Just recently, a winning combination of the Tesla Powerwall and a 5kW rooftop solar panel was capable of delivering electricity of about the same cost as grid power. Our current estimates show that solar + battery storage is now even cheaper.
The launch of the eagerly awaited Tesla Powerwall 2 in November 2016 was good news to the solar industry as it slashed the price of battery storage by half in comparison to Powerwall 1.
Australian Solar Quotes has made an analysis of the economics of a Powerwall 2 battery and a 5kW rooftop solar plus grid for back up and exports as compared to grid-only supply for a home with a north-facing roof in Adelaide, and which uses 4800 kWh each year.
The analysis comprised calculations for the annual bill of households with and without solar PV and battery storage.
Assumptions made included a 10-year battery life and a 20-year solar PV life, both having no residual. It was further assumed that the cost was financed with a home mortgage.
Battery storage findings
When considering grid offers, the average of 78 markets offers from 14 reputable retailers in the market were used. It was assumed that all discounts in the first scenario were realised and in the second scenario, only unconditional discounts were realised.
It’s evident that households are better off installing 5 kW solar panel and battery storage instead of depending on the grid-only supply.
Since 2016, new battery suppliers have entered the market (Global-Roam’s Battery Finder website shows 203 different residential battery systems for sale in the Australian market).
The Climate Council approximates that in 2017 alone, 20,000 new home battery storage installations were made; more than triple that of the 2016 new installations which were 6,750.
More recently, the South Australian Government launched a plan to install 50,000 Tesla Powerwall 2’s and 5 kW PV in a deal that would see the government owning the assets with households involved in the policy expected to pay just 27 cents per kWh of electricity supplied.
This post reviews again the economics of these two scenarios based on the latest information on prices.
To start with, taking the average of all offers in the market, (the average price for a 4800 kWh PV system per year customer, from the 72 markets offers provided by 16 retailers today is 42.4 cents per kWh (assuming all discounts are realised) or 46.4 cents (assuming only conditional discounts are realised).
The results indicate a 12.5% increase compared to the average prices worked out in a similar way in November 2016.
Tesla now approximates a higher installation price of Powerwall 2 between $11,075 and $10,300), taking the average installation price quoted on their website today relative to that of November 2016.
Notably, the price of a 5kW PV panel has dropped significantly from $7,318 to $5,500 (going by the average price quoted on australiansolarquotes.com.au then and today).
Additionally, PV feed-in rates have more than doubled from about 6.8 cents per kWh in November 2016 to around 16 cents per kWh today).
Combining a 5kW PV+Tesla Powerwall 2+grid is considerably cheaper today than the average price provided under the grid-only supply even when it is assumed that all the grid discounts were met.
The writing is on the wall for grid-only supply in 2016, and while many of us expected the gap between grid-only and PV + battery + grid to widen, this is actually happening faster than we dared to imagine.
The latest figures indicate that consumers in South Australia purchased 20% less electricity from the grid in 2017 as compared to 2010. Picture the same scenario in 2025, the figure will have fallen by at least 20% once again.