3kW Grid Tied Solar PV: Watts and Warts.

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2476 posts

Uber Geek

Lifetime subscriber

#1248134 27-Feb-2015 23:26

Porboynz: ...

What a business they run, they buy for $0.07 per kWh and sell for $0.28 per kWh, such efficiency. I never expected the $0.25 per kWh to last but I had expected a more reasonable figure around the $0.18 mark as an encouragement to Renewable Energy and greenhouse gas. Foolish me, corporate profit is the driver ultimately. It does make you think about voting for the Greens, what future do our children have in a world of limited resources?

That doesn't sound right to me. While "corporate profit" is a driver, I don't think that it is the main driver. The rate seems more likely to reflect the costs for power generation methods that you want to substitute for. If I take the figures from the 2009 Ministerial Review then excluding GST the proportion related to generation is 36% which means $0.25 retail translates to $0.078-$0.09 (depending upon GST). So your $0.07 might be "a more reasonable figure" given the small scale of your generation.

36% Energy - the cost of generating electricity
29% Distribution - the cost from lines companies for transporting electricity over local networks between the national grid and your home
14% Retail services - charges relating to providing a high standard of service to customers, including Electricity Authority levies - and margin
8% Transmission - the costs from Transpower, for transporting electricity over the national grid between power stations and local networks
2% Metering - the cost of providing, maintaining and reading electricity meters

I'm not convinced that home solar systems will save significantly more "limited resources" than NZ's national generation systems.

k1wi

484 posts

Ultimate Geek

#1248164 28-Feb-2015 03:42

I wonder if it would be an easier pill to swallow if they were more transparent/explicit about where the difference in rates goes. Actually, they should have simply started off with a more sustainable model from the outset.

Transmission costs through Transpower are really the only sector that distributed gen such as solar truly bypass. It will take a Germany sized uptake for aggregate load centres to be net producers and not consume all the generation locally. However, solar is likely to increase per unit transmission costs if it reduces the average load while doing nothing to the evening winter peak. Local distribution is likely to require reconfiguration/investment in the short term to better handle the increasing reverse-to-design flow.

I'm on the fence about the split between summer and winter rates for a number of reasons. On the one hand, the higher winter rate will offset lower winter production, so income across the year will be more even. On the other hand, they're paying you less for the greater proportion of your annual generation... It could be worse I guess? They could have morning and evening peak buy back rates and noon and night off peak buy back rates*. The noon offpeak (also known as midpeak) would hammer solar generators. It is, after all, why they've rolled out smart meters right?

The greater differential does make batteries more cost effective. Storing a small component of daily production and releasing it during the evening peak would be very positive efficiency for the network.

(See here for example consumption side peak/offpeaks in the US: https://www.pacificpower.net/ya/po/otou/ooh.html)

Porboynz

110 posts

Master Geek

#1248573 28-Feb-2015 18:28

Hammerer:
Porboynz: ...

What a business they run, they buy for $0.07 per kWh and sell for $0.28 per kWh, such efficiency. I never expected the $0.25 per kWh to last but I had expected a more reasonable figure around the $0.18 mark as an encouragement to Renewable Energy and greenhouse gas. Foolish me, corporate profit is the driver ultimately. It does make you think about voting for the Greens, what future do our children have in a world of limited resources?

That doesn't sound right to me. While "corporate profit" is a driver, I don't think that it is the main driver. The rate seems more likely to reflect the costs for power generation methods that you want to substitute for. If I take the figures from the 2009 Ministerial Review then excluding GST the proportion related to generation is 36% which means $0.25 retail translates to $0.078-$0.09 (depending upon GST). So your $0.07 might be "a more reasonable figure" given the small scale of your generation.

36% Energy - the cost of generating electricity
29% Distribution - the cost from lines companies for transporting electricity over local networks between the national grid and your home
14% Retail services - charges relating to providing a high standard of service to customers, including Electricity Authority levies - and margin
8% Transmission - the costs from Transpower, for transporting electricity over the national grid between power stations and local networks
2% Metering - the cost of providing, maintaining and reading electricity meters
I'm not convinced that home solar systems will save significantly more "limited resources" than NZ's national generation systems.

