egg_

So the say 85 dBA rating of the Gen-set is dead polar bears (anthropogenic)?

18. Bruce of Newcastle

Leigh – The solar pricing site says its inclusive of the “federal STC incentive” and GST too.

Here is a nice paper on solar panel degradation rates. Its better than I thought, though the cheap ones are probably the ones which fail quickest.

I don’t know about the lifetime of deep cycle batteries used for off-grid systems. There are a couple good articles here and here. My personal experience with lead-acid car batteries is 5-8 years and Li-ion batteries less than that.

19. yackman

The exercise tallies with the simple payback checks I have done when looking at Solar PV without battery backup. I also have an objection to use of the house roof area for reasons of safety and access and consider ground based arrays to be much better for maintenance such as basic cleaning. Ground based can increase cost. Space is not an issue for us which would be the case in a city. Very interesting article in a recent “Chemistry in Australia” on the concept of Energy Return on Investment (EROI) which concludes that once the backup battery system is included that solar and wind barely break even and cannot produce the surplus required to run amodern society.

20. Elizabeth (Lizzie) B.

The warning, as always, is this calculation is only ever as good as your assumptions.

Yes. You are an honest modeler, Bruce.
Not like the glowball warmers, who never ever admit to any questioning of their assumptions.

21. egg_

I don’t know about the lifetime of deep cycle batteries used for off-grid systems.

Could be a major cost determinant; doubtful any would last the 20-25 year term of the solar cells and very likely you get what you pay for, the cheaper ones lasting much less than the dearer ones (impurities); Prius batteries standard warranty is 8 years (2004 model, c/- Forbes).

22. cohenite

BON, you may be interested in this calculation from 2009 about the cost comparison of solar panels.

It is from the viewpoint of CO2 emissions but the relative costs were interesting.

23. Youallwanttobeme

but you are forgetting the sun is free and will last forever. so your assumptions are wrong.

24. JC

Dude,

Go do some homework and eat the afternoon snack you mother made for you.

25. tgs

XNPV > NPV.

But great back of the envelope calc. Very interesting.

26. Chris

I know a number of the gas supply companies are sniffing around the edges for cheap, home scale ways to convert gas into electricity given their energy price advantage (about 3 to 1 here). Unfortunately small scale engines don’t quite have the efficiency required, and fuel cells are still too expensive from a capital perspective.

There is a household gas driven 2kW electric system that also doubles as a hot water heater (presumably uses a lot of the waste heat to warm the water and so is quite efficient). However given the increased gas export capacity which means we’ll soon be paying gas prices much closer to the regional price rather than what we’ve been used to in Australia I’m a bit skeptical it’d pay for itself.

I looked into battery backed systems a few years ago when I built my house not because I wanted to go off-grid but because I work from home I wanted to be able to still have power & a/c in summer when the power failures are most common. And it wasn’t financially viable because of the short battery life and high cost of the batteries. Might have got a lot better in the last 5 years though.

Grid connected solar PV in places like Adelaide where peak electricity pricing gets close to 40c/kWh is a no brainer though – pay off times are quite short if you have good orientation for the panels – only a few years.

Ground based can increase cost. Space is not an issue for us which would be the case in a city.

If you have lots of space and want to put them on the ground you could have them mounted on a rotating frame which would allow you to maximise efficiency (eg they’d track the sun during the day).

27. Leigh Lowe

but you are forgetting the sun is free and will last forever. so your assumptions are wrong.

Written your letter to Santa yet?

28. Youallwanttobeme

family gets cheap electricity for ever
one day sells electricy because coal is illegal.
forever
you guys just don’t accept the science

29. Youallwanttobeme

if you could make forever a number in your equation it would change everything

30. Youallwanttobeme

people tell lies here because gina pays for this.
but then the lies get told everywhere. that’s the problem. sites like this should have equal time for difference views.

31. JC

Go do homework.

32. Leigh Lowe

Ahh … whilst we are on the subject of batteries, what about the costs of disposal.
The greenies will make sure we don’t put those in landfill without clicking the ticket.
I know it will be at the end-of-life so NPV might be low but every little bit helps.
To use Greenie tactics against them, that strikes me as an excellent deterrent as most Solar types love the idea of “no more to pay” – the thought of a massive disposal bill hanging over them will be a real albatross.

33. Leigh Lowe

if you could make forever a number in your equation it would change everything

“Forever” is a number in an NPV equation, fuckwit.
It is about the costs and benefits of the capital equipment used for generation.

34. Elizabeth (Lizzie) B.

but you are forgetting the sun is free and will last forever

Expensive, carbon-eating solar panel production isn’t free though and those things don’t last forever.
In fact they are not very robust at all. Nor are they very efficient at gleaning on dull days, and storing.
They are also ugly, just a minor disadvantage, unless you live near a solar ‘farm’.
They have been proven useless in Spain and are rust-bucketing away. Just like the de sal plant here.

35. Leigh Lowe

Go do homework.

Preferably arithmetic, then spelling.

36. Elizabeth (Lizzie) B.

haha. Snap, Leigh.

Sunshine doesn’t comprehend too well, you know.

37. Elizabeth (Lizzie) B.

Wow. I certainly don’t want to be you, Sunshine, because you can’t think, write or spell.
What has Gina got to do with this, or Catallaxy, you zombie?
Duh, Gina, duh. That’s about it from you for intellectual content.
Go and be useful. Turn on some lights somewhere, preferably in your head.

38. Derp

Mess with the bull…

39. Alan Moran

Excellent piece Bruce,

It would make a great article comparing different power sources to the home though that too would require assumptions re calorific value of gas, coals and so on.

Have you tried doing the analysis net of the subsidy?

Incidentally, am I doing something wrong because I make the annual cost at 7% with the \$1440 included at only \$2997?

40. cohenite

but you are forgetting the sun is free and will last forever. so your assumptions are wrong.

That’s bullshit; at night there is no Sun.

41. chrisl

Of course the numbers would look a lot different if there was a tax on CO2 of \$50 which is easily manageable according to a certain Prof JQ
And a shetland pony would win The Melbourne Cup if the other 23 horses had to tow an anchor!

42. Rabz

one day sells electricy because coal is illegal.

It’s “electrickery”, you dingbat.

43. egg_

Prius batteries standard warranty is 8 years* (2004 model, c/- Forbes).

Similar ‘Panasonic EV’ NiMH battery in the current model 4G Prius and same warranty (but they’re talking of going Li Ion in future).

*A very realistic assumption, from what I’ve seen of studies (Lipman) of 100% battery electric vehicles (BEV).

44. Bruce of Newcastle

XNPV > NPV

For anyone wanting to know what this is about, here is a good summary.

Ahh … whilst we are on the subject of batteries, what about the costs of disposal.
The greenies will make sure we don’t put those in landfill without clicking the ticket.

Leigh – If they are lead-acid batteries, they are recycled. About 80% of lead metal production is recycled material mainly from batteries, only 20% is newly mined. Recycling may be lower in places like China.

Incidentally, am I doing something wrong because I make the annual cost at 7% with the \$1440 included at only \$2997?

Alan – In the Excel function the WACC value goes into the function directly. The \$1440 is just the raw sum of the operating cost items, the \$4,607 is the power “price” multiplied by the kWh/a. The difference between the two totals is the \$3,167 under each year number. All is in dollars of the day. There is no depreciation because there is no tax since you aren’t selling the electricity – you are just not buying it.

When I do NPV’s for work I don’t use the Excel function, I do it the hard way, with varying inputs and everything. Some jobs even go so far as ROA, which I think is too far.

45. tgs

I’m guessing you work in resources, Bruce (from the ROA)?

When I do NPV’s for work I don’t use the Excel function, I do it the hard way, with varying inputs and everything.

What do you mean by the ‘varying input and everything’?

A well built project finance/corp finance model in excel will do that for you.

46. tgs

Also the Newcastle thing is another hint, heh.

47. Bruce of Newcastle

What do you mean by the ‘varying input and everything’?

tgs – Conventional PFS through DFS/BFS spreadsheets. I mainly operate at the PFS end. Yes, using the standard corporate templates and methods. Its not my main job. That is science, but if you go to someone and say ‘I have this great idea for making electrolytic imaginarium’ he will say ‘what’s the NPV?’ Or etc. So I’ve done many dozens of PFS level studies over the years.

48. egg_

Prius batteries standard warranty is 8 years

At which point their capacity may be just > 25% of full capacity (at which point may generate a replacement required fault code, apparently); so of course a much worse scenario in a 100% battery electric vehicle.

