Sunday, September 28, 2014

When does it make sense to go off-grid

Consider a household that already has enough PV to cover their personal use, just not always at the times they want to use it. They might consider going off-grid by buying batteries, etc.

This is the situation I'm in. We use about 3 kWh/day, and are exporting, on average, about 7-8 kWh/day -- so we certainly have plenty of power. If we went off-grid, we'd probably want at least 5 days' power, so 15 kWh storage. I haven't priced this exactly, but I think such a system would be at least AU $8000.

What would this save us? Well, currently our exported power is sufficiently above our consumption that I estimate our bills will be $0 henceforth (ie. I think we are exporting enough power to pay for our consumption and the grid connection). Therefore, there's no benefit to us doing that!

In fact, at current electricity prices, I can't think of a situation where doing this would be justifiable. Perhaps if we were paid significantly less (ie. as the difference between what we pay to use power versus what we are paid for supplying power becomes greater, such a system would become more attractive. What sort of difference would be needed to make this worthwhile?

I'm assuming a fixed cost of $8000 to take ourselves off-grid. I recognise that for most people (because of their greater consumption) it would be more expensive. However, in that case their savings would be greater. It's not proportional though: because we use so little power, the connection fee makes up a sizeable proportion of our bill.

Exploratory model

I have done some basic modelling of how variations in our electricity billing would affect the payback of a basic off-grid system.  There are two main components to our bill -- a quarterly service fee (connection fee), and a charge per unit of energy (kWh) used. I've modelled a range of fess and tariffs, which are shown in the table below. Different connection fees are shown across the top, and different tariff structures (the difference between our consumption tariff and the Feed in Tariff (FiT)) are shown down the side. The values in the middle is the estimated ROI for the appropriate fee-tariff combination. My belief is that the "difference in tariffs" will go up, while the basic consumption tariff stays about the same and that the quarterly connection fee will also go up. There is talk of increasing the cost of connection, so that "solar users pay their fair share" (factually incorrect: it's not that houses-without-solar subsidise houses-with-solar, but that houses-without-airconditioning subsidise those with airconditioning. Utilities don't want to discourage consumption. These articles discuss in detail.). Also, the cost of off-grid battery storage is likely to decrease markedly in the next few years, but for simplicity I've only considered an $8000 system.

I've colour-coded the data, and believe that the red ROI levels are uncompelling. The orange is marginal but might be considered by someone who was passionate about being off-grid. The green results are starting to look economic.

I modelled the payback on the basis of varying the difference in consumption tariff and the FiT. At the moment, we pay AU$0.35 / kWh for electricity we use and get AU$0.24 / kWh for electricity we export to the grid. The difference is AU$0.11 -- but I expect this to increase in the future (especially when the FiT decreases in 2016). I've also modelled changes in the quarterly connection fee. Now, it is $70/quarter, but I think it's likely to increase.


With our current tariff structure, I estimate the ROI for an off-grid system to be 6% -- this is not compelling. If the tariffs remain the same, but the quarterly cost increases to $130, I estimate the ROI to be 9% -- still marginal. Similarly, if the quarterly cost remains $70 but the difference between import and export pricing rises from AU$0.11 to AU$0.22 (quite possible in 2016), then I estimate the ROI to be 9%. If the difference between import and export pricing rises to AU$0.30 AND the quarterly cost increases to $100 (I consider this reasonably likely in the next 3 years), then the ROI is 12% -- this is starting to look like it could worth doing. Couple that with a 25% decrease in the price of off-grid systems in that time (given that some people are predicting a 50% decrease in price by 2020, this seems plausible) and the ROI is 15% -- I would consider doing this, and I bet a lot of other people would too.


One caveat is that because we use so little power, changes in the quarterly connection fee have a big affect on the ROI. For households that use a lot more power, this will be less important and only the "difference in tariffs" will have much effect.
A second caveat is that this model does not consider any on-going expenses associated with maintenance of an off-grid system.

This post was written by Angus Wallace and first appeared at

Thursday, September 25, 2014

Renewable energy as an investment

Summary: My wife and I have invested about $8000 in solar PV, a solar hot water, and a better fridge. I estimate the return on this investment to be 17.5%, which I think makes a compelling case for people to do similarly.

I moved into my house in early 2013. Just before Christmas, we had a 2 kW solar PV system installed. We decided to get a good one, with an SMA inverter, and it cost about $5000. I realise there are similarly-sized systems that are much cheaper, but I wanted to be more confident in the longevity of the system.
Since buying it, I've been monitoring our power use quite closely, but we have always been quite careful in our use. We generally don't use heating or cooling (though we do have an electric blanket on the bed, and an electric throw for the very chilly evenings) -- the house doesn't get below 13 C or above 30 C so it's pretty bearable.
When we bought the house, it had an electric storage hot water system (300L), which I knew was a very inefficient way to heat water. My goal was always to switch to a solar hot water system. My feeling was that the existing electric storage unit would likely use about 3 kWh/day, which I thought was pretty wasteful and uneconomic. To install a hot water heater in Australia costs nearly $5000. For what it is, this is a lot of money (a solar hot water heater is something that can be built pretty easily). I started investigating cheaper options, and found that a Chinese-made 240L evacuated-tube and built solar hot water systems can be bought in Australia for about $1300. I bought one, and installed it on the roof. The setup I've gone for is quite complicated, because I decided to get a separate smaller unit to supply the kitchen, and also wanted to switch the house to rainwater (other posts to come).

