let's talk about battery banks- I reckon the "they aren't worth it" thing is wrong

[ggunn]

If you have net metering and are producing more than you are using during daylight hours, your meter runs backwards during the day and forward at night at the same $/kWh. The net charge per kWh for storage on the grid is ZERO. How can battery storage cost less than zero? Beyond that, a large portion of grid tied PV systems do not produce more than the house is using during the day; all the power produced is used immediately. Batteries make even less sense in that situation.

 

[wwhitney]

To followup on my example with leased battery storage at a cost of $0.20/kWh, suppose now you don't have net metering. Instead, the POCO charges you $0.30/kWh on usage, but only credits you $0.05/kWh for any net generation.

In this scenario, your options for surplus daytime generation are:

A) Sell your surplus generation to the POCO at $0.05/kWh, you save $0.05/kWh of surplus generation.

B) Pay $0.20/kWh to store your surplus generation in your batteries, which you use to reduce nighttime consumption. That saves you $0.30/kWh, for a net savings of $0.10/kWh.

Now option (B) is a better option, so go ahead and use batteries to save money.

Generalizing this, batteries save you money when:

(Net generation credit/kWh) < (Nighttime energy cost/kWh) - (Battery storage cost/kWh)

In particular, if the first two terms are the same (net metering), batteries can never save you money.

Cheers,
Wayne

 

[PVfarmer]

We're all right, AND wrong!
This paper is going to take a while to digest.

4.2 Interaction with PV
Interestingly, optimal battery system specification had little to no sensitivity to the level of the installed PV generation. This was found to be true across the entire range of battery power and available energy studied. This is most likely because PV generation has minimal impact on the nature of the aggregate load profile when viewed on the order of an hour or less (where our optimal systems generally operate), and thus has only marginal impact on optimizing system
size.
However, the presence of PV generation can affect the value added by a battery. While the addition of energy storage is found to increase total utility bill savings regardless of the presence
of PV generation, it appears that adding storage to a facility without PV is likely to be a more valuable venture than adding storage to a facility with PV. The root cause for this is most probably the fact that PV alone can capture some demand charge savings, leaving fewer savings
to be harvested by storage. The importance of this effect is debatable, though, as many facilities
see little noticeable impact of PV on the value of storage. Further, trends could change significantly when large amounts of PV are installed, backfeeding power through the meter is restricted, and/or financial incentives are offered for pairing storage with PV.

4.3 Effect on Energy Consumption
Total consumption is increased due to the inefficiency of the battery system in all cases.
However, there is a strong tendency to reduce energy costs because the battery typically discharges to reduce peak loads during on-peak times where energy prices are high and charges
during off-peak times when energy prices are low. The magnitude of energy cost effects is much smaller than the effects on demand charges.
http://www.nrel.gov/docs/fy15osti/63162.pdf

 

[winnie]

While you are digesting that paper, keep in mind this important fact: the 'costs' will be measured differently by different audiences.

When the audience is a retail customer with 'net metering', what they care about is how much the utility company will charge. Batteries are not economically viable to this audience.

When the audience is the utility, buying power on the 'spot' market with various 'renewables mandates', the equation changes.

-Jon

 

[wwhitney]

We're all right, AND wrong!

My model above is correct as far as it goes. Of course it is simplified, it doesn't consider tiers, TOU, or demand charges. But if you had such a simplified rate structure, the analysis above tells you the net cost or profit from adding batteries.

The point was to show you the meaning of the "LCOE" for batteries you calculated in Post #1. I hope it has helped you clear up the misunderstanding that led to this thread: your "LCOE" calculation is the additional cost for cycling energy through a (100% efficient) battery, not the total LCOE of energy drawn from the battery.

This paper is going to take a while to digest.
http://www.nrel.gov/docs/fy15osti/63162.pdf

That paper is about demand charges, which is another ball game. Batteries pay back much more easily when used to reduce demand charges.

Cheers, Wayne

 

[jaggedben]

The calculation shows how much you are paying for the energy stored and then used.
If you add in what it cost you to put there, you also minus what you would have paid the POCO for it- can't leave that minus out.

Still wrong...You're still leaving out the money you lost by putting your energy into the battery instead of selling it to the POCO.

 

[GoldDigger]

Still wrong...You're still leaving out the money you lost by putting your energy into the battery instead of selling it to the POCO.

:thumbsup:

PVFarmer cannot just arbitrarily include some numbers and ignore others. :happyyes:
IMHO he needs a good accountant to show him how to keep the books on energy costs.

 

[jaggedben]

Actually, that's the net profit/cost per kWh for adding batteries. The LCOE for energy cycled through the battery is just

LCOE = (cost per kWh cycled in and out of the battery) + (cost of the kWh that charges the battery/efficiency)

So as you conclude it is only when that number is less than (price you would pay for the kWh if you didn't have batteries) that batteries are economically favorable.

