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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.

19 of 494 comments (clear)

  1. They're still going to want more money by locopuyo · · Score: 5, Insightful

    The power companies are still going to charge the same amount people are paying now even though they're buying less energy. I don't know how much the spend on the actual fuel for their power plants but I doubt their overall operating costs would go down much.

    1. Re:They're still going to want more money by Anonymous Coward · · Score: 4, Interesting

      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.

    2. Re:They're still going to want more money by vtcodger · · Score: 5, Insightful

      This is just this morning's tidbit from BeauHD's seemingly endless supply of climate-crap. The dates are incredibly optimistic and the problems are minimized or ignored completely. Nonetheless -- barring running into some inherent limitation of battery storage -- many homes and businesses will very likely drop off the grid someday when it becomes technically and economically practical to do so. Many folks living in densely populated urban areas with multistory housing probably will never leave the grid. Not enough solar panel area to cover refrigeration, illumination, cooking, hot water, and climate control.

      Hint -- watch Hawaii. Economically developed. Reasonable amounts of sunshine. Moderate climate, so minimal heating and cooling needs. High electricity cost because hydrocarbon fuels for electrical generation need to be lugged 5000km.from North America. It'll probably be one of the first "countries" to go renewable.

      --
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    3. Re:They're still going to want more money by kilfarsnar · · Score: 4, Insightful

      A government can only rule with the consent of the governed.

      What? You think brutal dictators have the consent of the governed? You don't need consent when people are cowed by fear.

      If you don't like having to feed your own power to the grid then don't do it. I thought that was the point of the article, that the utilities lose their power over people because technology has flattened that economics of scale curve. If enough people produce enough electricity that they utility is effectively doing nothing but collecting a fee for the grid tie, that no one uses, then the utility can do nothing if enough people stop paying the fees.

      Did you read the part where the poster said it is illegal to not feed your power back into the grid? Just don't do it? Gosh, why didn't he think of that? It's not like the authorities have a means of compelling compliance with the law, or anything.

      Perhaps you can explain what I'm missing here?

      You are missing that governments can rule by force, without the broad people's consent, and that when something is made illegal, doing it anyway can bring on harsh consequences.

      --
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    4. Re: They're still going to want more money by netsavior · · Score: 4, Insightful

      Texas has a statewide law preventing HOAs and Municipalities from banning solar panels. There are tons and tons of panels up in conservative areas.

  2. Illogical assumptions by aaarrrgggh · · Score: 5, Interesting

    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.

    1. Re:Illogical assumptions by blindseer · · Score: 4, Interesting

      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.

      --
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  3. It will also require a change in law by ronaldbeal · · Score: 5, Interesting

    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.

  4. What scares me about this by rsilvergun · · Score: 5, Interesting

    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.

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    1. Re:What scares me about this by eriks · · Score: 4, Insightful

      Microgrids and community storage? Power co-ops?

      Perhaps I'm overly optimistic, but I think the incumbent utilities do have a lot to worry about (in the long-term) since entire communities may decide that they can pool their panels and storage at a lower cost than the utilities can provide. It will make sense to have as many homes as possible be self-sufficient, but it will also make sense to have the capability for neighbors to share power resources. This process will be very complex to navigate, since it's unlikely that the utilities will be willing to just abandon their equipment and let it be used (and upgraded) by localities.

      Also at some point, it will make economic sense to not only feed the grid with power when storage is full on a sunny day, but also feed the grid with stored power when you know it's going to be sunny tomorrow. That still doesn't solve the base-load problem (for when you know it's NOT going to be sunny for a week), but it's a start.

      It may be that utility-scale power will eventually only directly serve metro areas. Maybe they'll like that? Not having to maintain roadside lines and domestic interconnects in the less populated places?

      Solar only for the rich is indeed a scary prospect -- though if only the rich get solar, the utilities will still have plenty of customers, since the "rich" are, at most, 10% of the US population, and it's commerce and industry that use the lion's share of generated electricity.

      Also, I'd bet at least half of those 1 million homes have solar city or the like, with no out-of-pocket expense by the homeowner. I'd expect that to continue, especially in areas with higher than average electricity costs.

  5. Re:Extremely expensive by AHuxley · · Score: 4, Interesting

    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.

