Study reveals unexpected variables affecting returns on rooftop solar

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“More and more people are installing solar and batteries,” says Rob Passey, Senior Research Associate with UNSW’s Centre for Energy and Environmental Markets, apparently stating the obvious. But people prepared to invest in solar, he says, frequently also invest in energy-efficient technologies for their homes, and far from having a multiplier effect this dual strategy can be detrimental to the pockets of consumers.

Research designed by Passey and his colleagues, concluded in March 2017 and published last week in the journal Renewable and Sustainable Energy Reviews investigated the combined effects of Installing a 3kW solar system, and either a 7 kWh battery or a 14 kWh battery, alongside use of energy efficient lighting, refrigeration and air conditioning (versus less efficient versions), as these categories together account for around 65% of typical Australian household energy consumption.

Titled, A semi-empirical financial assessment of combining residential photovoltaics, energy efficiency and battery storage systems, the study gathered hourly household PV generation and electricity-consumption data from 300 Sydney households, to determine the financial outcomes of combining PV, EE (energy-efficient devices) and battery storage.

Says Passey, “We had load profiles of a normal fridge versus a more energy-efficient fridge and a normal aircon vs a more efficient aircon and so on.” The researchers analysed the hourly load profile of each to determine how household financial outcomes were affected, and at what times of day energy-efficient household items influenced outcomes.

One limitation of the research, says Passey, is that since it was carried out, the average capacity of installed rooftop PV has increased, with the most popular size confirmed by the APVI/UNSW Solar Trends Report for Solar Citizens as being between 4.5kW and 6.5 kW.

Use it, or lose the full value of it

For the households sampled, the use of energy-efficient devices reduced household benefit from the PV installation because net-metering arrangements value self-consumption of PV generation more highly than exports to the grid; if household electricity demand is reduced during the day, when the majority of solar generation occurs, and that excess solar electricity is exported to the grid, it can “significantly reduce the financial value of PV”, the paper determined.

Says Passey, “We wanted to find out how you can optimise your whole system, and what different ways there are of running batteries, to minimise negative financial impacts.”

His group’s research indicated that while energy efficiency can reduce PV system revenue, adding a battery system to the mix generally increases PV revenue — by storing solar energy for use within the household. But it concluded that battery storage costs were still too high to justify residential application.

“Batteries for the home average out at about a 10-year payback time,” says Passey, “but battery  warranties are only 10 years. So by the time your warranty expires, you’ve got your investment back, but you haven’t made any money from the battery.”

He acknowledges that battery grants, rebates and loans, such as those introduced in Victoria, Queensland and South Australia, and as proposed by New South Wales Labor, Liberal and Greens parties in the lead-up to the NSW election on March 23, can completely change that outcome, making battery deployment much more valuable to the average household.

The study found, however, that this also depends on a household’s load profile: it confirmed that people who are at home during the day, using electricity, will use more of their daytime solar generation in house and may not need a battery, but for those who work outside the home, and aren’t using much electricity during the day, a battery makes more sense.

How to treat a battery

Batteries have a cycle life — that is, the number of times and depth to which they can be charged and discharged has an impact on their longevity. “The more you cycle a battery — the more you discharge it and recharge it, the shorter the battery life,” says Passey. “What you  want to do is keep them topped up all the time and use them as little as possible,” which seems to go against their reason for being.

But, he says, “What we found in our paper is that because the solar systems we were investigating were undersized, the batteries never seemed to get fully charged. They were always being discharged. So when you added energy efficiency, the battery did get the opportunity to be fully charged, and that energy was used …. but that meant they were cycling more and it decreased their life.”

With a larger solar system, this probably wouldn’t have happened, explains Passey, because the battery would be more likely to be fully charged more of the time, especially when combined with energy-efficient appliances that are used more at night, such as lighting and refrigeration (uses energy at night when opened and closed). In this combination, energy efficiency takes the load off the battery at night and any excess energy produced after the battery is full during the day is sold back into the grid.

Energy-efficient products that deliver their benefits during the day, the paper deduced, are not the greatest investment when combined with solar, because those energy needs can be met by your cheap renewable resource… Except, that is, for off-peak water heating.

Water heating was not part of the scope of Passey’s recent paper, but when interviewed by pv magazine Australia, Passey was at a workshop where attendees had just had confirmed that in many Australian communities, peak demand occurs when off-peak water heaters kicks in.

Households with solar systems would benefit by resetting their hot-water systems to heat during the day, says Passey, thereby becoming what’s known as “solar sponges”. It’s also why solar hot water heaters make so much sense for households that can’t install a full rooftop PV system.

So, it’s not just about good energy efficiency or bad energy efficiency, says Passey, you have to consider the different types of energy-efficient appliances and when they operate and how you use them, and how they help with battery use — some help by not draining the battery much.

“It’s complicated!” he admits.

UNSW’s Centre for Energy and Environmental Markets will continue to investigate what influences outcomes for consumers in the rapidly growing rooftop-PV environment, and one upcoming result looks particularly bright for all consumers.

Research conducted in tandem with Energex is showing that increased rooftop penetration of subsidised solar-plus-battery systems, which then operate in the absence of special feed-in tariffs, have a positive effect in reducing peak demand on the grid, thus reducing network costs and driving down electricity prices for everyone on the grid — not just those who can utilise solar.

It’s all about the load-following capacity of batteries says Passey: “Batteries are meant to follow the household load, meeting all the demand that isn’t being met by direct solar generation. Then whatever demand they can’t meet is drawn from the grid,” says Passey.

He says verification is proceeding and actual cost benefits are yet to be confirmed, but the research indicates that that if solar-system batteries are operating correctly, then they reduce peak demand on the network, which reduces costs for other customers.

This work, says Passey, happily refutes the assertion that solar is “all for the middle class who can afford solar and batteries, and who are being subsidised, but no-one else is winning”. In fact, everyone seems to be winning.