Good points made here, I must not forget that Meridian is a generator and a retailer therefore I am their competition. The spread of solar PV needed to be stopped or at least slowed. I will take some comfort that most electricity generated in NZ is relatively renewable hydro, geothermal and wind. Instant load generation provided by Natural Gas is a lesser evil than coal which is widespread in China, USA and Australia. We only have Huntly and that's largely mothballed. Solar PV does avoid the 8% National Transmission and the meter needs to be there for measuring my imported power use so that's another 2%. What's the daily charge for anyway? I could also argue that the 29% Local Distribution can be avoided for the same reason. The power my modest 3kW PV generates is almost certainly consumed by the 30 or so houses on the phase supplied by the huge transformer at my gate. Perhaps a community solution is in order, anyone for an extension lead over the back fence?

I think a 2kW system still makes sense for my base load, I'll continue to work on moving my power use to daylight hours and finding ways to utilise any surplus.

Porboynz

110 posts

Master Geek

#1248597 28-Feb-2015 18:55

k1wi: I wonder if it would be an easier pill to swallow if they were more transparent/explicit about where the difference in rates goes. Actually, they should have simply started off with a more sustainable model from the outset.

Transmission costs through Transpower are really the only sector that distributed gen such as solar truly bypass. It will take a Germany sized uptake for aggregate load centres to be net producers and not consume all the generation locally. However, solar is likely to increase per unit transmission costs if it reduces the average load while doing nothing to the evening winter peak. Local distribution is likely to require reconfiguration/investment in the short term to better handle the increasing reverse-to-design flow.

I'm on the fence about the split between summer and winter rates for a number of reasons. On the one hand, the higher winter rate will offset lower winter production, so income across the year will be more even. On the other hand, they're paying you less for the greater proportion of your annual generation... It could be worse I guess? They could have morning and evening peak buy back rates and noon and night off peak buy back rates*. The noon offpeak (also known as midpeak) would hammer solar generators. It is, after all, why they've rolled out smart meters right?

The greater differential does make batteries more cost effective. Storing a small component of daily production and releasing it during the evening peak would be very positive efficiency for the network.

The Corporate Spin in the email is amusing but I suppose no amount of sugar will make this pill easy to swallow. Most large corporates have some sort of philanthropic program to assuage their guilt when making huge profits. I do wonder what the real reasoning is for the turnaround, as a Meridian shareholder perhaps I should attend the AGM and ask a direct question. (I think I just answered my own question, its because there are shareholders that the $0.25 per kWh was cancelled, so I must blame myself)

I have identified about 200W of 24 x 7 base load consumed by WiFi AP's, Sky boxes, routers etc that would be relatively easy to power separately with a battery inverter arrangement. Anyone got a source of cheap deep cycle batteries? I'm thinking ex electric fork lifts, data centre UPS batteries, PABX batteries and the like I can get for the scrap cost. (free is good, PM me) It would make an interesting project but the retail cost of batteries would make it prohibitively uneconomic based on my initial quick calculations. I already have a PV Router actively diverting excess electricity into my HWC which will reduce my exports in Autumn and Winter.

Hammerer

2476 posts

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Lifetime subscriber

#1248621 28-Feb-2015 20:39

Porboynz:
Hammerer:
Porboynz: ...

What a business they run, they buy for $0.07 per kWh and sell for $0.28 per kWh, such efficiency. I never expected the $0.25 per kWh to last but I had expected a more reasonable figure around the $0.18 mark as an encouragement to Renewable Energy and greenhouse gas. Foolish me, corporate profit is the driver ultimately. It does make you think about voting for the Greens, what future do our children have in a world of limited resources?