We finally did this two weeks ago, and I've been surprised. It appears that the electric storage hot water system was using more like 6 kWh/day -- a huge amount of power! Without it, our average daily consumption (admittedly only over a 2 week period) is 3 kWh/day. I have done a bit of modelling of the estimated savings that we are gaining from the combination of the solar PV and hot water system, and I estimate that we are saving, on average, almost AU$4/day. At this rate, we will repay the investment in just over 5.5 years (ignoring any kind of future discounting, or cost of finance) for a ROI of 17.5%. Assumptions:
  • 0.35 c/kWh cost of electricity drawn from the grid (this is the rate in SA)
  • 0.22 c/kWh paid for electricity exported to the grid (we got in for the last available Feed in Tariff (FiT), so for people installing now the economics will not be quite as good. Also our FiT will end in 2016 which will affect the future economics. By this time though, the system will have paid for half its cost.)
  • boosting of the system (using electricity to heat the water when the sun is insufficient -- eg. the middle of winter) is sufficiently rare not to affect the overall statistics. I think this is likely.

The last assumption might seem unlikely to you -- when we've been through winter, I'll comment on the frequency with which we need to boost the system. However, the analysis I've performed so far ignores that some of the electricity produced by the PV is consumed directly (ie. it's offsetting our consumption), which means that our savings are actually a bit higher than $4 / day, and hence our ROI is actually a bit higher than I've calculated.

This post was written by Angus Wallace and first appeared at

Tuesday, September 23, 2014

What do scientists believe?

I think there are many misunderstandings about what science is, how it works, and what scientists believe about the world.

Science is a process -- a tool -- for discovering things about the universe. Because of this, scientists hold a plurality of beliefs -- saying "what do scientists think?" is a bit like saying "what do Australians think?" -- there are as many answers as there are scientists.

With that caveat in mind, let's examine what science does.

Science is a process by which we can show ideas to be wrong. The phrase "scientifically proven" is incorrect -- science never proves anything*. Science can only disprove theories, and any currently-accepted scientific theory is pending invalidation.

A good example of this is Newton. His law of universal gravitation is a fantastic tool for understanding the motion of heavenly bodies. Is it "right"? No. For centuries people believed that Newton's laws were True (with a capital T), in the sense that they described the workings of the universe. In the 20th century, Einstein's theory of relativity revised Newton's laws, making them more accurate when dealing with very-high-speed objects. Is Einstein's theory "right"? Probably not.

However, despite their imperfections, both theories are extremely useful at describing motion. So in a sense, they are actually both correct theories. It's a bit like someone asks you how old you are and you say 28 and they say "happy birthday!", so you reply, "well 28 and 112 days 6 hours 25 minutes ..." -- Sometimes all that extra precision isn't needed. Both theories are right, but we (currently) think that the theory of relativity is more right than Newton's laws. In the future, there may be further improvement's to the current theory which may make it more correct still and better approximate the universe's behaviour. Of course, no human endeavour will ever be perfect, and I strongly doubt humans will ever articulate a set of theories that describe exactly how the universe works.

Note that this is a different perspective from what previous generations of scientists may have said. This is because the 20th century saw some blunt boundaries placed on what humans can know.

The first was Godel's incompleteness theorem, which basically says that there are things in maths that can never be known -- that is:

  1. truths that we can never show to be true
  2. falsehoods that we can never show to be false
  3. our mathematical system can't demonstrate that it is internally consistent
This was pretty controversial at the time, and I think there are probably many scientists today who don't really think about this much.

A second was Karl Popper, whose theory of science described what I consider to be the scientific method. That is,

  1. create a new falsifiable theory
  2. try to disprove it -- if you succeed go to 1
  3. if you fail to disprove it, then consider that the theory has some merit.
  4. keep trying to disprove it by creating new theories
Falsifiability means that it is possible to show a given theory to be false. It is a common criticism of theories such as "intelligent design" which are sufficiently vague that they cannot be disproven. In analogy, Bertrand Russell coined the idea of a celestial teapot, orbiting the sun somewhere between Earth and Mars. This is not a falsifiable theory, but just because it is not falsifiable does not make it true.