I know a couple of people (deep Green) who live in the bush off grid with solar. They say that system maintenance is way more expensive than expected and the biggest bugbear.

50. egg_

… same warranty on a Tesla (also with a battery replacement option).

51. Oh come on

Great stuff Bruce. Excellent piece.

52. Youallwanttobeme

its like you don’t see what you are doing
how do you sleep at night
?

53. Mk50 of Brisbane, Henchman to the VRWC

Been busy.

Just to reply to that syphilitic chancre refugee from Lavatory Rodeo BilB (AKA DilDo)

For starters MK the corn variety Guatamalans grow is not the variety used for ethanol production or western food consumption. Secondly the Guatamalan food problem is due to a Global Warming induced drought with massive crop failures.

Listen you racist little shit, have you never heard of a thing called a ‘ship’? Guatemala is not self-sufficient in maize and has not been for a very long time. They have used these amazing conveyances called ‘ships’ to very cheaply move cheap US maize from US Mississippi ports to Puerto Santo Tomas de Castilla. Mostly in containers filled with sacked maize for easy distribution by truck. Bulk maize is imported in bulk through the west coast – Puerto Quetzal. Pacific Grain Terminal runs them, in recent years they expanded storage capacity by 14,000 tons to 50,000 tons – for imported US maize. Why? Yes, the ENSO drought – which means they have to import more staples. But theya re more expensive now, because so much of the cheapest food on the planet’s being turned into biofuels!

The murderous bastards here are those who are preventing climate change action, people such as yourself. This responsibility should weigh heavily on your mind, but somehow I doubt that you understand this.

Wow, he’s still a real, live, chair-leg savaging cli-fi true believing gaiain cultist! How so very nineties.

So, having driven up the price of the planet’s cheapest food, US maize, by diverting it to biofuel production, and given that a routine ENSO drought in Guatelama affected local crops, the locals found themselves unable to afford now-more-expensive US remnant maize after racist chair-leg-savaging scum like you insisted it be turned into biofuel. Some for people on \$2.00 a day, something had to give. And that was meat and much of their vegetable consumption.

And infant mortality spiked as a result.

And DilDo blames this on something which every empirical measurement for nearly 19 years says is not happening. Well, of course. And we know the reason.

Because it’s funny how that lie absolves racist greenfilth killers (BIRM) like you of any responsibility for stealing the food of the world’s poorest people so you can feel smug about using biofuel.

Obviously you refuse to acknowledge any link between using food for fuel and higher process for the remaining food.

Shorter racist BilB – let little brown chappies drink petrol!

oOo

DilDo – The Primal Scream…

I am not going to argue against your data extractions. They are at odds with every other evaluation excepting those found on a handfull of contrarian websites. From what I can see from graph overlays of the various databases there is a reduction in the rate of climb of global air temperatures, a pattern that has occurred several times previously followed by resumption greater temperature rise. The only conclusion that can be drawn from that is that temperature rise is continuing. It is extremely speculative at best to predict an ice age from body of global data.

A more abject and grovelling surrender is not possible to imagine. The standard tactic the filth use is on show here, drawing the tattered rags of preening self-assessed moral superiority about itself, sticking the snobbishly elitist snoot in the air, and pronouncing that you are not worth arguing with, peasant. Bog-standard, and it means he’s completely crushed. This post adds to that, well done, it’s one of the best eviscerations of a greengaia cult holy-roller I have seen for years.

DilDo:

My comment is that MK50?s claim that Guatamalan malnutrition is related to biofuels is blatantly false. And here are the reasons. Make of it what you will.

Oho! This will be entertaining.

” Tortillas in Guatemala are made from white corn, while U.S. ethanol is produced from No. 2 yellow corn. Very little white corn is grown in the U.S., but acres dedicated to white corn have not been reduced since passage of the RFS. These two types of corn have distinctly different global markets, demand drivers, and price pressures. It is entirely disingenuous to suggest stronger demand and tighter supplies of No. 2 yellow corn in the U.S. are significantly influencing local white corn prices in Guatemala. – See more at: http://www.ethanolrfa.org/exchange/entry/dont-believe-everything-you-read.-fact-check-on-nyts-guatemala-corn-ethanol/#sthash.W9Bx49qZ.dpuf”

Hahahahahaha! The greenfilther’s actually appealing to the wealthy Obama-crony-capitalists profiting from biofuel subsidies to justify starving the poor! How much more racist can this scumbag actually get? How progressive of him…. Yes folks, because going to the subsidised entities hoovering up the food for ‘proof’ that they are not the cause of the problem’s always gonna be a good look.

And as everyone knows, if the choice is between starvation and yellow tortillas, obviously, the peasants must choose to starve to death. It’s the progressive way.

You are the compleat racist greenfilther, are you not?

What I said, you contemptible cretin, is that to afford maize, they had to give up meat and most vegetable intake. Maize prices rose because it was diverted to biofuel, reducing the volumes available to people and cattle feedstocks. And of course, no-one would EVER divert different corn to cattle feed. It is not amazing at all they you cannot comprehend the idea that shortages generate higher prices – you are an imbecilic greenfilth economic illiterate, after all. And thanks for proving that in public.

That coupled with climate contradictions relating to the region’s Southern Oscillation response which has all of South America preparing strategies to cope with the Climate Change that they are already experiencing, dump MK’s argument in the trash can.

And he adds some waffle about things he does not understand and by the magic of the greenfilth witch doctor, all facts to the contrary vanish! One needs no more proof that this cretin is a dogmatic religious cultist. And of course he says glowaball awarmenating dunnit. Yet, there’s been no temp increase since 1998 and the world-ocean is cooling. Not surprising since we are in an ice age.

As for Guatamalans buying US maize, sudsistance farmers do not have the purchasing power to buy US agricultural products.

Riiiiight. Because when people are starving, it’s always up to the individual subsistence farmer to charter a ship to bring him some food. Hey, every retarded progressive racist knows this…

Think the Guatemalan Government might not have noticed the issue, appealed for funds, and shipped some bloody food in? What do you think TerPac spent money on at the bulk grain handling port for – shits and giggles?

These farmers cannot raise the funds to improve their own farming techniques let alone buy other crops from far wealthier producers when thie own crop fails.

So in DilDo-world, poor subsistence farmers must buy everything themselves individually or starve, and even as benighted a government as Guatemala has will never lift a finger to appeal for food aid funding.

Well, well, well! So much for the UN and all those oh-so-proggie NGO’s then! As they are, in your view, absolutely worthless at alleviating human suffering, the UN and all those oh-so-progressive NGO’s should all be shut down.

God you are a racist idiot, truly you are the lowest of the low, a moral coward, unethical, and amoral monster – genuinely evil. You could skydive from a snakes arsehole and free-fall for a week before having to pull the ripcord. You are getting your rocks off at the thought of little brown people being starved to death for biofuels to ‘save da planet’ from… something that is not happening.

Something even the IPCC says is not happening.

54. Spider

And let’s not forget the cost of folk falling off ladders and roofs maintaining and cleaning their solar panels. Not joking.

55. Mk50 of Brisbane, Henchman to the VRWC

Some dribbling illiterate (has to be yet another greenfilther)

Smart move!

But the people are cretins

family gets cheap electricity for ever

solar systems last forever?
You are a moron.

one day sells electricy because coal is illegal.

You racist shit. You want to imprison half the population of the planet in poverty because they are not your skin colour.

forever
you guys just don’t accept the science

Whereas you can’t even spell it.

if you could make forever a number in your equation it would change everything

How’s your perpetual motion machine goping, you illiterate racist cretin?

people tell lies here because gina pays for this.

Gina? She’s the girl down at the local pharmacy. Nice young lass. And no, she’s not paying for this.

but then the lies get told everywhere. that’s the problem. sites like this should have equal time for difference views.

What’s a ‘difference views’?

OPh, I forgot, you are an illiterate racist and kumbaya redneck: you mean different views.

Ove to you.
Go for it.
I enjoy the sport.
Your major problem will be that Here there be Dragons!
In the form of actual economists, real farmers, real scientists (like Bruce), military and ex-military types (so far security, infantry, artillery, SOF, navy and RAAF types have declared themselves), law enforcement types… the list goes on.

So over to you, argue your case. You will not be banned – but you will be argued with, and people will use reality, facts – and in my case your own lefty tactics against you.

Man up and fight your corner, arsehole.

