GLSP5 Residential Off-grid Part 1

GLSP5.1 Arguments Against the Grid

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Most of my project work in Mississippi is off-grid residential.  It’s not like that in most of the solar industry. In many states, you have solar arrays that do not have batteries which is like installing an incomplete system. That has some benefits because the grid is used as a battery but also some detriments because you need the buy-in from the grid and grid policy in order to install systems like that. Whereas solar becoming more mainstream may gets less subsidized and incentived. So you might start seeing some cost being put back onto battery-less solar and you might end up in a market where interconnected solar is no longer cost effective. With solar plus batteries you get out of that policy discussion such as net-metering, discriminatory fees, and even 100% sustainability and move towards issues such as improved reliability and design optimization.

Many of my off-grid projects are new construction although not all are remote locations. When the installation far into the property line, the customer can avoid the cost of grid expansion. But right now I’m working on a site right on the side of the road, with the utility coming in and digging a 60′ trench to the point of interconnection for underground wiring up to the house, all for $300 (the general contractor provided the trench).

That’s why the interconnection was so cheap – because it was on the side of the road of an electric cooperative, a monopoly, as they’re required by law to service every house in a territory and usually pay the majority of the cost of side-of-the-road interconnections. But once you start moving away from the road, beyond say 500 feet the coop is much more likely to charge in the real cost of trenching and cabling, which can really start to add up.

In my current project, the client wants a low electric bill and the ability to run the house without grid power. We’re actually under-sizing the off-grid system, but in the event of a natural disaster like a hurricane or tornado, whose recovery times are substantially greater on a rural cooperative grid rather than on a city grid, the client will be running 100% off-grid, simply by conserving their electricity. The grid is only connected to the house through the battery input, as an AC charger, rather than the inverter output, meaning the output of the inverter has no physical interconnection to the grid. In this case, a solar interconnection would harm the client financially, because system outflow is only purchased for 2.5 cents per kwh and comes with discriminatory interconnection fees. So the house is off-grid in the sense that it is 100% powered by the battery inverter which is physically separated from the grid, but the grid can also charge the battery if the solar array is not providing enough power. Because the inverter is only 12kW (with a 36kW 20 second “burst”), we also installed a manual transfer switch such that the homeowner can physically switch to “100% grid only” when hosting the extended family for a holiday weekend (in order to use the full 48kW service rating as 240V x 200A = 48kW). We are also using our own energy control system to manage the household power demand.

My first off-grid house was an $80,000 project, where the power company was going to charge the client over twenty thousand dollars just to bring the power out to the property. The homeowner said he’d rather just spend that money on batteries and do his own thing instead.

I recently did a small cabin in the middle o the woods with a $25k budget. It was a smaller system but the interconnection would have been sixteen thousand dollars so when you’re building into the interior of the property (again, typically 500 feet or more)  that cost of grid expansion alone can be the driver of going offgrid. It’s a good one – perhaps the best reason to go off grid.

I did some research on what grid expansion costs. Underground wiring is not cheap although if you use aluminum is much cheaper.  Copper costs about five times as much per foot as aluminum cable.

You might find a piece of choice property out in the wilderness where the lack of utilities on-site keeps the property value cheap. Call it the hippie retirement plan to but some dirt cheap pristine property out in the middle of nowhere and stay off the grid. But there’s reasons to go offgrid beyond the cost of grid expansion and it really has to do with how electric rates are trending.

Research the history of the electric grid and you’ll find that when the grid was first being built out in New York City they didn’t really know what the business model would be. One thought was the electricity would be free and money would be made off selling the appliances. Of course it settled on being billed by the meter, but the right to metered electricity may not be as firmly established as you might think. Rather the right to metered electricity has been assumed, in that the public utility commission looks at residential customers and assumes they are unintelligent regarding their electric bill. People don’t understand electricity or how it works and so utility commissions encourage simple rate structures and that’s not necessarily the same thing as a metered rate structure.

