Tesla storage systems only, how viable?

Tuesday, July 6, 2021
Training
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Introduction

A recent South Australian scheme looked at installing in socially disadvantaged housing a TESLA Powerwall 2 battery energy storage system with no renewable energy component at all to help with the bills.

So what kind of savings can be achieved with this strategy? 

In this article we will look at the overall savings on these “gifted systems” and then look at what kind of payback period you would get if purchasing a system, what if we included a renewable energy component such as photovoltaics, solar and what are the other options available to invest your money on.

System details

In the scheme mentioned the participants where each given a Tesla Powerwall 2;

  • Total energy capacity of 14 kWh
  • Usable energy capacity of 13.5 kWh
  • Assumed max discharge charge power of 3.3 kW
  • Ideal temperature of 25 degrees C

Let’s make some tariff assumptions

So how will this system save money? It’s all based on the assumptions that there is a peak tariff and off peak tariff period and the difference between the two is considerable:

  • Peak tariff 7 am - 10 pm 7 x days a week ( usually off peak rate on weekend  but.  .  .)
  • Peak rate of $0.25/kWh
  • Off peak tariff 10 pm - 7 am, 7 x days a week
  • Off peak rate of $0.14/kWh


Let’s make some other battery energy storage assumptions  

Now when energy is drawn from a battery it has to be replaced and this replacement process is not 100 % efficient:

  • Data sheet says round trip efficiency of 90% at beginning of life
  • Will assume 85% on the charge process
  • Will also assume battery lasts its full warranty period of 10 years

Let’s make some load profile assumptions  

We will assume that the home in question has an average daily load:

  • 20 kWh/day
  • Will assume 85% efficiency on the charge process
  • Will also assume battery lasts its full warranty period of 10 years

How much energy will the battery deliver? 

Let’s say that the battery delivers 13.5 kWh/day x 365 x 10 years:

  • Battery delivers 49,275 kWh over its life, discharge
  • Energy required to replace this energy is 49,275/0.85 = 57,970 kWh
  • This equates to an extra 8,695 kWh from the grid

The battery delivers 13.5 kWh/day so in the first year:

  • Battery saves $1231
  • But costs $811 to “refill” the battery, via the grid at an off peak rate
  • So the net benefit to the household is $420 in the first year
  • $1.15/day, 4.6 kWh day at the peak rate of $0.25 kWh

What about over 10 years 

Let’s assume that the household continues to use the maximum for the TESLA Powerwall 2 of 13.5 kWh/day, the peak and off peak price increases 2% every year:

  • Year 1 savings of $420
  • Year 2 cumulative savings of $853
  • Year 10 cumulative savings of $4,626

But what if there is less difference between peak off peak?

This is great if you don’t have to pay for the system and it is based on a fairly large discrepancy between peak and off peak. 

For example, what if the off peak rate was $0.19?

  • Year 1 savings of $133
  • Year 2 cumulative savings of $270
  • Year 10 cumulative savings of $1,461

Not looking so good now!

If you had to pay for the system what would the savings look like? Let’s assume, to supply and install, the company charges $15,000 for the TESLA Powerwall 2. 

How many years would it take to pay off?

  • Assume again $0.25 kWh and $0.14 kWh
  • Using all the 13.5 kWh available and charging back up
  • 85% efficiency

It takes 27 years!

Hang on,  the product is warranted for 10 years!

What if I invested that money in the bank instead

At the moment interest rates are pretty low so will assume I can access 1% interest compounded monthly:

  • $15,000 investment
  • For 27 years
  • @ 1% compounded monthly


What about 1.5%?

What if we incorporated solar renewable energy?

So if we add a renewable component solar: 

  • Loads can be less reliant on the grid even more and 
  • The solar can charge the batteries ready for the evening
  • Both the batteries and solar can work together during the day

We know we have a 20 kWh household load so let’s add 5 kW of solar, assume a day/night load ratio of 60:40 and solar will produce on average, 5 x 3.6 = 17 - 18 kWh/day ( assuming Melbourne, Victoria, Australia)

Total cost of the system is $20,000 + GST.

Solar obviously only produces during the day and during the day 60% of total loads are consumed which equates to 20 kWh x 0.6  =12 kWh that can be addressed with solar so the remaining 5-6 kWh can contribute to battery charging.

In reality it is not that simple as there are many factors that play a role.


What about solar only?

What would the financial cost be on solar only?

  • Assuming 2% increase in electricity
  • Panels output reduces 2% after first year
  • After reduce by 0.25%/year
  • Paid back within seven years


But now, batteries and solar!

Let’s make some assumptions:

  • We know 60% of all loads are consumed during the day
  • So the solar can now send energy to the batteries, less exports to grid
  • And directly address loads during the day

Overnight the batteries will contribute 8 kWh out of a possible max available of 13.5 kWh.

Question is do we allow the grid to fully replenish the batteries or partially and let the solar do a bit more?

The reality is there is no perfect charge / discharge cycle, as batteries will contribute to loads in morning and afternoon if solar isn’t enough.

Assumptions

Here goes:

  • Loads are high in morning, average at mid day and slightly less in the afternoon
  • Batteries and solar will double team throughout the day to address the loads
  • Batteries at start of evening (no solar) are full and ready to go

There will be some export of solar to the grid and the batteries will be fully replenished overnight by grid, filling the 8 kWh used and 90% of the solar will be used during the day; for loads and battery charging.


The results: payback in 11 years

Conclusion

✅ Energy storage only system can negate a certain amount of energy from the grid

✅ This scenario relies on a difference between peak and off peak tariffs

✅ More viable to have a combination of solar and energy storage

✅ There are many factors to consider when making assessments of the worth of energy storage

If you'd like to see what Greenwood Solutions get up to in the real world of renewable energy, solar, battery storage and grid protection - check out our Industry and Commercial pages:

https://www.greenwoodsolutions.com.au/industry

https://www.greenwoodsolutions.com.au/commercial


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