56. Peewhit

Mk 50 I think you do express yourself rather well. On the other hand it is my opinion that if you can’t argue both sides then you are not looking at it clearly. In a matter of opinion then you need to be able to defend your opinion, in a matter of numerical literacy you need to be able to add. I am not sure our friend upstream can argue either side adequately, or work the numbers.
In the case of recycling of batteries, most of them have a value that means the only recycler in the magical land of Oz gets as many as possible at the lowest possible price. For a while there was one recycler, then there were two, who combined to make one, and the price of old batteries fell again.
Deep cycle batteries for power storage not in motor vehicles have purer lead plates which last longer. So as I remember from my childhood the batteries for power storage have quite a long life. Unless one of the dangers of them is triggered. When charging they release hydrogen, and as my father found a careless spark can mean a possible sulphuric acid bath. I understood from him that such explosive moments are exciting.

57. Bruce of Newcastle

Peewhit – if a lead acid battery gets a dendrite then you can’t do much about it (legally). It short circuits. Likewise if the anode or cathode corrodes or plates unevenly you’ll lose capacity. And lead sulphate or PbO2 can uselessly end up on the bottom.

I’ve not worked in that industry for a while, however if you take your battery to a depot such as my local council operates you can give it to them without charge. Leigh was asking about the cost of disposal. In this case it is likely to be zero. I did not say you would get anything for your battery, but I have done work for secondary lead plants and I know what they do. The biggest problem I understand is the PVC, but that’s not much of a problem.

58. BOOM. That perpetual fucking idiot Bilby got smacked pretty hard. He thinks global warming “killing people” is murder. He actually called Rockerfeller the greatest murder of all time. it is bad enough he can’t understand that solar isn’t financial, even with subsidies, he makes shit up about global warming that belongs on Rense Dot Com.

Some of Bilby’s intellectually disadvantaged friends:

59. Mk50 of Brisbane, Henchman to the VRWC

Peewhit, I like to mock the presumptuous pretentiousness of those who self-appoint themselves to a position of moral superiority.

This includes every single green, accurately described as ‘greenfilth’ for their callous indifference to the vast human suffering and loss of human life they cause, promote and enjoy. At heart, a greenie is a left-wing racist and totalitarian. They disdain actual conservationists, and we loathe them, and hold them in deep contempt.

As for Bruce – he’s a scientist and has amply proved his bona fides here over some years. His rough approximation above is a simple thing, I am astonished that anyone objects as it is easy and simple to replicate, and so, to validate. Check the other thread for how effortlessly he crushed the far-left idiot BilB.

I question your contention that it is necessary to argue both sides; to understand the other side yes, but what need is there to argue their case? That’s their task.

Generally, greenfilthers are in no position to actually do so outside of teh goat-cheese circles they infest due to their poor education, inability to process data, and basing their position on emotion, fantasy and delusion. I worked for many years in an environment where the equation was simple, and Darwinian. Know your business very well, for should you really have to compete using your professional skills, the loser dies. Concentrates the mind wonderfully. And quite a few died anyway (damned training accidents).

This is why few lefties venture here and normally run away crying, for it’s a realm of fact and ruthless reality.

And they are good at neither.

60. egg_

Deep cycle batteries for power storage not in motor vehicles have purer lead plates which last longer.

Balanced against co\$t – per previous replies; the subject of the original post…

61. Tel

The grid connected guy must pay about \$2700 over those 10 years in order to stay grid connected. That probably won’t swing it, but worth noting.

Also, as others have said, you could get away with a smaller generator given the large batteries (run the generator during the middle of the night to bring up the battery charge while you are not loading the circuit). Contrary wise, if you do have a generator capable of peak load, you can optimise the battery size to balance battery costs against fuel costs.

I once calculated that Joule for Joule it is cheaper to cook dinner over a tin of petrol mixed with sand than to cook dinner with an electric stove top (going on Sydney prices). The price of both petrol and electricity have gone up since I checked it but by gut feeling the petrol is actually more advantageous now. DISCLAIMER: Electricity is safer… kids don’t try this just to save a buck, if you are poor, eat your tin of beans cold with a cheap white wine.

I wonder if there’s a claim for rebate if you don’t take your generator out in any public roads?

62. Snoopy

I wonder if there’s a claim for rebate if you don’t take your generator out in any public roads?

Yes, there is.

63. Mk50 of Brisbane, Henchman to the VRWC

Hey, where’s BilB??

Should we start lifting flat rocks?

64. egg_

the battery (\$9,336)

Plus freight for 840 kg to Woop Woop?

65. Leo G

I’ll assume the panels produce for 8 hrs a day.

That’s something of a stretch.
In outdoor pv designs, the output current at maximum power is approximately proportional to light intensity at intensities close to the design level (nominally 1 kW/sqm). But at lower intensities the conversion efficiency drops off much more rapidly. The consequence is that the output of most rooftop pv systems is minimal when the light intensity drops below a threshold close to operating design level- how close depends on the ‘quality’ of the system.
A rooftop pv system in Sydney typically generates equivalent to an annual average of about 4 hours per day.

66. Joe

When we built here I was quoted \$75 000 to connect to the grid so while the house was being built I did some homework and built my own system.
20 24 volt 180 watt solar panels.
30 12 volt 120amp/hour glass matt battery’s wired to 24volt. That’s 1800 a/h at 24 volt.
2 60 amp solar chargers.
4000 watt Latronics inverter.
6hp Yanmar diesel driving a 100amp 24volt truck alternator wired to fire up if the battery’s go below 22 volt (Yanmar has run for a total of 8 hours this year) .
This gives us enough power to run a 5 bedroom home (2 adults 5 kids) with aircon in the main bedroom.
All that for a fly shit over \$25 000.
I went with 24 volt because I’m a heavy diesel mechanic and have been playing with 24 volt most of my life.

67. john constantine

I was keen on ground effect heat pumps, using the open space around the house, and a long downhill slope to access the underground temperatures, always more moderate then exposed air temperatures.

Simple air movement systems are cheap to install and get circulating, but the open nature encourages insect and arachnid colonisation,and damp pipes enable mould and all sorts of legionaire style infectionss and spores.

One day i will settle for just a mallee pioneer style underground wine cellar.

68. JohnA

Tel #1456611, posted on September 23, 2014 at 7:54 pm
and others discussing the running of the genset:

Also, as others have said, you could get away with a smaller generator given the large batteries (run the generator during the middle of the night to bring up the battery charge while you are not loading the circuit).

Don’t forget that 90 days x 8 hours is an awful lot of noise to be abated. Midnight? Yikes what about Sydney curfews? And no doubt other locales will have similar limits – strewth, you can’t even run your lawn-mower on a Sunday morning…what chance a diesel generator?

69. JohnA

BON, running a diesel generator for 720 hours per year doesn’t sound much but might require maintenance x 4.

So a small quibble, but your \$100 might go to \$800pa if you add in a 20L oil change (say \$100 each), filters plus service mechanic time.

Doesn’t change the conclusions but counterbalances the supply charge factor from the grid which someone mentioned.

70. JohnA

Snoopy #1456621, posted on September 23, 2014 at 8:00 pm

I wonder if there’s a claim for rebate if you don’t take your generator out in any public roads?

Yes, there is.

Shock! Horror! A tax rort of \$275pa?? 🙂

71. BilB

BilB is right here but extremely busy.

http://www.solarcharge.com.au/solarpanelsaustralia.php

I have not done the npv calculation, I do that on the plane Friday. But a quick calculation that I use is earnings over cost which for the system I described gives a ratio over the life of yhe asset of 4.5 to 5.2 depending on how the energy is used, ie powering a hybride car on a daily basus as well.

This is a very respectable earnings factor which is further improved in realising that this is a passive income which is stable over the life of the asset. Ask your power company to give you a contracted and guaranteed electricty price for 40 years to test the stabilty of your grid connection.

*passive income. I can achieve much higher earnings ratios from production machinery, but these have running costs and require constant attention. A quality solar panel system has the potential to earn one third of the cost of the average mcmansion over the term of the mortgage. Your grid connection will do the exact opposite.

72. I have not done the npv calculation, I do that on the plane Friday.

Yeah right. You’re a high flyer, living off subsidies.

*passive income. I can achieve much higher earnings ratios from production machinery, but these have running costs and require constant attention. A quality solar panel system has the potential to earn one third of the cost of the average mcmansion over the term of the mortgage. Your grid connection will do the exact opposite.

What a clueless, lying idiot.

