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WA Government to kill off solar?

Is the WA State Government just about to kill off solar?

As you may have read on 16th December 2020, the WA Government is conducting a trial with over 400 homes to see whether a dramatic change to electricity pricing is going to be a good thing for us all. They say it is just a trial and is not "intended" to become mandatory, but what if it was?

You can read the press release in the link above, but the bare bones of it are as follows:

9pm and 9am you pay 20 cents per kWh (not much power use)
9am and 3pm you pay just 8 cents per kWh (peak hours for solar production)
3pm and 9pm you pay 55 cents per kWh (peak hours for power use).

Would this kill solar sales in its tracks, considering the main cost advantage for solar has been getting rid of daytime electricity costs at 29 cents per kWh, and now it's only going to save 8 cents?

The obvious answer is "YES". "Regular", non battery sales of solar would be very unattractive because the annual return goes down from an average $1,350 a year to just $584. (I'll explain all the maths at the end)

However sales of solar WITH A BATTERY will go through the roof with an annual return of $2,445.

The problem is that whilst a regular solar install costs between $3,000 and $6,000 depending on equipment and installation, when you add in a battery it jumps up by $7,000 or more.

Who's got $10,000+ ready and waiting to buy solar with a battery?

Will there be a battery subsidy?
No, the Government says that there won't be, and frankly the numbers, if this trial became something more than that, prove that there's no need for one. You get your money back on solar and battery in four to five years and then make a very sizeable profit for the next five years at least, when the battery probably needs replacing (hopefully at a fraction of the current price).

The most likely outcome is that people will borrow the money to buy their solar and battery.

With interest rates at record lows, arranging a cheap revolving line of credit on the mortgage or through finance companies such as Community First Credit Union, Hudd, Brighte, Certegy etc makes a small dent in the returns from the solar & battery, but it also makes it possible in the first place.

Who wants to be paying 55 cents or more in peak time forever? ...No-one
That's why many people will do whatever it takes, e.g. a battery, to avoid paying that price.

Here's the maths I promised...

A typical 5kW inverter + 6.6kW of panels in Perth makes 30kWh per day on average.
More in Summer, less in Winter, but annually, 30kWh is typical irrespective of whether its installed on a North, West or East facing roof, or any combination of them.

How it works out now...
The average home will use up 10kWh of their solar and export the other 20kWh back to the grid for 3 cents up to 3pm and 10 cents after 3pm. Solar doesn't make much after 3pm, so 4 cents is a reasonable average.

10 x 29 cents used (price of power at the moment inc GST) = $2.90
Plus 20 x 4 cents exported = $0.80

Total per day = $3.70, multiplied by 365 days a year = $1,350 .

How it works out with the new pricing...
10 x 8 cents used (price of power during solar production time) = $0.80
20 x 4 cents exported = $0.80
Total per day = $1.60, multiplied by 365 days a year = $584

How it works out with the new pricing with a 10kWh battery
10 x 8 cents used (price of power during solar production time) = $0.80
10 x 4 cents exported = $0.40

10 x 55 cents from the battery = $5.50

Total per day = $6.70, multiplied by 365 days a year = $2,445

If I'm going to get a battery, which inverter should I buy?
A lesson we have learnt so far with our very modest number of solar battery installations is that it's not a good idea to get an inverter from one manufacturer and a battery from another. They frequently blame each other when problems come up.

We strongly recommend you get a battery made and warranteed by the inverter manufacturer. In most cases this also means your reporting for the solar and battery is integrated under one platform.

Inverter manufacturers with their own batteries are:-
SolarEdge (very soon)

Popular inverters that DON'T use their own batteries are:-
Fimer (ABB)

What a Solar + Battery solution costs (approx)
Below are for single storey, Perth single phase installation, in 2021.
Including 18 x 370W or 20 x 330W of the World Top 4 - JinKo, LonGi, Trina, Canadian.
(A bit less with smaller brands, Leapton, Seraphim, Suntech, JA panels etc)

Growatt 5kW SPH inverter + 6kWh (usable) Growatt battery = $8,800
Alpha ESS 5kW inverter + 9.3kWh (usable) Alpha battery = $10,850
Growatt 5kW ESS inverter + 12kWh (usable) Growatt battery = $12,860
Fronius Primo inverter + Tesla Powerwall2 13kWh battery (usable) = $19,750

A crude guide.. a loan over 5 years costs about $20 per month per $1,000 borrowed
$8,800 loan = 8.8 x $20 = $176 per month cost against likely $135 a month gain.
$10,850 loan = 10.85 X $20 = $217 per month against likely $189 a month gain
$12,860 loan = 12.86 x $20 = $257 per month against likely $232 a month gain
$19,750 loan = 19.75 x $20 = $395 per month against likely $246 a month gain

"Likely gain" is calculated based on 30kWh per day average solar production of which:-
10kWh is used in the house saving 8 cents per kWh
The battery is solar charged and fully used 3pm-9pm saving 55 cents per kWh.
The balance of the solar production is exported for 4 cents.