Here we have various rate structures where the fixed meter fee is over fifty dollars a month. Here’s a mountaintop for that cabin in the middle of the woods that is low use or occassional use, well the power company says if we provide you with service, your minimum bill will be fifty dollars per month. RV parks can function in a similar fashion. If the RV is just going to sit there and not use much electricity the power company is still going to charge a $50 meter fee. Seasonal use electric hook-ups like an ice-fishing cabin in the Great Lakes might only have service for a few months and so the fixed fee climbs higher. Sometimes high fees are applied to larger homes with larger electric services that are more like power fed into commercial three phase properties.

I recently did an analysis for a lead where he has one commercial building subdivided into five units and each one of those units has a meter, and because of a special electric heating rate structure combined with a hurricane recover fee and sales taxes, the lead is paying nearly $70 per meter just in fixed charges – even for a unit that is essentially sitting vacant. So the lead is paying $70 per month on very lower energy use unit which could be a vacant unit, an energy efficient unit, or a solar powered unit as well.  In the event of the solar unit, you could use a lot of energy but it’s being offset by the solar array, with little power coming in from the grid, such that the fixed meter fees become a higher percentage of the bill.

Additionally, I looked at not special rate structures like we just looked at, but residential customers with regular electric service from the power company, and asked what is the highest plain jane residential meter fees in the United States and the results were surprising.

I thought it would be in California or New York City – places that have sky high electricity prices but actually you look at this list and these are places you would not typically associate with high electricity prices. I don’t really think about Indiana as having high electricity prices but what really stands out is these are all electric cooperatives. Coops get a little wiggle room and freedom in setting their rate structures and so they say we operate the grid and we’re gonna have a rate structure that guarantees us enough revenue rate to operate the grid. These are rural ares and so they have very few customers per mile of power line. In Mississippi there is at least one that has fewer than five customers per mile of power line, so grid distribution costs can be high even when the average cost of electricity is low due to access to cheap electricity. Virginia may be getting cheap coal from West Virginia. Illinois and Indiana may be getting cheap wind power from Iowa and so the energy charges may be low but the distribution costs can still be high.

Where is effectively trending in the future is a residential rate structure that is more like a cell phone contract, where you know your bill will be $100 a month or $150 a month provided you stay within certain usage parameters. Let say your bill is $100 per month provided you only use 1000 kilowatt hours and then if you go over that your bill might go up by $10 for every 100 kilowatt hour block. You might get a $300 per month plan for unlimited usage, so long as your power draw doesn’t exceed a certain amperage. In these cases the fixed fees go up and the value of electricity is no longer directly associated with a one-to-one relationship such as 11 cents per kilowatt hour such as we see today.  Utilities have realized that if I’m in a net-metered state where I have to pay my customers retail value for their solar outflowed eletricity, the trick is to keep the metered rate the same and jack up the fixed fees, in order to water down the revenue loss caused by net-metering.

So what I see is a trend towards increasing fixed fees while keeping the metered rate stable. That’s profound in that a lot of solar customers and businesses models project a 2-3% escalator in electricity pricing year-over-year. The worst offenders I’ve seen have been online sales companies modeling 7% rate escalators which is simply untrue. But even if your electric bill is increasing 3% per year that doesn’t mean the metered rate is increasing – it could remain flat while the fixed fees increase such that solar customers even in net-metered states could not get the value out of their solar arrays that they get today.  In other words, the utility has more than one card to play in the net metering debate.

Of course in Mississippi we don’t have net metering. We actually passed a net-metering law that basically shook out to say that we don’t have net-metering. The federal government  doesn’t regulate the same price of electricity, leaving it to the states. If I had to spin Mississippi’s net-metering policy in a positive light, it would all come back to the fact that Mississippi is a rural state full of rural electric cooperatives, and perhaps Mississippi is the worst off because we were the very first state in the country to have an electric cooperative and so now we have 34 different electric cooperatives set up like small independent school districts which would be more cost-effective if there was some consolidation, so what benefited us for being first out of the gate a hundred years ago is now resulting in these smaller cooperatives which simply do not have the customer basis to provide better consumer-owned solar policy, which is ironic as the cooperatives were founded with the mission to bring power out to rural areas and point-of-use solar is the best way to do that.

