There Is a Point At Which It Will Make Economical Sense To Defect From the Electrical Grid (qz.com)

Michael J. Coren reports via Quartz: More than 1 million U.S. homes have solar systems installed on their rooftops. Batteries are set to join many of them, giving homeowners the ability to not only generate but also store their electricity on-site. And once that happens, customers can drastically reduce their reliance on the grid. It's great news for those receiving utility bills. It's possible armageddon for utilities. A new study by the consulting firm McKinsey modeled two scenarios: one in which homeowners leave the electrical grid entirely, and one in which they obtain most of their power through solar and battery storage but keep a backup connection to the grid. Given the current costs of generating and storing power at home, even residents of sunny Arizona would not have much economic incentive to leave the electric-power system completely -- full grid-defection, as McKinsey refers to it -- until around 2028. But partial defection, where some homeowners generate and store 80% to 90% of their electricity on site and use the grid only as a backup, makes economic sense as early as 2020.

[A]s daily needs for many are supplied instead by solar and batteries, McKinsey predicts the electrical grid will be repurposed as an enormous, sophisticated backup. Utilities would step up and supply power during the few days or weeks per year when distributed systems run out of juice.

Comments

Illogical assumptions

[aaarrrgggh]

The utilities cannot exist as a backup for 3-10% power demand; the cost of delivery would far exceed the cost of energy. Most homeowners would quickly turn to a small natural gas or gasoline generator to recharge batteries. Fortunately, cities don't work especially well for off-grid, so there should be some form of baseload.

By my math, batteries at $250/kWh(B) are comparable to a generation cost of around $0.07/kWh when fully discharged each day. The problem for off-grid is that you are going to want enough batteries that you don't need to start your generator more than a few days per year, which almost doubles your battery count. It quickly becomes poor resource utilization.

I would think that it is far more likely that we will see variable voltage/variable frequency distribution circuits that allow opportunistic load management options: the lower the voltage/frequency the higher the cost, and the greater the incentive to feed back into the grid. With customers having a bi-directional inverter, it becomes easy to manage.

Re:Illogical assumptions

[blindseer]

I believe you are correct that people would prefer a generator over having electricity from a utility. Where I think you are wrong is that people will want to run this generator as little as possible.

Natural gas is cheap and there is little evidence to expect the price to rise much. A large number of people in the USA already use natural gas for heating, cooking, and hot water. What is becoming more practical as technology marches on is the concept of residential combined heat and power (CHP). If people are burning this natural gas anyway for heating their homes and/or water then why not use a CHP unit to provide the heat and top off their batteries?

This CHP would need to be fairly large if relied upon for extended periods where there is not enough sun. In places where there is winter a natural gas furnace can run quite often, which if replaced with a CHP unit this can mean an abundance of "free" electricity too.

With this in mind imagine what an off grid electrical system would be made of. You'd have your battery pack, inverters, a CHP unit, and solar panels. When doing the math to size up the solar panels in this system how much area would it need? I guess that in many parts of the USA the size of the solar panels would have to be zero.

For giggles once I thought I'd compute the cost of fuel to run my own natural gas generator as opposed to buying electricity from the utility. The cost difference was very small. I don't run my own natural gas generator because then I'd have to put up with the noise all the time or invest in a battery pack so it runs while I'm not home. The need for batteries to keep the system efficient and (effectively) noise free puts the price well beyond the utility. If batteries get cheap enough to make solar panels on my roof viable then it also means that they'd be cheap enough to make a residential CHP unit viable. The noise problem could also be solved with proper mufflers and/or an unconventional engine design, potentially reducing the costs of the batteries needed as well since I'd have little fear of the noise from running at odd hours.

Solar power that is available only (maybe) during the day cannot compete well with natural gas available at all hours of the day. Improving battery technology does not just make solar look better it makes natural gas look better too. Nearly half of the households in the USA use natural gas for heat and very very few use solar. The switch to CHP would be nearly trivial for many where rooftop solar would need a roof properly oriented to the sun and free from obstructions from trees, other buildings, windmills, and nuclear power plants.

Taking this one step further we see a large cost of electricity in the summer being for air conditioning. What if instead of an electric motor the A/C compressor was turned with a natural gas engine? An engine that could also provide hot water and/or electricity? Now you are cooking... um, cooling with gas! Also, I get to keep my shade trees, meaning I would not have to run the air conditioning as often.

It will also require a change in law

[ronaldbeal]

In many municipalities, being grid connected is required for occupancy. In fact there have been a number of stories of governments condemning "off grid" homes even though the home had all the amenities that a grid connected home has.

