The economics of isolation, and deciding how much to hook-up.
Folks frequently express the desire to have an independent system, to avoid the complexities of dealing with the utility company. While I admire anyone that chooses to grow their own food, I have to question the desire to cut oneself off from the power grid.
First, if you wish to live off grid it's quite doable. It requires choices and if you're content with that, then great. Most Americans really don't want to make those choices, nor do they have to.
The reason we like to net meter is that is allows us to maximize the benefit that an individual owner can get from a solar-powered installation... if a few conditions are met. Before you read on, you must understand that electricity is a commodity, and we treat it as such. Lets look at the requirements.
Some basics: The cost of local solar power is established as some base cost for the site and some extended cost expressed in $/Watt. That allows us to compute the lifetime cost for energy by choosing some arbitrary lifetime, say 20 years. All systems will have some O&M costs, but we'll assume those are small enough to be ignored for now.
The utilities do the same thing. The cost of the plant works the same way, but 30-50 years might be a typical lifetime. The plant might add $0.02-$0.06 per kWh. Then they add cost of fuel, plus cost of labor, and there you have it... $0.17/kWh here in CT.
On to the decision of how much solar to buy.
The approach taken depends on a single issue. The cost of utility commodity electricity and the cost of your local electricity. And the choices made depend on which costs more.
Typical PV: Which is when the cost of grid power is much less than the cost of local power, i.e Util << PV When this is the case, the decision to buy should seek the *smallest* system that transfers the bite out of the utility bill and shifts it to the bank, credit union, or family loan... In other words, don't seek a solution that requires any more $$$ than you currently pay. The economic wiggle room on this is the expected inflation you expect on the price of utilities or a planned increase in demand. The reason is that by buying a large PV you are effectively buying your future electricity in one big chunk. That ties up cash in an illiquid manner, and earns no interest. It is protected from inflation though... That can help drive some folks to this decision.
Incentivized PV: Util < PV. All the same rules apply to Util << PV, however the buyer should seek the largest possible incentive that's payable from the granter. Why leave $$$ on the table.
Utility = PV: This is the rare case... like owning lots of stock in Con-Edison... (sorry)
Finally, The possibility now exists to buy systems that produce local electricity for less than the cost of utility power. Util > PV
And when this happy situation is discovered the only practical conclusion is to buy as much as you can... right? Well sort of...
Unfortunately there will be some limits placed on what you can do. Utilities won't buy more than you can deliver, and the first bottleneck will be your electric service. Older homes with 60 amp service might see 7200 Watts as the limit. The next bottleneck could catch you and your neighbors. My home is fed by a 25kW transformer, that I share with 2 other homes and a streetlight. Any three of us cannot exceed the 25kW limit, and it's first come, first served.
That's it for now... Questions please.
First, if you wish to live off grid it's quite doable. It requires choices and if you're content with that, then great. Most Americans really don't want to make those choices, nor do they have to.
The reason we like to net meter is that is allows us to maximize the benefit that an individual owner can get from a solar-powered installation... if a few conditions are met. Before you read on, you must understand that electricity is a commodity, and we treat it as such. Lets look at the requirements.
Some basics: The cost of local solar power is established as some base cost for the site and some extended cost expressed in $/Watt. That allows us to compute the lifetime cost for energy by choosing some arbitrary lifetime, say 20 years. All systems will have some O&M costs, but we'll assume those are small enough to be ignored for now.
The utilities do the same thing. The cost of the plant works the same way, but 30-50 years might be a typical lifetime. The plant might add $0.02-$0.06 per kWh. Then they add cost of fuel, plus cost of labor, and there you have it... $0.17/kWh here in CT.
On to the decision of how much solar to buy.
The approach taken depends on a single issue. The cost of utility commodity electricity and the cost of your local electricity. And the choices made depend on which costs more.
Typical PV: Which is when the cost of grid power is much less than the cost of local power, i.e Util << PV When this is the case, the decision to buy should seek the *smallest* system that transfers the bite out of the utility bill and shifts it to the bank, credit union, or family loan... In other words, don't seek a solution that requires any more $$$ than you currently pay. The economic wiggle room on this is the expected inflation you expect on the price of utilities or a planned increase in demand. The reason is that by buying a large PV you are effectively buying your future electricity in one big chunk. That ties up cash in an illiquid manner, and earns no interest. It is protected from inflation though... That can help drive some folks to this decision.
Incentivized PV: Util < PV. All the same rules apply to Util << PV, however the buyer should seek the largest possible incentive that's payable from the granter. Why leave $$$ on the table.
Utility = PV: This is the rare case... like owning lots of stock in Con-Edison... (sorry)
Finally, The possibility now exists to buy systems that produce local electricity for less than the cost of utility power. Util > PV
And when this happy situation is discovered the only practical conclusion is to buy as much as you can... right? Well sort of...
Unfortunately there will be some limits placed on what you can do. Utilities won't buy more than you can deliver, and the first bottleneck will be your electric service. Older homes with 60 amp service might see 7200 Watts as the limit. The next bottleneck could catch you and your neighbors. My home is fed by a 25kW transformer, that I share with 2 other homes and a streetlight. Any three of us cannot exceed the 25kW limit, and it's first come, first served.