There’s a lot more to that debate for another time in place but the way it shakes out when you don’t have net metering, and many states are trying to roll back net metering and even if you are in a net-metering state you may be on an electric cooperative that may not be required to provide net metering, in other words, there are an increasing number of electric customers without net-metering than with it (particularly as net-metering was inherent to old school analog electric meters which are commonly replaced as part of solar interconnection!) such that you may want to develop a strategy for solar for those non-net-metering customers.

The average retail value of electricity average in the u.s. Is around 12 cents per kilowatt hour, and although that is about what I pay for my electricity, only roughly 9 cents of that is associated with my metered kwh fee, and any outflow I send onto the grid is bought back at roughly 3 cents. Solar only works for about 1/3rd of the day, so if you want to generate enough to offset 100% of your electric use,  that that inherently implies that 2/3rds of your solar production will need to be stored or outflowed onto the grid, with only 1/3rd of your 100% solar offset being used on-site at the time it is being generated. But if my outflow rate is 25% that of retail (three verses twelve cents) and even my inflow rate is only 75% of my bill (9 cents which raises to 12 cents only after including fixed fees), to fully eliminate my electric bill via outflow credits being purchased at 3 cents per kilowatt hour, I would have to offset my electricity consumption between 300-400% (which is typically not allowed by the public utility commission).

Even if you are not looking to fully eliminate your bill, without net-metering, simply looking at the 3 cent outflow rate compared to the 12 cent retail rate, it becomes apparent that the outflow is hardly worth anything such that the lack of net-metering can destroy the value of grid-connected consumer-owed solar. And even if you said okay well in summertime you have high electric use and wintertime you don’t have as much outflow due to lower production, well in springtime you are still going to be producing a ton of outflow because you don’t have heavy heating or cooling loads. So even a small solar array can produce outflow.

So even if you you say,  “Okay I will add a battery such that I will store the electricity in the battery instead” that doesn’t really work for a couple of reasons. For one, the power company could simply increase the fixed fees and mess around with the metered rate as we discussed above. But the concept of day trading electricity with a battery doesn’t work for residential rate structures, even when you have a time-of-day rate which is higher during peak times and lower during off-peak times, because it costs money to run the battery! You can calculate how much it is to run the battery by calculating the upfront cost divided by the total amount of kwh you get out of the battery’s useful life (in other words, its warranty period) which I call the “levelized cost of storage”. On the low end for the cheapest batteries, the levelized cost of storage comes out to be 7-8 cents per kilowatt hour. Lithium batteries tend to start at 15 cents per kilowatt hour and go up from there. So even if you had a time-of-use rate that had an 8 cent differential between peak and off-peak, you would simply be spinning your wheels when it comes to cost-effectiveness. In my case, I am faced with selling the electricity to the power company at three cents or storing it in a battery at nine cents, for a difference of 6 cents, and a cost of storage adding 8 cents to the process. So I would actually lose money by storing the energy in a battery instead of selling it to the grid for 3 cents. Generally speaking the value of storage needs to be double the cost of storage before you start making any money off the battery, such that you can get your payback halfway through your useful battery life. If we’re talking about a 25 year system, most potential customers want to see a payback of under ten years although some will do twelve and a half. But all the power company needs to do is keep the peak vs. offpeak time-of-use rates close enough together to make day-trading residential electricity less cost-effective.