That doesn't sound right to me. While "corporate profit" is a driver, I don't think that it is the main driver. The rate seems more likely to reflect the costs for power generation methods that you want to substitute for. If I take the figures from the 2009 Ministerial Review then excluding GST the proportion related to generation is 36% which means $0.25 retail translates to $0.078-$0.09 (depending upon GST). So your $0.07 might be "a more reasonable figure" given the small scale of your generation.

36% Energy - the cost of generating electricity
29% Distribution - the cost from lines companies for transporting electricity over local networks between the national grid and your home
14% Retail services - charges relating to providing a high standard of service to customers, including Electricity Authority levies - and margin
8% Transmission - the costs from Transpower, for transporting electricity over the national grid between power stations and local networks
2% Metering - the cost of providing, maintaining and reading electricity meters
I'm not convinced that home solar systems will save significantly more "limited resources" than NZ's national generation systems.

Good points made here, I must not forget that Meridian is a generator and a retailer therefore I am their competition. The spread of solar PV needed to be stopped or at least slowed. I will take some comfort that most electricity generated in NZ is relatively renewable hydro, geothermal and wind. Instant load generation provided by Natural Gas is a lesser evil than coal which is widespread in China, USA and Australia. We only have Huntly and that's largely mothballed. Solar PV does avoid the 8% National Transmission and the meter needs to be there for measuring my imported power use so that's another 2%. What's the daily charge for anyway? I could also argue that the 29% Local Distribution can be avoided for the same reason. The power my modest 3kW PV generates is almost certainly consumed by the 30 or so houses on the phase supplied by the huge transformer at my gate. Perhaps a community solution is in order, anyone for an extension lead over the back fence?

I think a 2kW system still makes sense for my base load, I'll continue to work on moving my power use to daylight hours and finding ways to utilise any surplus.

I'm not surprised that people are complaining that their uneconomic systems are no longer being subsidised. It has happened elsewhere. I can remember when the German government scaled back solar subsidies because it was a massive cost to the state without anywhere enough benefit. The difference was costing the state billions of dollars a year.

The real question for me is at what point is your setup profitable. I doubt that it is anywhere near 7 cents. If it was then lower then you'd be happy with what you were getting.

I think a comparison with average national generation prices is more reasonable than expecting to get paid for distribution that you don't use. Most of those costs are fixed and don't go away just because you don't use them. So it's no surprise that businesses don't want to give you a hand up. Commercially, I don't think that small generators have the power to get the electricity companies to add back in the nominal costs of any elements avoided. Economically, I think that it would probably be a bad decision to do so.

A community solution would appropriate the full benefits because each kW produced can save on full retail charges. Likewise, I have solar hot water heating instead of PV because every kW of heating converts to a saving of the retail price - ignoring the pumping cost and insulation losses. Yet even using the full retail price our retrofitted system is not profitable although it would have been if we had installed in a new build avoiding one third of the install costs and getting better insulation from not having so much of the system exposed to the elements.

Hammerer

2476 posts

Uber Geek

Lifetime subscriber

#1248623 28-Feb-2015 20:42

Porboynz:
The Corporate Spin in the email is amusing but I suppose no amount of sugar will make this pill easy to swallow. Most large corporates have some sort of philanthropic program to assuage their guilt when making huge profits. I do wonder what the real reasoning is for the turnaround, as a Meridian shareholder perhaps I should attend the AGM and ask a direct question. (I think I just answered my own question, its because there are shareholders that the $0.25 per kWh was cancelled, so I must blame myself) I have identified about 200W of 24 x 7 base load consumed by WiFi AP's, Sky boxes, routers etc that would be relatively easy to power separately with a battery inverter arrangement. Anyone got a source of cheap deep cycle batteries? I'm thinking ex electric fork lifts, data centre UPS batteries, PABX batteries and the like I can get for the scrap cost. (free is good, PM me) It would make an interesting project but the retail cost of batteries would make it prohibitively uneconomic based on my initial quick calculations. I already have a PV Router actively diverting excess electricity into my HWC which will reduce my exports in Autumn and Winter.

