Taking your home off the grid with solar power& battery storage has never been more affordable or alluring than it is today. Even urban homeowners with an existing connection to the grid now consider the idea of becoming fully energy self-sufficient. If we rewind to just five years ago, going off-grid wasn’t something many people with an existing grid connection would seriously consider.
What’s changed? What are the benefits of staying on the grid? Why are homes going off the grid?
Why homes are considering going off the grid
There are a number of reasons that so many homes are thinking about off-grid living. The main ones are:
- Solar power is already very affordable – making it a cost-effective way for homes to generate at least a portion of their own electricity.
- Battery storage costs are coming down very quickly – with products like Tesla’s much vaunted Powerwall doing a great job of both capturing the Australian imagination while simultaneously bringing down prices.
- Electricity prices have been increasing due to a range of factors, including the rising wholesale price of electricity and network (grid) infrastructure costs.
- Solar energy is often worth more to a home when used directly. In many places, solar self-consumption is one of the main ways that homes save money by going solar. Although some places have solar feed-in incentives that encourage solar uptake, solar systems are now so affordable that higher feed-in rates are not always necessary for solar to make financial sense. Since solar system owners are already incentivised to put their solar energy to good use at home, going off the grid may feel like an easy next step.
Thinking about going off-grid? Keep these points in mind
Given the above, it would seem that going off-grid would almost be a sensible financial move – or at the very least, close enough to being cost-effective as to be attractive. But does the promise hold up to greater scrutiny?
Last year, Ergon Energy – the network operator who services the regional network in Queensland, Australia – published a list of things to keep in mind for homes thinking about getting off the grid. While one may question their bias (they do run a grid, after all), the points they raise are certainly worth considering.
We’ve summed up some of the key points below:
- Consider the paybacks: Yes, solar is more affordable than ever, with payback periods as short as 3-5 years. Battery system prices, on the other hand, are still high, and batteries do not yet always make perfect sense as an investment. Home battery system prices have only just recently come down enough to deliver payback periods shorter than their warranty periods (usually about 10 years).
- Roof space limitations: The size of your roof (unshaded) is a huge determining factor in whether or not a house will be able to go off the grid. Many suburban houses simply do not have the roof space to fit enough solar panels to go completely off the grid.
- Back-up power generation: To go off-grid with solar and batteries, you generally need a system that will reliably deliver 3-4 days of ‘energy autonomy’ to get you through periods of inclement weather or above-average energy use. As a rule of thumb, this means about 3-5 times more solar and battery capacity than you would need to achieve one day of autonomy – even if that surplus capacity is rarely used. A gas or diesel generator is another option, but fuel can be expensive and the noise a generator makes could irritate neighbours or be against local council laws.
- Usage spikes: Even if you have your solar-plus-storage system sized to meet your average day-to-day needs, you may exceed these limits at some point during the year – particularly if you have guests over for a few days. You’ll need to plan accordingly.
- Changes in your lifestyle: Your system will usually be sized according to your energy needs at the time you have it installed; an addition of a family member or a change in work schedule could alter the way you consume energy during the day, possibly requiring a system upgrade.
- Ongoing costs: Since you’ll be the owner of the equipment, you’ll bear the financial responsibility of routine maintenance and component replacements. If you’ve got a generator, you’ll also have to pay for fuel.
- The value of your property: If you ever look to selling your home in the future, be prepared for the fact that while some people might be intrigued by an off-grid home, others may see it as a con rather than a pro
Grid-connected with batteries: The best of both worlds
Remember that energy independence doesn’t have to be a black-and-white choice between total grid reliance and total self-reliance. In fact, most homes that install a solar or battery bank are highly likely to maintain their connection to the grid in order to avoid a number of the complications outlined above.
To break it down into simple terms, you have three choices:
- 100% grid reliance: Stay connected to the grid with no solar or batteries;
- Partial grid-reliance / partial self-reliance: Stay connected to the grid – but with solar and batteries to help you meet some or most of your daily energy needs;
- Total self-reliance: Cut ties with the grid and fend for your own energy needs with enough solar, battery and generator capacity to get you through any contingency.
Choosing option 2 allows you a huge amount of flexibility in terms of deciding how much energy self-reliance you would like to have – or can afford. The simplest thing you can do is to install a small, grid-connected solar system – as millions of households around the world already have.
The scale can be easily ratcheted up from there – a larger PV system, to a larger PV system with a small battery bank, to a larger PV system with a larger battery bank. It is even feasible to be nearly 100% energy self-sufficient while still having the grid on hand as a ‘backup’ source of power.
The benefits of staying grid-connected
Electrical energy systems around the world are undergoing a change of massive proportions, with millions of small-scale generators (e.g. solar homes and businesses) both consuming and producing energy. In this transformation, there are both challenges and opportunities.
If the households who can afford the equipment choose to leave the grid in masse, those who can’t afford to do so will be left to foot the bill. The companies who sell electricity will need to charge more to the remaining grid users to maintain the grid network infrastructure and to remain profitable. This situation is only exacerbated as more people defect from the grid (c.f. ‘electricity market death spiral‘).
Fortunately, innovation in the way electricity companies operate and the technologies they use or provide are giving homes well, self-interested reasons to continue to rely on – and support – the existing grid. These innovations are the encouraging ‘carrots’ to the discouraging ‘sticks’ mentioned above, the whose combined effect will likely be to keep people connected to the grid and actively participating in the broader electricity market. They vary in approach and focus, but all revolve around the principle of treating solar/battery system owners as generator assets on the grid and rewarding them accordingly. This overall concept is often referred to as ‘the smart grid’ or ‘the distributed grid’.
‘Spot market trading‘ is one example of a specific way in which a solar or battery system owner may be rewarded for their meaningful contribution of energy to the grid, but there are others as well – such ancillary services or FCAS markets.