That gets confusing because for commercial customers it can be a very different calculation. Many commercial electric bills are not based on kilowatt hours but instead on their maximum 30 minute power demand from the grid, which could be charged $10 per kilowatt instead of $0.10 per kilowatt hour. If you graph out kilowatts vs. hours, residential customers are billed for the area under the curve, whereas commercial customers are billed for the maximum height of the curve. With commercial batteries, the cost to cycle the battery could be $0,15-$0.30 per kwh such as with a high end lithium ion battery, but it would be saving the customer $10 during that time, due to how they are billed for their electricity, tracing back to that $10/kW demand charge. Whereas a residential battery is used every day, a commercial battery may only be used a few days per month to shave off the very tip of the peak electrical demand of the facility. So the cost to run the battery is very important for residential and less important for commercial.

So the residential customer can get stuck with rate structures that are simply not good enough for solar or solar and batteries, with the only grid-connected option being to install a spiteful system which slightly increases the customer cost but lowers their electric bill as much as possible. Which some customers do, especially on monopoly grids  when they realize the power company has rigged the rate structure against the solar residential customer. Even though the project might not really pencil out, the customer wants solar and some battery back-up capability and so pays more for those items. But that’s not really a fun market segment to be in and won’t get us to a 100% renewable electric grid.  

The solar outflow problem is also not solved by doing a small array, not only because of seasonal differences, but also because of economies-of-scale. Solar really wants a “pallet” sized project. I have really good solar pricing because I make my customers buy by the pallet. The designs are not customized down to fitting an exact number of solar panels on the roof, although aesthetics are considered when planning the array layout. Aesthetics are very important to me – more than the brand name of the solar panel itself. But when talking about pricing and system sizing,  I usually give my customers the option of a one, two, or three pallet solar system. Which typically comes out to be a seven , fifteen, or twentyone kilowatt system. For example I recently turned on a 15 kilowatt solar array which was two pallets of solar panels, whereas that small cabin in the woods was a one pallet solar array. The first off-grid project I did was oversized, and it was a three pallet solar array.

If I don’t do one pallet of solar, doing say three kilowatts instead of a full seven, not only does the cost of the solar panel itself get more expensive, but also by the time you get to the rooftop, it doesn’t take doesn’t take that much more time to install 24 solar panels instead of 12. But there is a minimum amount of money the installer needs to make off a project, so essentially when you start getting into projects that are less than a pallet of solar panels, the installation price really starts to kick up a notch. And you can’t have high installation pricing and get a good system payback. Yet the largest the system gets, the more you run into the outflow problem which has its own diminishing returns depending on your grid policy.

Taking a closer look at economies of scale, you could get this 3kW SolarEdge inverter, a leading company in the USA, for  $1000 or you could get this 10 kW SolarEdge inverter, 3 1/3rd times as much power, for only $24000 or roughly 2.5 times the cost. So you really want to get into larger inverters and more panels to drive down that “dollar per watt” installation price.

So let’s forget batteries for a moment and just focus on solar only. You might get a quite for a 5kW array at $4/W or a 20kW array for $2/W. 5 kW at $4/W is a $20k project, whereas the 20kW array at $2/W is a forty thousand dollar project. Not as many people can afford the $40k project but those who can end up getting much more bang for their buck.

So what I’m saying is solar does like economies of of scale and larger projects, but residential customers then get into the outflow issue that is hard to design around.

I’m kind of getting back to to that business with five small units we were talking about earlier, where some of the unites weren’t using any electricity but still had big fixed fees. Mississippi likes to say it has national average pricing for electricity but getting into this lead’s rate structure,  the property owner was paying 40% above the state average simply because the building had a high fixed fee and low electric use. So there are progressive rate structures which get more expensive with higher electric use, or regressive rate structures which get less expensive with increased consumption. But even a flat rate structure where there are no tiers for different amounts of usage become regressive if the customer also has high fixed fees.

Let’s take a large house in Mississippi as an example. Assuming the house uses two thousand kilowatt hours of electricity per month,  so I’m really cranking the AC, I might have electric heating, I might have two hot water tanks 12 cents a kilowatt-hour, I’m looking at twenty dollars a month before my fixed fee and 240 dollars a month for my metered rate. My total bill comes out to 216 and I go and divide by two thousand kilowatt hours to get to thirteen cents a kilowatt hour effectively. I just wanted to illustrate that if you’re if a typical home using 2,000 kilowatt hours a month verses a thousand kilowatt hours a month you pay that fixed fee less on less metered energy.