What scares me about this

[rsilvergun]

is that those who can't afford solar benefit from the electric grid. When the ones who have money to power their homes themselves what happens to the ones who don't? Does the grid shut down and leave them without power? Probably.

Re:What scares me about this

[Anonymous Coward]

In the UK solar has always been the purview of the middle class. Those struggling at the end of the week can't afford thousands of pounds to install a solar system, but those who have that lying around have been able to enjoy selling their electricity to the grid at hugely inflated prices, effectively subsidised by the increased energy bills of the poor.

From the point of encouraging solar and bringing prices down it's been very effective, but it is also yet another transfer of wealth from the poor to the rich. We also have the fact that being poor makes you more likely to: use a coin operated or prepayment meter (higher rate), electric heating (more expensive than gas), space heaters (more expensive than central heating), have less ability to switch providers (I know that's something totally abscent in large parts of the states, but here we can shop around for cheap power), have older less efficient appliances and have homes much poorer thermal insulation. It all adds up to mean that being poor you use more electricity and pay more per kWh than your richer neighbours.

We need to recognise that energy is a basic fundamental necessity of life and start giving it away. We're effectively already paying for it through the benefits system, but it would make a lot more sense to give each household a certain amount of "free" energy every year and charge more than we currently do for overage fees. That would also greatly incentivise power saving whilst providing people with what is a vital utility. There's already government programmes to provide insulation and other energy-efficiency systems at a free or subsidised rate to low-income households, so make achieving a good energy rating a prerequisite of renting out residential property and call it a day.

Re:Extremely expensive

[AHuxley]

People can buy a lot of battery power. Have it installed. Heat with gas or wood, cook with gas, gas hot water.
The problem is then A/C, the washing machine, dryer.
That battery system in the home has to cover the electrical draw as the dryer, washing machine, the A/C turns on.
Get new appliances that start up in a different way that will not cause any battery problems? Consider a gas dryer?
Move to a state with no AC cooling needed in summer?
New big battery pack, covered for power all year, no more appliance issues. Use gas and wood.
The utility has one final method of keeping its grid power connected and been paid for.
Government.
A house is not considered ready for humans until its grid connected.

Cost of power is Transmission and Distribution

[aberglas]

+1.

Here in Oz, aboiut 1/4 of the cost is generation, 1/2 transmission and distribution, and 1/4 admin overheads, old solar subsidies etc. So the fixed cost does not even begin to cover the transmission and distribution costs.

The other thing to note is that home solar power needs to compete with the 28c/kwh we pay for power retiail, and not the avg 6c/kwh that is paid wholesale. So batteries start to become economical at about AU$1,000/kwh. And a natural gas generator will fill in the cloudy days.

So we are in for bg changes. And I think there would be a riot here if any government tried the US trick of forcing people to be on grid.

Re:They're still going to want more money

[Anonymous Coward]

Or they lobby to make it illegal, which happened in my country. Here, you can produce your own power, but you MUST feed it into the grid before consuming. Needless to say, the trade-in/out rates are so bad that it basically forces you to pay for your own produced power, it just is a bit cheaper.

Inconvenient truth about solar

[knorthern knight]

1) There is a maximum amount of solar energy available. In round numbers, it's approximately 1 kilowatt per square metre at the earth's surface... period... end of story. You're *NOT* going to see a "Moore's Law" boosting solar panels every year into infinity. Current solar panels are from 15 to 23 percent efficient, and degrade with age. Yes, there is room for improvement, but there is a hard ceiling.

2) Solar panels produce 300 times as much toxic waste per unit of energy output versus nuclear powerplants http://www.theenergycollective... Definitely *NOT* "green".

Re:Inconvenient truth about solar

[angel'o'sphere]

2) Solar panels produce 300 times as much toxic waste per unit of energy output versus nuclear powerplants http://www.theenergycollective... [theenergycollective.com] Definitely *NOT* "green".
That is wrong.
First of all except for some acids, there basically nothing toxic left in the production process.
And those 'wastes' are usually just collected and reused in the process of building more panels.

It helps to have some common sense an a clue about physics and chemistry, so you don't fall for such idiotic links.

Paying for the backup?

[Bruce66423]

Historically people paid for electricity. Now that they aren't paying for electricity, they will have to pay for the backup supply that they want - or they can go without. The idea that those who are 80% off grid should in effect be subsidised by those who can't leave it is unfair. Unfortunately the implementation of the transition - with a rather severe change in the pricing system to reflect the actual costs of keeping power stations available but not selling electricity - is going to be painful. This will be because the opposition will ally those who have got their solar power / wind power / other supplies to those who are campaigning against climate change, who will argue that the tariff changes will discourage low carbon solutions.