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Grid - Solar parity Caveats

Hydro from grid or solar? Not such an easy decision

by : Feb 20, 2016

In the first part of this discussion I came to the conclusion that it would cost about 20 cents per kilowatt hour to generate electricity locally using a solar array with battery storage. And since I am currently paying an average price per KWh of 37.5 cents to HydroOne in Ontario, it seems an easy decision to just cut ties with the grid.

The 20 cents figure is an ideal situation, with warm temperatures for battery operation, no derating for conversion between DC and AC, and minimal sizing of the battery bank. So once these factors are built in, the 20 cents rises towards what the cost of wall plug power is.

Examination of my generation records shows that in the worst month ever while generating (December 2015), if I were to draw fully from a battery bank the average 10 KWh per day, the generation side would not have kept up on only one day in the month. Let's say therefore that we need to ensure at least two days supply in the battery, that is 20 KWh. This is workable except in the most rare of circumstances.

In a situation where we count on twice the size of the battery bank and replacing the bank after 10 years deep cycling, using a figure of $80,000 for the panel array (40K) and the battery bank ($10K*2*2) combined, the cost per KWh averaged over the 20 year lifespan of the array leads to a cost of 31 cents. It is comparable to the 37 cents of wall power.

Considering the way the price of wall power is likely to increase even more in the next 20 year period, it still might be an attractive proposition on paper. But there are still a few more economic costs to bear in mind.

Neutral considerations

My average price per KWh includes a fixed component in the billing that does not vary with amount of power consumed. If I were to consume more, the average price would likely fall. Consume enough, and solar might be more expensive.

Better to be on-grid

If I were ever to need a large amount of power for a short time, say an electric kiln or other high-consumption appliance, the grid could supply it at short notice, subject to the size of the transformer, but the solar array might not.

Will the Ontario government dream up a charge for the grid which would apply to all residents of Ontario, even those who are off-grid? It is certainly a possibility, given that a significant number of homes going off-grid will spread the cost of maintaining the same grid over fewer consumers.

Consuming from the grid means less exposure to seasonal effects such as cold weather that decreases battery efficiency.

Better to be off-grid

Off-grid means reduced risk of power outages due to ice storms or grid interruptions due to falling trees.

Being off-grid means that power generation and consumption are not dependent on the connection to the grid at the transformer.

Conclusion

Is the situation conducive to going off-grid? Since the MicroFIT plan is currently paying me 80 cents per KWh generated the decision is simple: I continue to generate for myself and my neighbours. However as time goes by, I, along with other generators, will be watching the relative prices of