I know an electrician who uses old batteries that have been replaced during regular maintenance. He charges them on the night rate and uses them to save the day rate. I'm not sure if they are economic even at zero cost for the batteries because the losses might be greater than the night rate saving.

Niel

3267 posts

Uber Geek

Trusted

#1248645 28-Feb-2015 22:45

Agree with Hammerer, losses are too great (about 60% efficient plus inverter losses). Also, even deep cycle batteries are not good for deep cycling, they are just better than normal ones. Lead-acid is not intended for cyclic use.

For cyclic use (efficiency and life) you need to go to LiFePO4 which costs a fortune (or one of its derivatives) to get 1000 cycles (say 3-4 years as you don't always fully discharge it). Also cut out power supplies as much as possible and drive direct from batteries and not have around 30% inverter loss and 20% power supply loss.

At the end of the day, the economics is not there especially when you buy gear at retail price in a small country isolated from other countries (i.e. can't just bring gear across the border).

You can never have enough Volvos!

Ouranos

118 posts

Master Geek

#1248674 1-Mar-2015 08:10

Porboynz: I could also argue that the 29% Local Distribution can be avoided for the same reason.

Except that isn't how electricity networks work. Most of the network's cost is in providing the capacity to meet peak demand. Unless you can guarantee that you will not be drawing any energy from the network at peak time, then it is reasonable for the network owner to expect that you pay a share of the network cost. The only way you can guarantee that is to disconnect from the network - then you can avoid paying for it.

Porboynz

110 posts

Master Geek

#1248952 1-Mar-2015 17:53

In the spirit of a good discussion, here is my biased PV owner view: If solar was widespread and power companies truly were disadvantaged and could not invest in peak demand then yes I take your point about peak demand investment. The wiring my neighbours and I have is standard leadin capacity bought and paid for 40 years ago and all my solar PV goes straight to the these neighbours. What about my elderly neighbour whose power bill is under $70/m in summer including the daily line charge. Surely that person is not contributing either and should not be allowed to turn on heaters in winter (actually I suspect she does not turn the heater on as much as she should, but that's different social issue to overcome)

My last power bill was:
448 units imported $126.07
160 units exported -$40.00

32 days daily charges $13.12 (low user daily rates)

So here I am paying $99.12 minus $16.70 prompt payment = $82.49 for a month in the middle of summer, much more than my neighbour. So who is contributing to peak load here? And what's that daily charge for as well?

Rebuttal eagerly awaited.

Ouranos

118 posts

Master Geek

#1249123 2-Mar-2015 07:40

Porboynz: Rebuttal eagerly awaited.

You haven't really made an argument about why you should be able to avoid paying for the network. Nonetheless, I'll rebut anyway.

Peak electricity demand in New Zealand is not in the summer. Instead, peak demand is on winter evenings - at a time when a PV system without batteries is producing no energy. Even a PV system with batteries will often provide minimal reduction in winter peak demand, such as on a cold and stormy winter's day when demand is high and PV production is low.

The cost of building, maintaining, and replacing the network is mostly related to its capacity, not the amount of energy it carries. Capacity is determined by peak demand. This is the reason why network pricing includes a fixed charge (cents/day). If the network prices were fully variable (c/kWh), then users would have a strong incentive to avoid the prices even though reducing demand at non-peak times does not reduce the network costs much. Such pricing would be inefficient.

Therefore, a consumer who has a PV system without batteries should be paying almost their full contribution to the cost of the transmission and distribution networks. Even where a PV system has batteries, it is likely that the consumer will take some energy from the network during at least some of the peak times so they should still make a contribution to the network costs.

As you say, different consumers contribute to network costs in different amounts. Currently, different consumers pay different contributions to network costs through a combination of averaged fixed and variable network pricing. The widespread installation of "smart" meters will enable network pricing to become more targeted to the individual consumer, probably through a mix of fixed and/or more direct (ie. charge for peak demand) prices. I expect targeted pricing to be driven by network companies coming under pressure from consumers installing PV systems (or similar) and avoiding paying for a share of the network that the consumer continues to use.

k1wi

484 posts

Ultimate Geek

#1249161 2-Mar-2015 09:13

The more I think about it, the less blame I find myself placing on your retailer. Not the corporate spin and initial unsustainable pricing model, however. That's still on them.

