Would you like a battery with that?

Would you like a battery with that?
What do electric cars, rockets, solar and lithium ion batteries have in common? 
Elon Musk.  He is the founder of Tesla Motors, SpaceX and the major investor in SolarCity.  His recent announcement, or almost an informal chat, of a sleekly designed wall mounted battery pack called Powerwall has talked up a storm not just in social media but also in the mainstream media (e.g. here, here, here & here).
 
Some pundits in the US don’t think it makes much sense there, but Germany and Australia are seen as some of the initial markets where it will.  Even then there are regional differences. 

In NSW on “time of use” (TOU) tariffs, through one major retailer you can pay between 35c-51c/kWh for electricity during peak times (afternoon and evening on weekdays).  In Qld homes we currently have flat rates of around 28c/kWh but more recently TOU tariffs are also an option and during peak times of 4pm-8pm weekdays it’s 34c/kWh. (offpeak rates can be as low as 19c/kWh).The more expensive evening electricity becomes the more viable battery storage becomes.

But does adding batteries to your solar PV system make financial sense for you?  It depends on what you are trying to do and when. 

I want to go offgrid.
Spending $30,000-$50,000, depending on battery size and how power hungry your appliances are, is what is required today. In addition you will still also needing a backup generator to cope with a week or more of cloud and rain.  Needless to say this is not very attractive for most of us.  The roughly $1/day fee solar owners currently pay to remain connected to the grid is probably the cheapest way to continue to have cheap (from solar during the day) and reliable (from the grid for the rest of the time) electricity.

I want to be more self-sufficient and use my solar energy at night.
A battery pack, even a relatively small one, can help store and deliver some of those solar kWh into the evening when most of us use a large portion of electricity in our homes.  This hybrid grid/storage setup might be $10,000-$20,000 at today’s prices again depending on battery size and how power hungry your appliances are.

Does it make sense in Qld?
If you are on the Qld Solar Bonus Scheme (SBS pays 44c/kWh for export until 2028), then storage unfortunately doesn’t make economic sense right now because you are better off sending your surplus electricity to the grid and being paid for it and purchasing regular power back at night. 

But if you are in the 25%, and growing, homes with solar but not on the SBS, or the 75% of homes who haven’t yet got solar at all, it will make financial sense much sooner than 2028.  This is because surplus electricity is only worth 6-8c/kWh selling it to your retailer while electricity you purchase from the grid costs 28c/kWh.  If battery makers can reduce the cost of having a battery system to be less than the difference (i.e. 28c – 8c = 20c) then it will truly be a game changer.