Does off-grid make sense?

Some places, like the one pictured, are obvious candidates for having and off-grid power supply.  But does it make sense as an option for all homes?


Richard Keech

Sentiment and Motivations

Sometimes I hear people express the desire to take their house off the electricity grid.  The motives behind this are usually either:

  • environmental, i.e. the view that disconnecting for the grid will help with the push to eliminate fossil-fuel-based energy sources; or
  • resilience, i.e. the view that the grid they experience is, or will likely be, too unreliable/non-existent; or
  • frustration related to a the perceived unfairness of the grid controlled by big corporate interest.

Those other grids

This post is about the electricity grid.  Most homes are also connected to the gas grid too.  My other posts on this blog make it clear that I’m all for wholesale disconnection from the gas grid as a practical and necessary reality, ASAP.


Where it makes sense


For those that are in remote locations with no existing grid, or an unreliable grid, planning for an off-grid home with solar and batteries makes perfect sense.


The shrinking grid

The grid is large and complicated.  A disproportionate amount of the grid cost goes to supporting customers at the fringes.  I think that smart energy storage will cause the edges of the grid to shrink.  Some edge-of-grid customers may find that the grid company can support them, or their township, better by providing community solar and battery systems, than supporting very long and unreliable distribution feeder lines.  When this happens, it will be driven by the grid companies themselves because it will let them provide reliable power at lower cost.


Do we get a raw deal on exported energy?

A commonly cited reason for frustration is the perception that we should be paid a lot more for our surplus solar energy through better feed-in tariffs.  There’s a view that, because your neighbour is paying, say, 25 cents/kWh to buy energy,  you should be paid a similar rate to sell your surplus energy.   Another expression of this frustration is the idea that, at low rates of feed-in tariff, your solar panels can’t pay for themselves.

The short answer is that home owners are actually on a good deal with the currently mandated feed-in tariffs, and they more than cover the cost of the energy generated.  I’ll cover this more in another blog.


The grid as a common good

For those of us in built-up areas with reliable power, the grid is a common good, and the cost of operating it is shared between all customers.  If people here disconnect, the cost is borne by fewer people.  People exiting will be relatively well-off, and leave the cost of supporting the grid to fewer, less-well-off people.  This is a classic death-spiral scenario with dire consequences.


The grid as a sharing system

Traditionally the role of the grid has been strictly a supply system.  However, with more people producing large amounts of energy from PV on their roof, the role of the grid shifts. For those that export surplus solar energy, the grid serves as an energy sharing system.  It’s a reality of solar power, that to have enough for yourself, you’ll generally have more than you need a lot of the time. It makes no sense to waste that energy.  So the grid gives you a way gainfully using that surplus that benefits your neighbours who, perhaps, don’t have solar power.


Scaling an off-grid system

For a home to be viable as an off-grid system, even with batteries, it needs to produce enough to completely cover usage during the worst-case couple of days.  For homes in southern Australia, this is in the middle of winter when solar generation can be low.  So scaling an off-grid system means either:

  • having a system of batteries and solar panels that can produce much more energy than you need nearly all the time, and therefore wasting that foregone generation; or
  • having a backup petrol/diesel generator to support a smaller system of batteries and solar panels.


Batteries are a net consumer

Another thing to bear in mind about batteries is that they increase net consumption because they’re not 100% efficient.  If a battery pack, for example, holds 10kWh, and has a round-trip efficiency of 90%, then one kWh is lost for every 10 kWh put into the system.  If a home puts 10,000Wh through their battery pack in a year then that’s 1000kWh lost in the battery.  That’s a non-trivial amount of energy, and foregone export.



For those of us connected to the local grid, we can have reasonable confidence that if a tree takes down the powerline in the street, we can sit tight and let the electricity company fix it.  And we know that we won’t get a bill for the repair.  However, those who are off-grid have to wear the non-trivial expense of repair and maintenance themselves.


Batteries don’t necessarily mean off-grid

Having battery systems and staying on the grid is a good thing.  It lets us soak up the energy in the middle of the day when it’s abundant, and use it in the evening during our daily peak demand.  This is called load shifting.  It is a benefit to the grid and to the battery owner.  Then, when solar generation is low in winter, the grid supply helps us out.  In summer, we may have more solar than our home and batteries can take.  Again the grid can help by soaking up our surplus once again.


Shared batteries make sense today

There are other value streams that can be unlocked when we scale up grid-connected batteries.   There are companies already setup to help small- and medium-sized energy consumers link up their batteries so that they can serve the grid more effectively.  An orchestrated arrangement of many small batteries is called a virtual power plant (VPP).  Companies like Reposit Power, Mondo, and SwitchDIN can help customers get more value from their batteries.  I’ll cover this in a separate blog post.


Conclusion. To go off-grid?

With these factors in mind, I think it makes absolutely no sense for someone in a built-up area to take their home off the grid.  The existing solar feed-in tariffs are reasonable in helping give a return on surplus solar. The up-front cost of exiting is too high.  The social cost of exiting is too high.  Environmental goals are well supported by getting lots of solar on our rooftops, and sharing our surplus.

If you want to get a battery, by all means do.  But it will cost much much less, and still be very useful, if you stay grid-connected.

If you do get a grid-connected battery, I suggest you get one that permits membership of a virtual power plant (VPP) to amplify the benefit that can come from energy storage in the grid.