So, what do scientists believe? All kinds of things, many of which are wrong. They're only human, of course. Science is a messy business -- it is by no means a straight line journey towards truth. There are vested interests and power games: interpretation can be bent to serve entrenched interests and results can be corrupted by money. Science is a human endeavour, and suffers from all of our human foibles. Max Planck reportedly said that "science proceeds one funeral at a time," which I interpret to mean that old scientists are set in their ways and have their own cherished beliefs (and personal position of prestige) which they are less willing to critically examine.

In summary, there is a saying: all models are wrong, but some are useful which I think is a good way to think about science.

This post was written by Angus Wallace and first appeared at

* I wrote "science never proves anything" -- this is true, but it may mislead. Scientists use the words theory and proof differently to other people. In science, a hypothesis is an idea about how something might work. If we try to disprove a hypothesis and fail, then we would call it a theory. Non-scientists often hear the word "theory" and think it sounds weak or inconclusive. In fact, we still refer to Newton's theory of universal gravitation and Einstein's theory of relativity -- these are both extremely well-established models of reality.

Introductory R workshop

A colleague and I recently presented a 1/2 day workshop on introductory R and rQTL. We wrote the course materials in knitR, and presented the workshop at the Waite Campus in Adelaide.

It was successful, and the course materials and preparatory code are available at github.

Monday, September 22, 2014

Reducing electricity consumption to affect political change

Many people are concerned about the negative effects that humans are having on the Earth's ecosystems, and with good reason: those systems support us, and without them we would not survive. It is estimated that for every dollar of GDP produced, the natural world contributes .75c -- these are services that nature provides for free and, without which, our quality of life would drop by 75%.
A big cause of human destruction of natural systems is in the provision and delivery of energy. The main culprits are fossil fuels which are starting to alter the world's climate -- a change that, if unchecked, will wreak great destruction on both the natural and human systems that support us. There are now technologies (solar PV and wind turbines) that can produce energy with much  less damage to the environment, and it is imperative that we transition to these as soon as possible. Unfortunately, there are entrenched interests that are heavily committed to fossil fuels and use their influence to slow the adoption of newer, less harmful, methods of energy production.
What is clear is that majority political support for serious action on climate change is currently lacking.
There are huge forces at work here. In the absence of a government with the ability and disposition for serious action, what can an individual do to help this process?

Number one: Use Less

When it comes to reducing one's impact on the systems that support us, there is simply no substitute for using less. Even "green" energy sources have impacts (albeit much more minor). Using less frees money and resources that can be better deployed by helping other, less fortunate, people adapt.

Number two: Avoid electricity or fuel where possible

Electricity is hard to produce, and there are always wastes and damage to the environment -- even when using solar PV or wind turbines. This is because the manufacture, installation and maintenance of these generally result in carbon emissions and other forms of pollution.
Therefore, if a task can be performed without using electricity at all, it is preferable to do so. A great example of this is hot water, which can be heated directly from the sun without need for electricity at all. By doing this, your electricity consumption will be much lower.
Similarly, a solar cooker can cook food without fuel or electricity, using only heat directly from the sun. These are simple and cheap to build.

Number three: buy carbon-emission-free ("green") power, and/or install solar panels

Here is where your large reductions in consumption will help -- because you're now using a lot less power, you will not need many solar panels to offset your electricity consumption (cheaper!).
At my house, we have reduced our power consumption to about 3 kWh/day for a family of four without significant lifestyle sacrifices. I think it can go lower still. We have a 2 kW solar PV system, which produces an average of about 6 - 8 kWh/day (averaged over the year) -- more power than we consume. We do draw power from the grid though, as we do use power at night (when the PV panels aren't producing), which is why we also buy carbon-emission-free power. By doing this, we ensure that we're not directly supporting the use of coal for electricity generation and because our power consumption is so low, the additional cost is very small. This also supports the businesses that are producing renewable carbon-free energy in Australia.

Dirty companies only have as much money as we give them

Using less means less revenue for the large energy generation, distribution and retail companies that, generally, are slowing the adoption of renewable energy technologies, and affecting public policy in negative ways. Make no mistake -- the combined actions of individuals is very powerful. The uptake of domestic solar PV has already had a huge effect on the energy generators and retailers in Australia.
This is because solar PV is usually producing power at precisely the times that energy is most expensive (energy retailers pay a fluctuating ("spot-") price for electricity,  and the times when the spot price is highest are the most profitable for the generators. Domestic solar PV is taking the edge from this demand, which is having a significant affect on the profitability of some of the big dirty producers. These kinds of commercial disincentives work to the advantage of renewable energy technologies.

If Australians continue to reduce their consumption and simultaneously install distributed generation (like solar panels, solar hot water, etc) and buy carbon-emission-free power, this will help to encourage the necessary changes. This will have a concrete effect on Australia's carbon emissions and reduce the likelihood of catastrophic climate change.

Remember, a carbon tax only has benefits because it causes people to use less -- we as concerned citizens can use less all by ourselves.

This post was written by Angus Wallace and first appeared at
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