As long as you're plugged into the grid and importing or exporting power it is hard to argue against paying distribution fees both ways. Even if you're just supplying the houses immediately surrounding you, your retail power company is still using someone else's wires and the LLC is going to want to clip the ticket... At that point it doesn't really matter how far it travels through your LLC's network, in the same way the person right next to the Transpower substation doesn't pay a different rate to the person living on the other side of town. (And as solar continues to grow I can see residential areas becoming net exporters of power, meaning your power could end up going further and further 'back' through the network, so not just next door).

The factor that has not been overtly mentioned yet is regulation, which brings politics and the commerce commission into the mix. I don't know much about the rules around local lines companies and retailers, but I am sure that it adds a degree of inflexibility to the relationship between lines companies and retailers. In fact I think it sets the fee. If solar does reduce distribution costs then ultimately that should be reflected in lower lines company fees (or slower increases), which would then be shared out amongst all users...

Politics itself has a lot of tension, a tension which is probably harder for parties like Labour and the Greens, who have to balance the environment with social justice. That is, creating an incentive for renewables (predominantly people who have the means to afford it) and not putting that burden on those who don't have the means to invest for solar, or ultimately back on solar owners through taxes...

Hammerer

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Uber Geek

Lifetime subscriber

#1249494 2-Mar-2015 14:32

I can't see how it would ever be worthwhile for New Zealand to pay solar generators at prices which are significantly higher than other generation methods. Similar policies in Germany have been a major problem. The lack of a positive impact on peak capacity requirements and the resulting cost and production inefficiency are all reasons why Germany is paying a lot for its power. It has had to reduce its solar subsidies to prevent further rises in prices to consumers. There are a lot of articles about these issues. The following are a taste:
Solar Power in Germany
Sunny Business: Germans Cough Up for Solar Subsidies
Goodnight Sunshine

Oblivian

7296 posts

Uber Geek

ID Verified

#1249518 2-Mar-2015 14:51

There use to be a lump fee payout incentive in Queensland for solar. And a near 1:1 feed rate. People were creaming it in. This was later dropped to similar to here, and now by the looks EXACTLY what you guys are touching on. Ziltch unless you go into Negotiating with the supplier!

http://www.news.com.au/finance/money/queensland-government-to-axe-8cperkwh-solar-feedin-tariff-to-cut-electricity-costs/story-fnagkbpv-1226846455254

Unless you are an off-the-grid type.. seems its a waste of time now. The full solar subdivision in CHCH is looking less and less like its going to help the new investors/owners..

Porboynz

110 posts

Master Geek

#1249706 2-Mar-2015 18:25

Well the posts by Ouranos, Hammerer, Neil and k1wi are reasoned and considered, they all make good logical sense.  Then there is the post from Oblivian (ominous) to seal my fate.

It looks like I should be grateful for the $0.07 per unit Meridian is soon to pay. (and Contact) They were however both complicit in creating an artificial market by offering $0.18 to $0.25 per unit and there will be many an electrician/solar installer that will feel the fallout from this boom and bust industry far harder than those of us with modest PV arrays. Those with large PV arrays will hurt as well, their payback is now extended dramatically.   If the bottom falls out of the market there may be some deals to be had for those like me that are happy with a subsidised hobby.

I'll take it on the chin and be happy with my solar powered home during sunshine hours. I may well export as much as I use in summer but in winter 3kW of PV capability is about right for my 500W base load. Any excess I will divert into heating the HWC as every kWh I can use saves me the full retail rate.  I also see that power prices are creeping up again, time will tell.

Ragnor

8218 posts

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#1249711 2-Mar-2015 18:40

At the end of the day, they shouldn't be obligated to buy your power just as you shouldn't be obligated to buy theirs. Keep waiting for a breakthrough in storage technology so that off grid is cost effective.

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