Cheers, Wayne

I wanted to respond to this... I'm not sure the way you're putting it makes any more sense than the way I did. There's a certain sense in which it is not appropriate to talk about LCOE for batteries at all because they are not ultimately a source of electricity. LCOE is used to standardize the comparison of costs for different sources that are delivered and paid for in different ways. What batteries can do is add to or subtract from those costs. You want them to subtract, otherwise they are mostly pointless. (That is, pointless for facilities on the grid, and leaving aside intangibles like having backup in an emergency). If they subtract then the math says their component of your overall LCOE is negative.

In short, I don't know how net profit/cost is different from LCOE. Just semantics I think.

 

[PVfarmer]

While you are digesting that paper, keep in mind this important fact: the 'costs' will be measured differently by different audiences.
When the audience is a retail customer with 'net metering' ....

There's still a variable there- the POCO price. When the price of PV is < POCO price, you have a good deal. When the price of PV+batteries < POCO price, you also have a good deal, net metering or not!
The equation is different for every single setup, really. Even if the people are neighbors.

The point was to show you the meaning of the "LCOE" for batteries you calculated in Post #1.

Yes, this is helpful, but...
Batteries pay back much more easily when used to reduce demand charges.
What other use is there for batteries?

Still wrong...You're still leaving out the money you lost by putting your energy into the battery instead of selling it to the POCO.

Hold on there- you said I'm wrong, but you assumed the POCO price is higher there. It isn't in every single case. That's why LCOE for batteries is better than "$300/kWh installed". The kWh/installed is just capacity, not use- it tells us nothing about the ACTUAL cost.

PVFarmer cannot just arbitrarily include some numbers and ignore others. :happyyes:
IMHO he needs a good accountant to show him how to keep the books on energy costs.

It would be nice if it was that simple, however the "accountants" aren't all on the same page about this- hence this thread. Doctors aren't the only people you want 2nd opinions from.
Still looking for an article that explains why batteries are NOT worth it that makes sense!

There's a certain sense in which it is not appropriate to talk about LCOE for batteries at all because they are not ultimately a source of electricity. LCOE is used to standardize the comparison of costs for different sources that are delivered and paid for in different ways.

In short, I don't know how net profit/cost is different from LCOE. Just semantics I think.

Hmm, semantics. They sure are semantic!
If batteries aren't a source, I'd say panels aren't either, any more than a generator. Generators don't run without fuel- so with PV the sun is the source, the panels just capture it.
The LCOE for PV tells us how much energy was captured and how much it cost to capture it, which is useful to compare to the cost without PV (POCO price).
How is it any different for batteries, they capture (and hold) X amount of power which you then use to replace the POCO priced power...
If LCOE PV + LCOE batteries < POCO price then ....GO FOR IT!

Just forget batteries for a minute.
When LCOE of PV = lifetime cost divided by lifetime output...
Net profit = POCO cost minus LCOE.
Really more savings that then become profit once the investment is recouped.

 

[wwhitney]

There's a certain sense in which it is not appropriate to talk about LCOE for batteries at all because they are not ultimately a source of electricity.

Definitely, that was the point I was trying to make.

Cheers, Wayne

 

[winnie]

There's still a variable there- the POCO price. When the price of PV is < POCO price, you have a good deal. When the price of PV+batteries < POCO price, you also have a good deal, net metering or not!
The equation is different for every single setup, really. Even if the people are neighbors.

The above point is a basic misunderstanding that you have. A number of us have tried to point it out in different ways. This is my last attempt:

Net metering turns the POCO into a virtual battery that is _free_. Net metering allows you to utilize the POCO for virtual energy storage, in addition to the normal POCO function of supplying energy.

When you are using the POCO as your battery, the POCO price per kWh is _not_ relevant, because every kWh that you 'buy' from the POCO at night has been balanced by a kWh that you've 'sold' to the POCO during the day.

When you are comparing using PV + battery to supply power at night, versus buying power from the POCO at night, then the correct comparison is the one that you post above.

But if you have already decided that you want PV, and the question is 'which battery should I use', then the comparison is 'What _additional_ cost would apply to storing the energy in a battery?' versus 'What _additional_ cost would apply to selling a kWh to the POCO and then buying it back later?'.

In the net metering scenario, the cost of PV + 'POCO virtual battery' is cheaper than the cost of PV + 'real chemical battery'.

Imagine that the POCO charges $5 per kWh (hugely expensive), but they have 'net metering'. Then (per kWh):

PV + 'POCO virtual battery' < PV + 'real chemical battery' < 'buy energy from POCO at night'

-Jon

 

[petersonra]

the bottom line is this.

if batteries were such a great idea, power producers would be using them to store the power they generate at night when they have surplus to sell during the day when it is needed.

currently for residential customers in at least some places, government policies have grossly distorted the true economic picture of both solar PV and batteries.

