South Australia is one of the most progressive (and controversial) energy markets to study. Jay Weatherill’s South Australia Government has just announced they will provide solar panels and Tesla Powerwall battery storage for 50,000 homes.
After the state just installed the world’s largest battery, they’re now after another world record with the ‘world’s largest virtual power plant’ designed to disrupt the current power industry. The new approach would see the solar systems and batteries will be supplied and installed free of charge. That sounds like a great deal if you’re one of the lucky households, so how do they pay for it ?
The project will be financed through the sale of electricity, generated by the panels. This actually raises a number of questions. If the equipment is installed at your house, what do you pay for power if you need additional energy from the grid? That we don’t know as an energy retailer is still being found and expressions of interest will go out this week.
Normally when you collect power from the solar panels on your roof, you store it in the Powerwall and when you need power you can draw from that battery. Something you should know about this arrangement is that the energy stored in the battery can be accessed and taken to deliver to other households. This certainly takes some getting your head around and fundamentally changes the way we think about stored energy. In this model you collect it, but you don’t own it.
Free hardware is certainly an inviting prospect and depending on your power needs as a houshold and the number of sunny days in a row, there’s a chance that when you go to draw from the Powerwall, there may not be a sufficient amount stored (because its been taken by to service others) which leaves you drawing (and paying) for power from the grid. This is where the fine print matters, a lot.
Its obviously a cleaner proposition to buy and own the hardware, but the entry price of $15,000 – $20,000 is a number than many can’t reach, so having an alternative is a good thing. Frontier Economics showed the 250 megawatt system in SA would lower energy bills for participating households by 30%. Again 30% is better than nothing and is a method to bring down power prices quickly, however those who can afford the full system themselves are saving much closer to 100% with some people actually making money in the sunnier months.
Despite the announcement today, a trial of the scheme involving 1,100 properties has already begun. After this, the number will grow to 24,000 systems are set to be installed in Housing Trust properties. After the Government rolls this out to the low-cost Government housing, a similar deal will be on offer to all SA households.
The total number of systems is expected to reach 50,000 by 2022.
Now for the hard numbers about the cost of the scheme. To acquire and install the hardware, the SA Government will assist the rollout to the tune of a $2 million grant and a $30 million loan from the Renewable Technology Fund.
The Minister for Social Housing, Zoe Bettison, said the decision to install the systems in Housing Trust homes would assist the most vulnerable.
“We know that people in social housing can often struggle meeting their everyday needs and this initiative will take some pressure off their household budget.”
The Opposition Leader Steven Marshall has already pledged means-tested grants averaging $2,500 to facilitate the installation of batteries in 40,000 homes. Realistically either side of Government could have big success in offering incentives to those households who already have solar, that want to invest in a battery like the Tesla Powerwall. It helps the household reduce power prices and helps the environmental ambitions of the nation.
This announcement will inevitably receive criticism from the federal opposition, but it’s important to see this as progress in the right direction, rather than riding it off because it doesn’t solve the problem for 100% of the nation. It will be interesting to see if other states offer similar incentives in the future.