73. BilB

I see you’re the rostered duty idiot today, “dotty”.

74. Bruce of Newcastle

BilB – I’ll keep an eye on this thread if after Friday you want to chat NPV’s or methods. The industrial financial analysis approach is to make things as transparent as possible (so for example the spreadsheets are banned from using macros). The idea is you have to be able to audit the calculations and defend them. Which is a pretty good philosophy for investment, green or otherwise. Hope your trip goes well.

It was interesting that both R&R and Piketty fell down badly on spreadsheet errors this last year.

75. BilB

I tested your NPV calc on another package BoN I see how you came to your conclusions. Next I test your assumptions, and then redo the NPV calc in several ways. In the end your cal simply factored the capital cost, the interest rate, and earnings which were determined arbitrarily by the solve function. Your system is heavily weighted on storage which unnecessarily stores a whole days energy, nice to have but excessive.

The system I am calculating for has storage split between electrical and thermal (water heating for which I account the electrical grid value at the off peak rate). I rate the PV at 4.5 kw and the same in thermal (effectively a 9 kw system) and include NO subsidies. I haven’t spec’d the generator but it will be small, gas powered (single fuel for the household). The system is designed as a modular self install, and, though not included in the figures so far, has a safe panel cleaning feature.

https://powersuite.cummins.com/PS5/PS5Content/SiteContent/en/Binary_Asset/pdf/Commercial/SparkIgnited/a-1559.pdf

For a solution to be commercial and deliver what people need it must be designed to be cost effective and efficient.

You’ve spec’d a late fifties Chinese made cadillac, I’ve spec’d a Japanese made corolla. One is intended to fail, the other is designed to succeed.

76. egg_

The system I am calculating for has storage split between electrical and thermal (water heating for which I account the electrical grid value at the off peak rate). I rate the PV at 4.5 kw and the same in thermal (effectively a 9 kw system) and include NO subsidies. I haven’t spec’d the generator but it will be small, gas powered (single fuel for the household). The system is designed as a modular self install, and, though not included in the figures so far, has a safe panel cleaning feature.

Due to urban noise limitations, a practical system would have to be in a remote area (pushing up freight costs) to compete with (costly) establishment of a grid connection.
Price of bottled gas?

77. BilB

If you read the gen spec, egg, you will that it is rated at 61 dba at normal load, and that cancde operated up to 10 pm. By 4pm a system would know if it required a top up. Noise not an issue. If you read Joe’s comment above the need for top up of a managed system is minimal. If a system requires regular top up then it most likely needs more panels.

Price of bottled gas not prohibitive from evidence to date.

78. Bruce of Newcastle

In the end your cal simply factored the capital cost, the interest rate, and earnings which were determined arbitrarily by the solve function.

Yes, BilB, that was the point of the post – a simple calculation that anyone could do, based on the standard project evaluation methodology used commercially. And the solve function was not arbitrary: it works out the equivalent cost of the power as a c/kWh value.

You haven’t shown where the calculation is wrong. Several of the commenters described where I under-estimated cost items. In reality costs do tend to be under-estimated and financial estimates tend to be worse than initially thought.

One day of battery (32 kWh) covers the 18 hours when the panels are not producing. At last count 18 hours is 75% of 24 hours. I don’t think that counts as excessive, especially when after only a few years you would lose that 25% buffer. Physically it isn’t big, less than 1 m x 1 m x 1 m weighing about a tonne.

I’ve spec’d a Japanese made corolla

Unfortunate analogy…I’ve owned two Corollas in my life. Both were lemons. My current car is over 20 years old, is problem free and wonderful. Its not a Toyota.

79. egg_

If you read the gen spec, egg, you will that it is rated at 61 dba at normal load, and that cancde operated up to 10 pm.

That’s 61 dB(A) at 7 metres (LWA 90dB+) – will you seek Council approval or install illegally?
Is this to be a valid proposition to the-man-in-street or a hare-brained Greenie?

80. egg_

Also, the Gen-set spec assumes a load of 3kW (note 2.)

81. egg_

Warranty Period:
The Limited Warranty start date is the date of sale of
Product by Cummins Power Generation®. Warranty
coverage for this product shall be five (5) years or
two thousand (2,000) hours from the date of
commissioning whichever occurs first; provided,
however, warranty coverage for Product used in off
grid applications shall be one (1) year or one
thousand (1,000) hours
from the date of
commissioning, whichever occurs first

82. Demosthenes

I don’t know why you’re bothering to debate the numbers, BilB. Bruce is right, and quibbling about the details doesn’t change the basic truth of the post’s overall message. The average household going off-grid does not make sense… yet. Panels and battery prices are only heading in one direction, so it won’t be long now. UBS thinks Sydney suburbanites will be seriously considering it before the decade is out. They’re probably spruiking for their business interests, but nevertheless, a strikingly close date.

83. jumpnmcar

The average household going off-grid does not make sense… yet.

But when it does I’ll be livin on a boat 🙂
( My memory’s not %100 but I think BilB has similar plans ? or maybe that was someone else )

84. Bruce of Newcastle

Demosthenes – The average wholesale price for grid electricity in NSW, where I live, has been a little over 3 c/kWh this week. Which is almost exactly what it was in the week before the carbon tax came in.

It will take an infinity of time to compete with that, because of the economies of scale that large centralized generation has. In standard scaling formula double the capacity only has 1.5 times the cost (y=x^0.6).

Another problem is that batteries are produced from relatively scarce metals. Large take up would increase their price. You can’t miniaturize a battery, its capacity is fixed by chemistry.

85. JC

You should be jailed for peddled fraudulent bullshit, Bilby Numbuts….. And your head stuck in a vice for a couple of weeks. You delusional slob.

86. JC

But when it does I’ll be livin on a boat 🙂
( My memory’s not %100 but I think BilB has similar plans ? or maybe that was someone else )

Put him of one of those ref boats and tow the bastard put to sea with the threat that if he tries to turn the boat South he will be shot on sight.

87. egg_

In order to make sure the battery pack would last ten years and 150,000 miles (240,000 km) expected for the battery warranty, the Volt team decided to use only half of the 16 kW·h capacity to reduce the rate of capacity degradation, limiting the state of charge (SOC) up to 80% of capacity and never depleting the battery below 30%.[38][39] General Motors also was expecting the battery could withstand 5,000 full discharges without losing more than 10% of its charge capacity.

Typical SLA deep cycle assumes 1,000 cycles to 50% capacity IIRC.

88. BilB

I didn’t say your calc was wrong, BoN, for the assumptions you’ve made, other than the term perhaps. It is the system spec that does not make good sense, to me.

You proposal assumes most of the power will be used during nonsolar periods for that battery capacity. In the solar way of doing things as much as possible is done during the day. That is to me where your approach is wrong. Water heating, clothes washing, pool pumping, air conditioning, baking (roasts), etc.

89. egg_

After all this time its pretty amazing to hear GM’s final decision on the Chevrolet Volt’s battery warranty. Eight years or 100,000 miles.

According to Nissan North American Director of EVs, Mark Perry, Nissan has “no comments yet,” on the air-cooled LEAF battery warranty. “We will release a bit closer to launch,” he added. Nissan has surveyed its \$99 reserve holders about their battery warranty expectations, and may be aiming for 5 years/60,000 miles.

90. BilB

You are right, Jumpy, my plan is to retire to a yacht. That is the ultimate off grid solution.

91. Leigh Lowe

You are right, Jumpy, my plan is to retire to a yacht. That is the ultimate off grid solution.

92. Bruce of Newcastle

In the solar way of doing things as much as possible is done during the day. That is to me where your approach is wrong.

Almost immaterial. The simple calc uses a daily quota of 32 kWh balanced production and consumption. All the battery does is time-shift the consumption. No one would change their habits just to save a couple grand off a battery. You might change your habits for ideological reasons, but most of the population wouldn’t. They have to go to work 9-5.

And remember I have not factored sustaining capital for battery module replacement. The loss of capacity of the battery is significant, as I addressed above. Perhaps half to two thirds by ten years. You need some extra capacity at the start to offset that. The panels may be down by 10-20% also.

Using less power and buying a smaller system doesn’t help, because then you are scaling down not up, so the equivalent power price would come out even higher.

93. Demosthenes

The average wholesale price for grid electricity

I thought we were talking household installations here.

It will take an infinity of time to compete with that

So far, those who disagree with you include Deutsche Bank, Citigroup, UBS, Alliance Bernstein, Morgans, Eclareon, and Rocky Mountain Power. That took me to halfway down the first page of results.