 

[wwhitney]

There's still a variable there- the POCO price. When the price of PV is < POCO price, you have a good deal.

Yes. Here you are comparing just two options.

When the price of PV+batteries < POCO price, you also have a good deal, net metering or not!

No, you have left out the third option: PV only. Most likely (e.g. with net metering):

PV only < PV + batteries < POCO price.

So economically you'd never install batteries for PV storage when you have net metering.

Batteries pay back much more easily when used to reduce demand charges.
What other use is there for batteries?

"Demand charges" are different from "usage charges". For a residential service, you typically only pay for your usage in kWh. For many (all?) commercial/industrial services, the POCO meter also tracks your peak usage. E.g. the meter has a counter for usage in the past 15 minutes, and it records the peak value of that counter during each billing period.

Demand charges can be quite high per kW, and you can use batteries to reduce them. You could configure the batteries to discharge whenever your facility demand is above some threshold and to charge whenever the (other) demand is below that threshold. Since you are time shifting your POCO usage by a much smaller time, and the demand charges can be very high, batteries give you move bang for the buck used this way than for PV storage.

Cheers, Wayne

 

[GoldDigger]

Yes. Here you are comparing just two options.


No, you have left out the third option: PV only. Most likely (e.g. with net metering):

PV only < PV + batteries < POCO price.

So economically you'd never install batteries for PV storage when you have net metering.


"Demand charges" are different from "usage charges". For a residential service, you typically only pay for your usage in kWh. For many (all?) commercial/industrial services, the POCO meter also tracks your peak usage. E.g. the meter has a counter for usage in the past 15 minutes, and it records the peak value of that counter during each billing period.

Demand charges can be quite high per kW, and you can use batteries to reduce them. You could configure the batteries to discharge whenever your facility demand is above some threshold and to charge whenever the (other) demand is below that threshold. Since you are time shifting your POCO usage by a much smaller time, and the demand charges can be very high, batteries give you move bang for the buck used this way than for PV storage.

Cheers, Wayne

There are several factors potentially in play here for residential use:

1. True demand charges, in which you pay a monthly fee based solely on the highest (usually 15 minute averaged) power demand during the month. The underlying basis is that POCO must size their equipment to handle peak demand and you are potentially forcing them to let it idle most the time. I know of no place that there is a demand charge on residential use.
2.Usage tier rates, based not on recorded peak demand but rather on total monthly usage. The rate for the first X kWh is low, the next Y kWh is billed at a higher rate and anything above X + Y is billed at a third even higher rate. This is common as a conservation incentive in states that are trying to reduce overall power consumption. The role of PV in this scenario is to replace top tier consumption from POCO even when it does not offset the whole bill. This is often called peak shaving, but should not be confused with shaving the demand peak from item 1. As long as the tiered rates do not also have a Time Of Use (TOU) component, storage does not play any role in this calculation. (Although month to month storage actually an option with net metering.)
3. TOU. The object here is to buy low (pay POCO at night) and sell high (deliver surplus back to the grid during peak hours.) Batteries can play a role in this even without the presence of PV in the mix. But where PV is involved, you have the additional option of storage in the virtual battery. If POCO is your only source, then you need physical storage.

 

[jaggedben]

If batteries aren't a source, I'd say panels aren't either, any more than a generator. Generators don't run without fuel- so with PV the sun is the source, the panels just capture it.
The LCOE for PV tells us how much energy was captured and how much it cost to capture it, which is useful to compare to the cost without PV (POCO price).
How is it any different for batteries, they capture (and hold) X amount of power which you then use to replace the POCO priced power...

PV panels capture energy for free, so the cost of the energy is just the levelized cost of the generator. Batteries DON'T capture energy for free, that energy cost you something somewhere else. So they are not directly comparable. A battery is like a fuel generator in the sense that it costs you in both generator and 'fuel'. If you're comparing batteries to a fuel generator for backup purposes then that's a pretty direct comparison. If you're talking about grid metering then it's all different.

If LCOE PV + LCOE batteries < POCO price then ....GO FOR IT!

How may times do we have to tell you this is wrong? You have like five people on this thread telling you it's wrong in a multitude of ways. Pass the popcorn indeed...

the bottom line is this.

if batteries were such a great idea, power producers would be using them to store the power they generate at night when they have surplus to sell during the day when it is needed.

Give it a few years, or decades, to become widespread. Grid storage is indeed becoming a thing.

 

[GoldDigger]

If LCOE PV + LCOE batteries < POCO price then ....GO FOR IT!