That's it for now... Questions please.
Tags: capacity, decision, expectation, limits
Replies to This Discussion
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Permalink Reply by Paul on -
Any members out there that have used this line of reasoning to buy their system?
Any who have rejected this? Anyone need some clarification? How about some heated debate?
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Permalink Reply by Paul on
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From my point of view the difference would be the cost of one 'solid-state contactor' or relay to isolate the system from the utility, and the labor to install that one additional item.
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Permalink Reply by John Mc Neill on -
Most backup systems also employ a timing relay, so the contactor doesn't engage until the grid power is stable.
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Permalink Reply by Paul on
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We're actually much more sophisticated than that now. Bu monitoring voltage, current & the phase relationships, we can perform a 'zero-crossing' connection. That means no transients, no spikes, no sags, no droops.
Furthermore since we operate the prime mover as a programmable torque source and control the alternator field excitation, you'll never even notice the loss of the utility when the sun is shining.
But even with all that, we really don't think of the prompt system as a backup generator.
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Permalink Reply by Paul on
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What happened to the question this was a reply to?
The question was about the ability of the system to keep providing power during a utility outage. It had to do with a presumed utility practice of requiring the shut-down of any & all standby or net-metered systems.
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Permalink Reply by Paul on
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Still so many posts about "going it alone"... I can't help but wonder if some folks are creating their own barriers to entry and hurdles to overcome?
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Permalink Reply by Diane O'Neil on -
At the time we built, grid power ($60,000-80,000 to run in lines 4 miles from the existing ones) was not a viable option. Also, our local power company is a Co-op, so it doesn't have to buy back power at retail rates as do companies like Montana Power, but basically at wholesale rates . So, we have a wind & solar system just large enough for our needs.
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Permalink Reply by Paul on
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Hi Diane,
I certainly agree that there are times when the co-op route makes sense. In your case the isolation was physical and real. I'm hoping to assist those folks that are served by the grid, yet are operating under the misconception that disconnecting some or all of their load is a reasonable approach.
It *always* comes down to economics. The reality is that it is quite expensive to store energy. There's the capital equipment of the storage system, which grows in proportion to the amount of energy stored and the length of time it needs to hold it. Then there are the inevitable losses that occur as the energy is stored, while it is being stored, and again as it is recovered.
By comparison, selling it back to the utility, means that less energy must be generated someplace else, e.g. some far away coal fired plant. My 'green streak' says even if the utility steals the energy (which is getting harder for them to do) the community still benefits.
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Permalink Reply by Larry Smith on -
Hey Paul,
Have ran across your posts else where as well and have gone to your site, which really didn't help me to understand your company. I am still curious if your in production or still perfecting your system?
You obviously have a lot of knowledge and could help a lot of people. Lets be honest though, your in business to make money, not give it away. Is it affordable to the average person? Probably not.
Being in South Florida, and if I understand what your doing properly, I am sure there is a market if it can be justified (which is what you was pointing out I believe). Cost to payback to bank...I work on a few Yachts, so have access to those that would buy something if it was worth their while. The potential can be great if greed does not factor into it much.
As for going it alone, people don't want to show ignorance. And as this tech might not be overly new, the push is and people are rushing to catch up...what with all that is going on ie the morgage situations, loans and shady wallstreet, gaining trust is hard.
:::chuckle::: I could be wrong, this is just the way I see it. I have been bumbling around the net for a couple weeks now seeing how I could tie things together to bring a reasonable product to market. Would probably be further if I wasn't afraid to call companies for information...been burned before.
feel free to email me if you like....
Larry
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Permalink Reply by Paul on
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Hey Larry,
I've been doing the board & forum thing for a long time, never even mentioning my company. This time I decided to take the commercial approach. Advice is still free!
The systems we're pushing are intended for business consumers; big-box stores, strip malls, warehouses, etc... The 50-500kW range gives us the most bang for the buck. That's to say the $3/W electric installed.
Once we establish our full scale manufacturing line, we'll be able to put extra R&D $$$ into developing a line of smaller residential systems in the 5-25kW range without breaking the bank. Expect to see $3/W for the smaller system in the future, when we get all the kinks and economies of consumer mass production worked out.
As far as bring it to market... It's strictly a function of capital. Anybody can build one or two of anything. Big deal! The unit price of 'prototypes' makes them unaffordable and unprofitable. We need to produce hundreds of genset units per month. That's just to balance the 300MW/year (electric) capacity of panel production.
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Permalink Reply by Douglas on -
To each his own. If some people want an independent system, do it. I just think the government should do more to push solar , nuclear and wind. Our energy provider`s should be using these types of energy sorces rather than oil. The government should make sure of it.
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Permalink Reply by Paul on
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Douglas,
Sure! Standalone units are cheaper, more powerful and can even deliver power during marginal times when the grid standards cannot be met.
My point is that when folks look at the ROI, it falls on it's face. These people have already skimmed the cream (conservation), and they don't like what's left (buttermilk, whey) it's just not tasty enough. So they walk away.
We can't build an product line or an industry for customers that really don't want to buy, just browse! And the notion that the government can do better is, well frankly, absurd.
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