94. BilB
#1458744, posted on September 25, 2014 at 11:57 am
I see you’re the rostered duty idiot today, “dotty”.

Hi guys, I still can’t do an NPV calculation and I like to lie about my financial position.

You poor thing.

95. Bruce of Newcastle

Demosthenes – The average retail price in the US is less that 10c/kWh. That includes quite a lot of renewable energy, since their wind sector is large and has a significant effect on retail prices.

If you removed RET the retail price here would be similar. I can’t see small scale solar competing with that on a stand alone off-grid basis, which is the correct comparison. The scale issue just kills you. That is why people don’t make their own socks – big centralized factories can always do it cheaper.

Appeal to authority doesn’t work. All those companies have very good reasons to toe political lines, since the alternative can be rather painful.

96. egg_

GSBA Service Manual:

Yearly or every 150 hours:
– Change engine oil and oil filter
– Adjust engine valve clearance (lash)
– Replace engine air filter

97. Demosthenes

That is why people don’t make their own socks – big centralized factories can always do it cheaper.

The comparison you made was between what a household would pay for grid electricity versus what they would pay using a panel + battery + generator setup. I agreed with your gist, but pointed out the relevant fact – this is true only for the moment. Now you mention economies of scale, but the growth of the industry is the main reason the capital cost of solar is falling, hence one of the reasons why I made my comment. So yes, thanks for the reminder of why the cost curve is what it is, but I don’t see what argument of yours it supports.

Appeal to authority doesn’t work.

I never make appeals to authority. I mention the analyses of investment banks because they provide evidence that supports their predictions (and because their predictions are quite similar) so you know where I’m coming from when I respond to your vague assertions about the impossibility of grid parity.

All those companies have very good reasons to toe political lines, since the alternative can be rather painful.

I’m sure major corporations keep a very careful eye on the political winds, and I suspect they have hopes about the financial services they can provide the renewables sector, etc. I never forget they are self-interested entities. However your conspiracist claims are – as usual – backed by nothing at all, and leaves me wondering how convenient it must be to be like you and be able to dismiss any and all evidence that doesn’t accord with my ideology as politically tainted. It would make things much easier, because I would never have to think about the possibility that I might be wrong.

Is that why you do it? Does the niggle at the back of your mind grow into a worry that metastasises into a fear that you shout down with “Shut up! It must be a conspiracy!”?

98. Bruce of Newcastle

Now you mention economies of scale, but the growth of the industry is the main reason the capital cost of solar is falling, hence one of the reasons why I made my comment.

Demosthenes – You neglected to mention that solar is a distributed low intensity technology. Coal and nuclear are centralized intensive technologies. If you use the same scale up ratio equation out of Perry and elsewhere, the factor is going to be about 0.6 (see from p22 here). For solar rooftop PV and batteries the exponent is something like 0.9 because panels and batteries are modular – so you can only scale up by adding more panels and battery modules. Coal plants just build a bigger furnace – twice the dimensions give something like 8 times the capacity. That is the economy of scale, which solar can’t do as well.

So short a breakthrough like printable organic panels, you won’t see solar PV ever approaching coal because of the simple geometry and diffuseness of the resource. And even printed panels still have to have a surface to put them on – a big surface. Rooftops are free space, but once you run out of them you have to charge yourself for the land too.

I won’t address the rest of your comment since I don’t credit conspiracy theories. I do work for very large companies and have done so for decades.

99. Demosthenes

You neglected to mention that solar is a distributed low intensity technology.

I’m not suggesting 4kW installations can replace the grid and grid-scale sources in their entirety across the whole country. No-one does. This is a thread about the calculation for a single household, despite your attempts to move the goalposts.

All I’m saying is that the prices for renewables are on a long-term downward trend, and the prices for coal and oil are on a long-term upward trend (which will be periodically alleviated and even reversed by new finds and new technology, but only temporarily). So does going off-grid make sense? No. Not yet. For many people it never will, because the grid itself will adapt as old business models go under.

100. Demosthenes

I won’t address the rest of your comment since I don’t credit conspiracy theories.

Yet you trot them out regularly. See upthread for the latest. I note you don’t want to address the actual arguments of the investment bankers (eg the estimate of an annual fall in capital costs of 5%), instead retreating to “No, they’re lying.” This is what you do with climate scientists en masse, like Louis Hissink, who also does it with doctors and geologists and particle physicists. Conspiracies everywhere!

101. Renewables would be great if there was no subsidies and we had more storage options.

102. Bruce of Newcastle

I note you don’t want to address the actual arguments of the investment bankers (eg the estimate of an annual fall in capital costs of 5%), instead retreating to “No, they’re lying.”

Never said that. I doubted them and pointed out their bias. Then I explained in clear terms why, on an engineering basis, it is supremely unlikely roof top solar will ever be able to compete with centralised power generation.

Having said that I quite like roof top solar because it reasonably matches peak consumption. That makes sense, since at those times the prices tend to be higher. But beyond a certain modest amount, which we’ve now pretty much reached, it no longer makes sense, which is why the power companies are unilaterally reducing FITs they are willing to pay. Like this guy who got a rude shock… when they reduced what they would pay for his solar energy to 5.1 c/kWh. That tells me the market is fairly saturated and any more causes them more trouble than its worth…no matter what the capital cost is. The capital cost could be zero and they probably still wouldn’t buy it if they had the choice.

103. Bruce of Newcastle

Try plugging 5.1c/kWh into that calculation I did and see what the NPV is. I’ll help you out: zeroing the battery, generator, installation, diesel, maintenance, and dropping insurance to \$100 a year gives an NPV of -\$4,888 on an investment of \$6,557.

Now all I have to do is goalseek the capital cost that gives zero NPV. Answer \$2,450. Keep in mind the capital cost already includes federal subsidies. So for 5.1c/kWh the panels have to drop by over 60% and keep the subsidy. Hard ask to achieve. And as I said the generators are currently selling their power for 3.4 c/kWh.

That requires a panel capital cost of just \$1400 to break even.

104. Bruce of Newcastle

And that still only gives you electricity for 6 or 7 hours a day. A coal fired power station gives you power around the clock for that price.

105. BilB

Its time, BoN, you updated your spreadsheet to reflect the true life of a system based on 35 year life of panels and 15 year life of batteries.

http://www.solarpowerworldonline.com/2012/11/batteries-show-15-year-cycle-life-in-solar/

Then you need to evaluate for a system that has paid out its capital cost and continued to earn for its owner. You also need, due to the long life of the earning asset, to take inflation into account. Your calc is only valid for a pooly designed system made with the worst of materials.

Boarding.

106. Bruce of Newcastle

BilB – I gave two links to extremely detailed technical evaluation of battery lifetimes and solar panel loss rates. In ten years batteries are down half to two thirds. Solar panels down 10-20% in that time. Do you need the links a third time? Or can you find them yourself upthread?

Typically you size a piece of equipment to what you need throughout its lifetime. I did not do that because it is a super simple analysis anyone can do. If you lose those amounts of capacity you will make the NPV worse by respectively having less payable power and replacing dead or sick modules.

On my experience with electrochemistry – and I am an expert, having worked in the field since 1987 – a 15 year life cycle for batteries is super optimistic. I would not be doing my calcs on such. A 2,250 cycle test under optimum conditions is not a 15 year real life test. All you need to do is look at your phone battery life to know the difference between the theoretical and actual performance.

I would hope further development will get improved panel life, but batteries are tougher. Chemistry is more prone to random issues than physics. I’ve had plenty of shorted electrodes due to dendrites, slight misalignments, impurity issues and patchy corrosion of the anodes to bet on 15 years without maintenance. A cellhouse electrode at best does 4 years, and car batteries after 100 years of development effort still die in 5-8.

107. Demosthenes

I did. I pointed out that you were moving the goalposts, since replacing “centralised power generation” with rooftop solar was not what was being discussed. Now you’re doubling down on this falsehood because the facts don’t support your position.

So for 5.1c/kWh the panels have to drop by over 60% and keep the subsidy. Hard ask to achieve.

So you say. Others disagree. Please indicate why they are wrong, other than your fantasies about their biases.

The capital cost could be zero and they probably still wouldn’t buy it if they had the choice.

Yeah, that sounds likely! LOL

108. Tel

Don’t forget that 90 days x 8 hours is an awful lot of noise to be abated. Midnight? Yikes what about Sydney curfews? And no doubt other locales will have similar limits – strewth, you can’t even run your lawn-mower on a Sunday morning…what chance a diesel generator?