Should be:
1. If LCOE PV + LCOE batteries < LCOE PV - (POCO price sell) + (POCO price buy) then go for the batteries.
2. If LCOE PV < POCO price, then definitely go for the PV and see above to decide whether to add batteries. (Hint: LCOE PV + LCOE batteries will never be less than LCOE PV +0, for the net metering user.)

 

[TommyO]

Should be:
1. If LCOE PV + LCOE batteries < LCOE PV - (POCO price sell) + (POCO price buy) then go for the batteries.
2. If LCOE PV < POCO price, then definitely go for the PV and see above to decide whether to add batteries. (Hint: LCOE PV + LCOE batteries will never be less than LCOE PV +0, for the net metering user.)

I agree that this is the correct way to state that evaluation.
PVFarmer - look at this and understand it. If you don't understand why it's better than your version, please ask why.

 

[PVfarmer]

Net metering turns the POCO into a virtual battery that is _free_. Net metering allows you to utilize the POCO for virtual energy storage, in addition to the normal POCO function of supplying energy.
When you are using the POCO as your battery, the POCO price per kWh is _not_ relevant, because every kWh that you 'buy' from the POCO at night has been balanced by a kWh that you've 'sold' to the POCO during the day.

So economically you'd never install batteries for PV storage when you have net metering.

If you have no batteries and you get less for the kWhs you "sell" during the day and pay more for the ones you "buy" at night, because the LCOE for the PV is less than the price the POCO charges you to buy them back...
you are losing money. Not good. So I'm giving up on this "free battery" thing- thanks for trying!
Same thing with batteries- but you aren't selling during the day, you are "collecting", so if the LCOE of PV + LCOE of batteries is < than the POCO "buy"...you're good.

I don't like net metering at all in truth. All it does for the consumer is make the bill zero- if that's the only choice, sure , but why not make some money, if you're spending some? It doesn't do anything to improve the grid or environment...it's the least appealing option for everyone who has a choice.

Should be:
1. If LCOE PV + LCOE batteries < LCOE PV - (POCO price sell) + (POCO price buy) then go for the batteries.

But...if POCO buy and sell price are = there, they cancel each other out. Then you would have to steal the batteries!

We need LCOPOCO! Comparing lifetime costs to a single POCO price is misleading- the POCO price will go up, and the LCOE tells you at what point you've broken even with what you've saved because the LCOE is less than LCOPOCO.

1. When LCOE PV + LCOE batteries < (E * POCO price buy)

E = amount of kWh on both sides there.
That sounds reasonable.
---
http://www.rmi.org/electricity_load_defection
DISTRIBUTED SOLAR-PLUS-BATTERY
SYSTEMS ARE HAVING A PARTICULARLY
ACUTE IMPACT
• Rapid cost reductions with game-changing
functionality: Their continuing cost declines
and unique operational characteristics make
them particularly poised to gain favor among
residential and commercial customers alike—
and when grid connected, to provide value to
the grid and society as well, and not just to the
individual customer.
• Accelerating commercial application and
innovation: Growing numbers of third-party
providers are already offering such technology
pairings to commercial customers to smooth
load curves and lessen demand charges, while
solar-plus-battery systems are also becoming
increasingly appealing among early-adopter
residential customers, especially in places such
as the Northeast where the memory of blackouts
after storms like Hurricane Sandy are still fresh.4
Until recently, the general media and industry experts
both commonly claimed “electricity cannot be stored
economically.” Our analysis suggests that the fastdropping
costs of batteries, driven by their vast
deployment in non-energy sectors (e.g., electronics,
telecommunications, and automotive transportation)
are showing otherwise.

 

[jaggedben]

If you have no batteries and you get less for the kWhs you "sell" during the day and pay more for the ones you "buy" at night, because the LCOE for the PV is less than the price the POCO charges you to buy them back...
you are losing money. Not good

Sigh.

If the LCOE for the PV is less than what you sell it to the POCO for, then you are not losing money. You are making money. That's what net metering generally means.

 

[TommyO]

But...if POCO buy and sell price are = there, they cancel each other out. Then you would have to steal the batteries!

YES!

I think you're finally getting it.

Net metering is the same as having a FREE battery. If POCO buy and sell prices are equal the cancel each other out - and therefore unless your battery is free using the net metering beats the hell out of using a battery.

"I don't like net metering at all in truth. All it does for the consumer is make the bill zero- if that's the only choice, sure , but why not make some money, if you're spending some? "
Well generally the consumer is much better off taking the net metering and getting his bill reduced to 0.
Selling the power reduced means you get paid market rates - and the market rates are likely to be around $0.04/kwh.
(Get paid $0.04/kwh or get credit toward usage at $0.30/kwh... I know which one I'm choosing)