Solar and Batteries for Small Users – why it makes sense

Fundamentally, most of us want to do what’s right for the planet when it comes to our carbon footprint. The challenge comes when there is an imbalance between doing the “right” thing and the personal cost to us.

The question we ask is “how much are you willing to pay”? For most people, if it costs us less today (and is good for the environment) the switch to renewables is easy.

It gets trickier if there is a cost to you, affecting your available cash. Would you be willing to pay $1-$2 more a day now, but save money over 20 years – potentially as much as $20,000 – if it means you are cutting your household emissions by up to 90%?

For people with a small energy consumption requirement, choosing to invest in solar and battery technology often doesn’t appear to make financial sense. All the calculators on the market will tell you that the “ROI” (Return on Investment) will take “too long” because the system will be redundant before you are in front financially.

Here are a couple of reasons we don’t think this is necessarily the case and we explain why below.

The real cost of fossil fuels:

Putting climate change aside, sticking with Synergy for the next 20 years will be expensive. We can’t see a time when Synergy prices will decrease. At today’s rates, a household with an average bill of $400 will spend about $48,000 on electricity over 20 years. For this you receive no backup protection, tangible assets, income potential or reduced carbon footprint.

A household with “unmanaged” solar (ie just panels) may still spend as much as $30,000 on equipment and energy use over 20 years. Panel installation costs vary widely. Even if you cover your roof to maximum panel capacity, without a battery, you still use grid energy every night.

Early adopters of solar have had the benefit of feed-in tariffs as high as .47c/hWh. This has meant they are selling excess energy back to the grid during the day and being paid for it.

Some customers earned high credits with Synergy – offsetting the cost of the grid energy used at night. These tariffs will expire by mid 2021, reverting to 7c/kWh feed in tariff. Given the expense of these to Synergy, it’s impossible to imagine they will ever be repeated.

The cost on the environment still hits your wallet

There is no debate in the scientific world that Climate Change is occurring. The effects are swifter and more profound than have been predicted. Every time you turn a light switch on at night without a solar storage system (or other renewable source of energy) you are burning fossil fuels. This creates demand for a climate harming product and we are already seeing the cost on the environment.

Following the recent catastrophic bushfires, we will also see an economic impact. In Australia it is inevitable that insurance premiums across the country will increase and as the bushfires subside, the real cost to Australia will likely run into the billions.

Economist Shane Oliver has estimated up to 1% of GDP may be wiped out, potentially pushing the nation into negative growth this quarter. This may hit your hip pocket. It’s certainly going to have an impact on the Australian economy which affects all of us.

Life is a long game

Things we value in life cost money and often we are prepared to spend more to get better quality. Housing, clothing, food, education – the same can be said for energy.

Let’s face it, no-one likes paying their energy bills.  But if you are paying for a system that allows you to create and consume up to 90% of your own energy, plus helps the community and the planet, it’s a much happier proposition.

Add into that

ownership of the company,
full back up protection and
technology upgrades
and suddenly it’s an entirely different experience to the dread of opening an electricity bill.

There are many batteries on the market and price varies greatly. The Plico system has been created to make it as affordable as possible with low upfront outlay ($292) and just $36.50/week.  The system is fully serviced and maintained for over 20 years.

The total cost of ownership of a Plico system over 20 years will be less than $20k.  Using the system efficiently will mean you are drawing minimal amounts from the grid.

If you are a “small user” (with bills consistently under $300 every 60 days), investing in a system like Plico will cost you $1-2/day more than you are currently paying to Synergy over the next 10 years (dependent on Synergy pricing and energy use). This excludes any income you receive for selling your excess energy back to the grid. Currently this will earn you .7c/ kWh.

After 10 years, when the capital equipment has been repaid, your ongoing costs for a fully serviced, maintained and upgraded system will reduce to $5-10 / week.  You can see from the chart above that your savings then increase.  This is why you will ultimately save money over 20 years, despite a slightly higher investment in energy in the early days.

You will also:

Have years of a low household carbon footprint.
Add value to your property based on the assets you have installed
Contribute to a better future for generations to come.

Additionally, as part of a Virtual Power Plant (VPP) and owner of the company there is potential to further reduce your energy costs.  This is a unique business model where the company that manages the assets (all the systems on all the households) will act on your behalf to sell energy services.  The “no worse off” clause in the contract means they can only do this if it benefits you.  As part of a not for profit association, any profit generated cannot be paid in dividends. Therefore, it will be used to decrease the energy costs of the members or be directed to community projects.

The Future

As technology continues to develop at a rapid rate and people inevitably move towards renewable energy sources, you will be ahead of the game. The Plico system has plans for a battery/technology upgrade in about year 9 or 10 of the contract, funded by the VPP. This means you will potentially save thousands of dollars as your equipment nears the end of its warranty period.

Add into this the trend towards electric vehicles, and transition from appliances reliant on gas or other non-renewable sources and early adopters of solar storage systems will be increasing their savings and reducing their impact on the planet now.