Oh you would never get even close to the Bruce Plan in Sydney suburbs. Big Government would come down on your head like a tonne of recycled mercury. I don’t think that’s a fair criticism though, because Bruce isn’t seriously suggesting any of this is real.

109. Bruce of Newcastle

I pointed out that you were moving the goalposts, since replacing “centralised power generation” with rooftop solar was not what was being discussed.

Yes it was. If you read the post it was about whether rooftop solar off-grid is viable compared with buying off the grid. It isn’t. In the discussion you raised price reductions of solar panels, so I noted that it is unlikely they will be viable on or off grid, and I cited the unfortunate experience of the guy here in Newcastle. In short, solar absent of subsidies is not viable, and cannot be viable except for a small proportion of the mix corresponding to peak daily load, which we already have in place. That is why FITs have gone down so dramatically – they don’t need and increasingly can’t use any more.

So you say. Others disagree. Please indicate why they are wrong

Demosthenes – You quoted some names of companies. Fine. You didn’t link to any particular studies by any particular companies. I need to have the technical detail similar to what I give here to be able to work out the veracity of your claim. Airily waving your arms saying solar will cost will come down is unfalsifiable. Give me a link.

Yeah, that sounds likely! LOL

Lol yourself: Denmark pays Sweden to take excess electricity

With the existing wind capacity, there have already been times in recent years when surpluses have been generated and Denmark has actually paid other countries to take the excess power supply (much like the situation in West Texas, where surpluses of wind occasionally result in negative pricing for short periods). If significant changes to the electric system are not made, it is possible that supply might eclipse demand for up to 1000 hours per year by 2020 (out of the 8760 hours in a year), according to Jen Moller Birkebaek, a vice president at Energinet.dk, quoted in the NY Times.

Solar is intermittent like wind. It is disruptive if there is a lot of it. If there is too much at those times the price is negative.

110. Bruce of Newcastle

Heh. Not long after I posted the above about saturation of the grid with solar PV energy, I read this:

But even if we ignore cost, there is still a maximum practical limit to solar power based on the realities of grid management.

– You can’t build more PV solar than the rest of the grid can ramp up/down to accept. The necessary grid storage for large-scale solar power is a “maybe someday” technology, not something viable today. Calls for 50% of power to come from solar in our lifetimes are a fantasy, and we need to be realistic about that.

– You can’t force utilities to buy unneeded power just because it’s renewable. The energy and materials to build the excess capacity just goes to waste. That is the opposite of green.

We have to learn those lessons. We can’t sweep this failure under the rug.

That gets a +1 from me.

111. Snoopy

BilB
#1458437, posted on September 25, 2014 at 4:56 am
BilB is right here but extremely busy.
………..
I have not done the npv calculation, I do that on the plane Friday.

Waiting

112. egg_

Its time, BoN, you updated your spreadsheet to reflect the true life of a system based on 35 year life of panels and 15 year life of batteries.

http://www.solarpowerworldonline.com/2012/11/batteries-show-15-year-cycle-life-in-solar/

So now in addition to a high-maintenace gas Gen-set with only 1 year off-grid Warranty, you’ve added high-maintenance flooded lead-acid batteries (FLA) and are quoting a simulation of a 15-year life span – good luck!

In reality, Distributors of FLAs are claiming a max shelf life of same of 10 years…

113. egg_

Bilb:

As you seem to state to have some real world experience in the industry – disclaimer:
(Mentioned prior) over three decades Essential Services experience including No-break power supplies & OEM Tier III support (including National training) for Gen-sets.

114. BilB

BON, you are moving the goal posts to suit the result you want. You use wost case hardware to make an argument for a short npv calc, then you start talking about electricity production costs which no one can access, now you are talking about off grid in terms causing disruption through power in feed.

Off grid means not connected.

This is not the methodology of the professional you claim, repeatedly, to be.

Snoopy,

Quite so, still not done. I slept the first leg, and did design work the second. Roaming is still a disappointment. The hotel here has a good connection, hence the comment.

However, the more research I do on npv verifies my original caculation for the system design that I use which proves a break even at the end of the complete capital cost pay out five year period based on equivalent level offset costs (ie the maximum cost is equal to the bills that the user was paying to his grid energy provider), with all energy prodution from that point being clear profit.

My experiences with large battery packs relate to electric forklifts, and there the total life far exceeds the 10, and even 15 year figure. There is a definite storage dropoff over time and I bridged out several failed cells to keep one unit operational, but it was not the battery that caused me to dispose of that unit in the end, it was mechanical failures.

As I said, the system design I base my calculations on is costed using Jaoanese made quality cells. I put up a link to Siemens PV cells where their testing and experiences prove a 30 to 40 year useful life, but that is an inconvenient truth to the BoN calculation which assumes a maximum useful life of 10 years for a poorly designed and made system.

7 am here.

115. BON, you are moving the goal posts to suit the result you want.

Wrong – he made an analysis and you are squirming.

As I said, the system design I base my calculations on is costed using Jaoanese made quality cells. I put up a link to Siemens PV cells where their testing and experiences prove a 30 to 40 year useful life

Utter bullshit. There is no way you are going to break even with all of the best gear that comes at a premium. A battery does not have anywhere near 100% capacitance now if it was made in 1974.

116. Bruce of Newcastle

BON, you are moving the goal posts to suit the result you want. You use wost case hardware to make an argument for a short npv calc, then you start talking about electricity production costs which no one can access, now you are talking about off grid in terms causing disruption through power in feed. Off grid means not connected.

BilB – I think that was jetlag writing your comment. The discussion while you were in the air moved from off-grid to on grid in the context of reducing solar panel prices.

As for panel life, you obviously didn’t look at the analysis of the (US) National Renewable Energy Laboratory, which I linked twice, and which finds an average degradation rate of 0.8%/year for Si solar cells. I suspect cheaper Chinese panels will be higher than that – and as you know the higher capital cost of good panels means a worse NPV.

Anyhow, the ten years is optimistic re the battery life and probably the generator life too. A more sophisticated NPV analysis would include replacement capital each 8-10 years for the battery pack. Given it and the generator are almost 2/3rds of the total capital cost, together with panel degradation, you aren’t going to get much of an improvement in NPV going out in years.

117. Snoopy

We’ll assume that solar can do the job for 275 days a year, so the diesel generator will be running 8 hrs a day at 50% capacity the other 90 days a year, with the battery doing the load levelling. So that is 90 x 8 = 720 L of diesel per year.

Bruce, you’ve glossed over one of the joys of running a diesel generator, here. Changing the oil and washing or replacing the filter every 100 hours. Seven times a year by your modelling.

118. egg_

My experiences with large battery packs relate to electric forklifts, and there the total life far exceeds the 10, and even 15 year figure

I’d like to see some evidence, thanks.

Your intarwebs are powerred by puppies like these (baby, half form factor) – their bigger brothers may last over a decade, but are bascically a float operation, not deep-cycle.

119. egg_

Hyster electric foklifts:

Each charge takes a cycle out of a battery. Most new batteries start with 1500 cycles prior to the end of its usable battery life.
A battery charged once each working day (300 per year) will last 5 years (1500 cycles). Opportunity charging (mentioned below) can reduce the life by over half.

120. egg_

the joys of running a diesel generator… Changing the oil and washing or replacing the filter every 100 hours???

Cat C15 Gen-set Maintenance Schedule: (PDF)
Every 500 Service Hours or 1 Year:
Engine Oil and Filter – Change

121. Snoopy

Egg, the CAT C15 line of generators produce a minimum output of 320KW. Not quite what we’re discussing here. Even then, according to your link for emergency/standby use the oil/filter change interval is 200 hrs.

122. egg_

Hehe, I knew a 15-litre set would suck ’em in…

Yanmar, with the rep of one of the world’s best small marine diesel engines:
Yanmar TNE68-88/4TNE94-106T:
Replace the lube oil …. every 200 hrs or 3 months
Replace lube oil filter element …. every 400 hrs or 6 months

123. egg_

Even then, according to your link for emergency/standby use the oil/filter change interval is 200 hrs.

This is considered a Prime Power application, hence the above intervals; the trade off over emergency use is that the (maximum) output is derated.

124. Snoopy

Hehe, I knew a 15-litre set would suck ‘em in…

Egg, not so fast. Your examples are 4 cylinder and liquid cooled. The 4TNE94 produces 29KW and the 4TNE88 produces over 36 KW from 3.3L.

