Higher power prices driving a “ditch the grid” mentality

With more than half the cost of rising electricity bills due to network and distribution costs through poles and wires, more Australians are looking to solar energy and an alternative to grid connection.

Based on Treasury estimates, some 51% of the cost of electricity is from network and distribution costs, 20% from actual power cost, 15% from account management, 9% from the carbon price and 5% from government costs.

While Australia ranks 11th in the world on a per capita use of solar energy, it could be moving up the ranks as households in 2011 installed more rooftop solar than in Germany, the world’s solar leader.

These statistics are showing that, at a time when power companies are said to be “gold plating” the network from over investing in the poles and wires of the electricity grid, more Australians are taking up the solar alternative.

According to CBD Solar Manager Jeff Bye, more people are looking for answers around how to “ditch the grid” entirely, which could be achieved through a combination of solar power and energy storage.

“If people install solar panels and battery storage, they only need the grid as a backup supply,” Bye said.

“Improvements in technology, being driven by the auto industry, are leading to more efficient and effective battery storage which works well with what can be intermittent production of electricity from solar power.”

According to CBD Solar, the average cost of energy is now between 20 and 30 cents a kilowatt hour, reaching 43 cents at peak. By comparison, solar energy is costing between 5 and 7 cents a kilowatt hour to produce, with this level applicable over the lifetime of a solar system of around 25 years.

Contrary to the direction of electricity prices, the cost of batteries and solar panels is decreasing as new technology and lower materials cost is leading to cheaper and more effective energy solutions.

Bye has recently installed a solar system in his family home along with battery backup. His roof now has 18 solar panels producing an average of 16 kWh per day, which virtually matches total daily consumption of the house, with the batteries storing solar power generated during the day for re-use on demand at any time.

Bye said the plan with his solar system and batteries was to receive a quarterly bill recording zero kWh consumption, with the only payment being for a network access charge of about 50 cents a day. He added that the system will pay for itself in five years, after which point he will receive free electricity in spite of the carbon tax and other costs.