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  6. It will always be better to share by FeelGood314 · · Score: 5, Insightful

    If I want to be off grid I need to:
    Have storage for multiple days if the sun doesn't shine.
    Have excess generation capacity
    Have enough power in my batteries to power all my appliances at once.

    Now if I get together with a few neighbours I don't need as much excess, since the likely hood of us all turning on every appliance is low we wouldn't need as much absolute power, and we could share some costs of the circuitry. If my neighbourhood got together with another neighbourhood we could save even more and if we got together with neighbourhoods geographically separated from us it would be even better. Ideally we would create a grid stretching across the contentment so that we could share power with people in other time zones or to take advantage of things like potential energy in river water, or maybe a instead of putting our solar panels on the roof we could put them all somewhere more convenient that gets more sun. Maybe we could even pay someone else to manage all this stuff. Get them to do the research, borrow money to build the infrastructure, manage the lines between me and my neighbours,.. I wonder what we would call a company that would do all this for us?

  7. Re:not so simple an equation by gravewax · · Score: 5, Informative

    the power plant is the small part of the cost, the cost is the millions of kilometres of power lines, poles, transition stations etc etc. the majority of which will need to still be maintained and operated.

  8. Re:Inconvenient truth about solar by bluegutang · · Score: 5, Insightful

    1 kilowatt per square meter is a huge amount of power. Assuming the sun only shines 6 hours a day (it's more of course, but less intense towards sunrise and sunset), that means each square meter gets 6 kWh of energy per day. Average consumption for a US home is about 30 kWh per day. So just 5 square meters of perfectly-efficient panels is enough to satisfy their power needs. In short, there is no shortage of solar energy.

  9. Paying for the backup? by Bruce66423 · · Score: 5, Interesting

    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.

  10. Re:Inconvenient truth about solar by AmiMoJo · · Score: 5, Insightful

    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.

    Fortunately that's more than 160x the amount that the US currently consumes. Even assuming you made no efficiency improvements (reduced consumption, improved PV panels) you would only need about 0.6% of your land mass to provide all the electrical energy you currently consume (plus storage of course). And no-one is suggesting 100% solar, just to be clear, it's merely pointing out how much energy there is available.

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

    Long ago debunked.

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  11. Not if you need reliability by Solandri · · Score: 5, Insightful

    I have the technical skill and equipment and resources (domain, web hosting) to run my own email server. I actually did it for 3 years. Eventually I gave up and switched to a hosted service (first yahoo, then gmail).

    The reason is that it's great running your own service when everything works. But when stuff breaks, *I* had to fix it. If I was waiting for an important email, I had to drop everything I was doing and fix it. If I was waiting for an important email and didn't notice it broke, then I blissfully continued waiting until a day later when a friend asked me "Why haven't you responded to my email?" The final straw was when it broke when I was on vacation, leaving me technologically incommunicado unless I abandoned my vacation to fix it. I already have a job, and it's not babysitting a mission-critical email server. So I switched my email service to one run by a company who monitors it 24/7, notices outages within minutes instead of hours or days, and has expert staff who are more skilled at fixing it than I ever could be unless I quit my day job.

    Unless you're an expert at diagnosing and fixing home solar installations and batteries, and can drop whatever you're doing at any time of the day (or night) to run home and fix it when the wife calls to say the house has no electricity, you don't want to be off the grid. Sometimes the first indication you'll have of a problem with your array will be when your battery dies because it hasn't been getting any power from the panels all day. Then you'll be stuck trying to fix it without the benefit of having electricity (to, say, search the net to try to help diagnose what the problem might be). Even if you've got a backup generator, it requires at least annual maintenance and the fuel has to be refreshed (gas goes bad after about 6-12 months, quicker if it's an ethanol blend and your storage container isn't completely airtight).

    Things that you use intermittently like a car or a washing machine, it's OK to own because you can survive a short downtime without it if it should break. Things that need close to 100% uptime like electricity or email or phone service, you want it provided by a company with staff on hand 24/7 dedicated to providing it and fixing it when it breaks. Solar panels on your home supplement this reliable power source, not the other way around.

  12. Re:Inconvenient truth about solar by angel'o'sphere · · Score: 4, Interesting

    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.

    --
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  13. Re:Inconvenient truth about solar by whoever57 · · Score: 4, Informative

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

    The simple fact that that study equates a pound of waste from solar panels to a pound of radioactive waste from a nuclear reactor shows that it is inherently biased and cannot be trusted.

    --
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