These engines are three or four times larger than that required to run a 6-7 Kw genset. Diesels run best under load. Run on a light load the cylinder bore is glazed resulting in excessive oil use.

I don’t know what these cost but you’re not going to find a genset powered with these for any like the \$4350 for the air-cooled unit proposed by Bruce.

I spent 15 years living off grid. Anyone who chooses to do so is an idiot.

125. egg_

Run on a light load the cylinder bore is glazed* resulting in excessive oil use.

If you have such industry knowledge, why the disingenuousness? re Prime Power?
I’ll dig up something similar to the size you desire (have a stash of industry PDFs – largely Deutz – the air cooled variety would be ideal for this app and yes you can’t buy a quality diesel cheaply), to quiet pedantry, if nothing else.

* 70% loading is optimal – particularly in Prime Power Diesel applications.

126. Let’s be frank – the numbers don’t add up and going off grid would if there was no subsidies and connections on or off grid weren’t highly regulated.

However – solar stuff does have some pretty advanced research – batteries as well. Check out Science Daily for a heap of cutting edge research. I found a tonne of stuff there.

I know this sounds like an ad, but how far the panels and batteries have come is amazing – and yes I know they are in a lab and would be hideously expensive even if they got scale.

127. Snoopy

If you have such industry knowledge

I don’t claim industry knowledge. What I know I learned through direct experience and the experience of others.

128. egg_

Sticking with the Yanmar theme:

A 7 kW Yanmar Marine Genset (link stuck in moderation) utilises a 3TNE68 (3x pots of 68mm bore is the normal industry nomenclature).

Of the same family.
I would wager that for Prime Power use, the lube oil change interval will be doubled to match that of the lube oil filter element, i.e. every 400 hrs or 6 months.

129. Snoopy

Good. Go and buy one for \$4.3k.

One last thing. Are you sure that the service intervals recommended by engine manufacturers are designed to maximise engine life? That’s a rhetorical question. I’m not interested in your answer.

130. egg_

Are you sure that the service intervals recommended by engine manufacturers are designed to maximise engine life?

No, income from the aftermarket segment (mine) – if they were that interested, they’d up the coolant change frequency – oil changes are simply a lazy earner.
However, some manufacturers (Hyundai? – the Cat’s manufacturer of choice?) are being criticised for prolonged service intervals – wouldn’t have anything to with fixed price servicing – hmmm…?

131. egg_

Do infrequent oil changes kill the engine?

While theoretically you can drive up to 40,000 kilometres without the oil being changed, in real life this period will hardly reach 20,000 kms.

132. egg_

Bruce, you’ve glossed over one of the joys of running a diesel generator, here. Changing the oil and washing or replacing the filter every 100 hours.

Hmmm…
Straight from the Yanmar L100 engine manual for the chosen Genset?
Note that the engine oil filter change interval is yet again 500hrs/6 months (regardless of engine displacement), and likely the ridiculous 100 hrs/3 months engine oil change interval is for “Standby” use.

133. egg_

and likely the ridiculous 100 hrs/3 months engine oil change interval is for “Standby” use.

Or simply the reportedly high oil consumption of a single cylinder 3,000 rpm machine (2 pole alternator) that requires frequent topping-up, but they’re not admitting it.

I understand that off-the-grid fruitcakes opt for more solar cells/less battery capacity/better Genset, oddly enough (so much for ‘storing’ their sunshine).
If so, I’d plump for something like a Kubota GL6000 (2 cylinder) which may have some resale value at the end of the NPV period, i.e. wouldn’t be (as) shagged…

134. egg_

Go and buy one for \$4.3k.

The Eco-loons seem to shy away from “Yumcha” Gensets, but this knock-off looks pretty darn good:
FP8Y1 8kVA 240V Diesel Generator: \$4,950.00

Even an entry level thingy:
KT6700SE1BRK 6KVA 240V Diesel Generator in Canopy Single Phase: \$1,190.00

135. Oh come on

I have not done the npv calculation, I do that on the plane Friday.

Wayne Kerr.

136. egg_

3.7kW off-grid solar package w Perkins 4cyl* Genset: \$11,799

*IIRC via a recent acquisition of a Japanese small diesel engine OEM every bit as good as Yanmar.

137. egg_

4cyl pictured, but set is actually a 3cyl: 403D-11G (PDF: link in moderation again!) at 1500 rpm (4 pole alternator).

138. egg_

Perkins started importing these 100 series engines from a Japanese company called Ishikawajima Shibaura Machinery, Ltd. nearly twenty years ago. ISM is part of Ishikawajima Harima Industries, one of Japan’s largest industrial companies. Perkins marketed this engine in a marinised version as the Perama M30. They sold the engine to Volvo Penta who marketed it as their MD2030. They also sold the engine to Massey Ferguson, McCormick, Terramite, Textron, Jacobsen, Cushman, Vermeer, Leech Lewis, JCB, Kobelco, and Northern Lights to name just a few. In the US, the engine was distributed through Detroit Diesel – Allison which is closely tied to the MTU conglomerate. By 1996, Perkins had become so successful at marketing these engines to other equipment manufacturers that they formed a joint venture with ISM called Perkins Shibaura Engines, Ltd. and began assembling the engines at the Perkins facility in Peterborough, UK from parts shipped from Japan. In 1997, Perkins was acquired by Caterpillar. With an added boost from Caterpillar, this little engine has become one of the most popular engines in the world. It’s used in turf equipment, tractors, mini-excavators, brush choppers, compressors, welders, pumps, generators, etc. etc. etc. Even Caterpillar uses it in some of their smaller equipment. The “Perkins” name was highlighted on the engine ID plate which is located on a distinctive boss just forward of the injection pump. The 2006 model year’s production of the engine has “Shibaura” highlighted on the ID plate. In 2001, the larger Shibaura 400 series engine was introduced with assembling at Peterborough, UK from parts mostly from Japan, and in June, 2004 assembling of the 400 series engine began at a Caterpillar facility in Griffin, Georgia, USA with production exceeding 100,000 units per year.

139. BilB

OK BoN, Back from Europe, done the spread sheet but not configured to blog format.
Here is an info blob which I will massage later.
Bottom line is the system as I spec’d it breaks even at 8 years after repaying capital cost at 7% interest. I have replaced the generator every 8 years and the battery every 10 years. Panels are guaranteed for 25 years and the battery for 10, so no earlier replacement required. At the 40 year period the system has returned a profit of \$21,000 (this includes a compounded 7% return on invested funds).

The NPV is zero to the 8 year point with an electricity price of 19 cents per unit averaged. At the 8 year point the NPV goes strongly positive.

Opportunity Water Heating for 300 Ltr tank to 65C
Value 3412 btu/kwhr
1.046kw 1l/4S= 4.07 18
Actual Heat Units 26.25

Off Peak Price: 0.13 cents Backup Power: 2kw water cooled Natural Gas
Basic Unit Price: 0.25 cents 6.5 kwhrs per low solar day Annual Gas \$: 350
Opportunity Cost: 0.07 %/100 Annual units \$val: 185
Nett Cost: 165

Nett Revenue Capital Interest Paid Units \$ Electricity \$ Water
after Interest Balance On Capital Electricity Generated Heating
0.00 17500.00 1225.00 9281.25 2320.31 938.44
1868.75 15631.25 1094.19 9281.25 2320.31 938.44
1999.56 13631.69 954.22 9281.25 2320.31 938.44
2139.53 11492.16 804.45 9281.25 2320.31 938.44
2289.30 9202.86 644.20 9281.25 2320.31 938.44
2449.55 6753.31 472.73 9281.25 2320.31 938.44
2621.02 4132.29 289.26 9281.25 2320.31 938.44
2804.49 1327.80 92.95 9281.25 2320.31 938.44

3000.80 -673.01 -47.11 9281.25 2320.31 938.44
3140.86 586.13 41.03 9281.25 2320.31 938.44
3052.72 -2466.59 -172.66 9281.25 2320.31 938.44
3266.41 -5733.00 -401.31 9281.25 2320.31 938.44
3495.06 -9228.06 -645.96 9281.25 2320.31 938.44
3739.71 -12967.77 -907.74 9281.25 2320.31 938.44
4001.49 -16969.27 -1187.85 9281.25 2320.31 938.44
4281.60 -20250.86 -1417.56 9281.25 2320.31 938.44
4511.31 -24762.18 -1733.35 9281.25 2320.31 938.44
4827.10 -29589.28 -2071.25 9281.25 2320.31 938.44
5165.00 -34754.28 -2432.80 9281.25 2320.31 938.44
5526.55 -35880.83 -2511.66 9281.25 2320.31 938.44
5605.41 -41486.23 -2904.04 9281.25 2320.31 938.44
5997.79 -47484.02 -3323.88 9281.25 2320.31 938.44
6417.63 -53901.65 -3773.12 9281.25 2320.31 938.44
6866.87 -59768.52 -4183.80 9281.25 2320.31 938.44
7277.55 -67046.06 -4693.22 9281.25 2320.31 938.44
7786.97 -74833.04 -5238.31 9281.25 2320.31 938.44
8332.06 -83165.10 -5821.56 9281.25 2320.31 938.44
8915.31 -92080.41 -6445.63 9281.25 2320.31 938.44
9539.38 -101619.79 -7113.39 9281.25 2320.31 938.44
10207.14 -107426.92 -7519.88 9281.25 2320.31 938.44
10613.63 -118040.56 -8262.84 9281.25 2320.31 938.44
11356.59 -128397.15 -8987.80 9281.25 2320.31 938.44
12081.55 -140478.70 -9833.51 9281.25 2320.31 938.44
12927.26 -153405.95 -10738.42 9281.25 2320.31 938.44
13832.17 -167238.12 -11706.67 9281.25 2320.31 938.44
14800.42 -182038.54 -12742.70 9281.25 2320.31 938.44
15836.45 -197874.99 -13851.25 9281.25 2320.31 938.44
16945.00 -214819.99 -15037.40 9281.25 2320.31 938.44
18131.15 -232951.14 -16306.58 9281.25 2320.31 938.44
19400.33 -252351.47 -17664.60 9281.25 2320.31 938.44
20758.35 -273109.82 -19117.69 9281.25 2320.31 938.44

140. Bruce of Newcastle

BilB – I’ve had a quick look, restricting to just the first 8 years.

Firstly you are including the hot water system. That should be split out, since the subject of the NPV analysis is electricity (see below for more reasoning why).

Second, I do not see the cost of the generator fuel (I took the gas to be for backup hot water), or the insurance component assignable to your system. If you aren’t insured that is fine, but if your house or contents insurance covers your system there would be an attributable amount.

Thirdly I see no maintenance component. Perhaps it is zero maintenance, although see the comments upthread on generator maintenance.

Fourthly the cost of the solar panels and battery and generator at about \$15000 without the solar hot water system is pretty low. Certainly your battery must be a lot smaller. That is your choice, but it would tend to translate to higher generator usage.

The latter is a minor point since the aim of the original post is to show how people can do a quick financial analysis. What you’ve done is fine, but I am concerned about the generator costs and insurance. Both would affect the NPV calc a lot: if you use \$1,080/yr for diesel as in the post example that increases the effective power cost by 12c/kWh on your numbers (with the solar hot water taken out).

As for the solar hot water system – they have excellent economics. That is well known (I helped my dad put one into our house in 1972…long before CAGW was ever heard of). It is sensible to put one in if you are going off grid, but it is erroneous to book its economic benefits towards the electricity system since you could just put the SHWS in and forget about the panels, generator and battery. Therefore the analysis you should be doing is for the latter only.

My quick check still came out near 40c/kWh for your setup excluding the hot water system, if the diesel was included. 38.7018606c/kWh to be exact on a capex of \$15k, opex of \$1,080/yr and your 9281.25 kWh/yr. That gives NPV zero over 8 years.

141. BilB

Absolutely not, BoN. We are dealing with energy collectors. The thermal collector is an integral part of the PV/thermal panels. Hot water in most Australian houses consumes electricity. This system delivers energy in the form that households need. The other features of these panels is that they do not overheat as other panels do. This both improves their electrical efficiency, and extends the life of the pv circuitry. I made it clear in every comment that these are the oanels that my system is designed around.

The generator fuel is in there. Remember that the generator output offsets electricity that would otherwise come from the grid, so it is the total fuel minus the offset electricity value. Remember also that solar panels do still produce some electricity on low solar days. I took thatinto the calculation as well. I also took into account the thermal energy from the generator which is the hot water backup, even though little of that is required.

The generator I used is a 2.2 kva set which I ran for 3 hours per low solar day on gas. You are right in that I did not include maintenance as I opted to replace the whole set every 2000 running hours instead.

The modules I have based this on are an integrated solar pv/thermal micro inverter and self install system. Installation takes just a few hours for both the electrical and hot water parts of the system. Your calculation conclusion is incorrect, but I do understand your need to save face here.

142. Bruce of Newcastle

BilB – The economic case is to

(i) install a solar hot water system
(ii) install a solar PV system with battery and generator or
(iii) install both
(iv) install neither

Do the same NPV analysis for each. The analysis says (i) makes sense. So you would do that one and not do (ii) or (iii) which are economically inferior.

Its like buying a horse and cart and a Hilux. You can financially justify both for your business together, using your argument, or you can be sensible and just buy the Hilux.

The generator I used is a 2.2 kva set which I ran for 3 hours per low solar day on gas.

On the basis of this site (which is in the original post) your generator is consuming roughly \$400/yr of fuel (as diesel) excluding hot water support. Gas is not necessarily cheaper than diesel. Or it won’t be soon if you live anywhere east coast Oz.

I think you have severely undersized your battery and your generator. That is a mistake made in industry financial calcs all the time. It is done to do exactly what you are doing, which is to justify the unjustifiable. The result is a failed project.

I cannot save you from fooling yourself BilB. I can only show you how to not fool yourself. That is what financial analysis is for. It is not for self justification, it is for checking which case makes sense if any.

As I said, the best economic option is to put in a solar hot water system and forget the off-grid electricity system. That makes the most sense.

You haven’t mentioned insurance. Industry would treat this item by including the premiums or they would do a risked NPV which includes the case of your house burning down (or etc) using actuarial probabilities thereby not giving the expected return on investment. It is not valid to do neither.

Installation takes just a few hours for both the electrical and hot water parts of the system.

You would hate to know what hourly rate I charge my customers. I did not mention personal time in any of the analysis, but if you tried to quantify that it would blow your case away. Doesn’t take many hours of dusting panels or checking battery levels to chew up lots of theoretical cost. Which in industry would be actual cost. However your time is your own to expend in your own way.

143. Demosthenes

While Bruce casts about desperately trying to defend his pronouncement of the impossibility of grid parity, technological progress somehow inexplicably continues, causing the IEA to join everyone else who has bothered to do the full calculations and find that:

all solar technologies will fall dramatically in coming decades, with solar PV falling to as low as 4c/kWh, utility-scale solar to around the same level, and solar thermal with storage will fall to as low as 6.4c/kWh.

As I’ve said before, all that matters is the price trend.

144. Bruce of Newcastle

Why wait to 2050 for 4 c/kWh when you can have it today already:

6/10/2014
NSW 2.818 c/kWh
Qld 1.675 c/kWh
SA 2.249 c/kWh
Tas 2.812 c/kWh
Vic 2.599 c/kWh

I’m not bothering to mention the US-Oz exchange rate either.

I laughed aloud when Parkinson wrote “highly conservative International Energy Agency”. The IEA has a wide green streak which causes them to spout out the most ridiculous green crap. The only thing which keeps them from going completely into fluffy unicorn land is that they also serve the established industry which is not quite so silly as they are.

As I have been saying also that 4 c/kWh is for grid linked solar PV. That forces vast costs onto the grid operators, which only can be achieved by twisting their arms with legislation. Therefore the real cost is much higher.

As for solar thermal of the sort described, that technology is currently severely on the nose for its propensity to produce crispy birdies faster than you can say Kentucky fried chicken…if you have been following the news. The Ivanah plant guys rather charmingly came up with the term “streamers” because of the smoke trail the poor creatures produce.

145. Bruce of Newcastle

Link for the AEMO price tables here.

146. Tel

Bruce, I regularly try to explain around here just how massive the middle-man markup is in electricity and no one believes me.

There’s a big difference between electricity at 5c per kWh at the generator with a monopoly “poles and wires” company to deal with, and 5c per kWh at your house with no middle man monopoly. For 2103-2014 the year average NSW price at the generator was 5.226c per kWh. The price I paid was 25c. I also had to pay a per day connection fee on top of that. People just don’t realize how badly they are getting ripped off.