If you’re really sipping your electricity at 500 kwh per month, and there’s really two types of rooms do this: ones that don’t use very much electricity like one of my solar customers, a fixed income retirees that didn’t turn on the air conditioner until they went to sleep, with a window unit and only air conditioning their bedroom space so grandma and grandpa on a fixed income really sipoing their electricity. They pay that fixed fee but their energy use is so low that they’re effectively paying sixteen cents a kilowatt hour effectively.  A different, happier user would pay more and use more, but solar effectively does the same thing to the bill because the client may be consuming a few thousand kilowatt hours per month but maybe only 500 kilowatt hours is left over and all of a sudden you’re effective rate per kilowatt hour really skyrockets.

The only way to get rid of that is to get rid of fixed fees which means getting rid of the meter entirely.

You know,  connecting to the grid can be kind of a hassle. There’s the interconnection process and with that may come additional fees put onto , not just upfront but also monthly. In Mississippi they charge both upfront for the meter that which as we said earlier gives the solar owner not even net-metering,  whereas the old school analog meter which is often being replaced would have inherently net-metering built in as it would spin backward.

I’ve adjusted for this in my practice. What I’m doing now on a project is having a solar array, the house, and the grid, and I’ve put a battery in between the home and the grid with a grid input charger, but it’s a one-way inverter that does not flow out onto the grid.  Unlike most inverters, it’s a one way inverter and is not interconnected onto the grid. There’s no 5 minute wait period, when you turn the power button on, it is on.

As you recall, in Mississippi it is not worth it to be interconnected to the grid. This is a problem that is not going to get better, if anything it will get worse. When there’s not a lot of people doing solar we can have friendly grid policies but when we’re talking about 50% or greater solar, the existing power industry stakeholders who own the infrastructure already existing in place won’t voluntarily go bankrupt because they can’t pay off their existing power plants which are now being rendered obsolete. So they’re not going to be friendly towards solar, or at least, consumer-owned solar even when, or particularly if they are membered-owned rural cooperatives!  Generally the existing stakeholders are more involved with lawmaking than the new kids on the block.

Let’s just take the Tennessee Valley Authority, the irony being that the TVA was established to bring electricity out themost rural of areas in the USA, and solar is point-of-use generation, but the TVA has actually come out and said they’re going to to punish solar owners in the name of fairness, as they don’t want solar owners to increase costs on non-participants – a statement made matter-of-fact but without supporting evidence. The TVA, a public entity, will then write private utility scale power purchase agreements for solar a higher rate than what they will buyback from the general public, which technically owns the TVA and are members of member-owned “cooperatives whom instead charge solar discriminatory monthly fees. And they state this blatantly on page one of their 2018 rate change policy report. So the TVA is failing its solar homeowners, and certainly can’t be expected to improve its position. What is more likely is that other power companies will subscribe to the TVA model, even if it discourages what might be the optimally cost-effective climate change policy we could enact as a country.

The worst offender in my neck of the woods for grid-tied solar array adds $15 a month to the bill and while they are required by federal law to interconnect the solar array, that law called PURPA only requires the buyback at an avoided cost rate. Avoided cost can be defined as little as the cost that the power company buys the raw material from power plant at, before it is refined into electricity, less an administrative fee, which in this case is being called a “wheeling fee”.

This company uses a 2.5 cent avoided cost rate, plus a slight adder, which is then reduced by the administrative fee. Then they add a solar discriminatory meter fee of $15 per month. Now, you go and do the math and look at what solar produces on an annual basis, multiplied by the buyback rate minus the wheeling charge, and then you consider the added $15 a month charge. The point is that at a the avoided cost buyback rate, you would have to install four kilowatts of solar, which would add $8k-$12k to the project cost, just to overcome the added cost of the monthly meter fee. Which is also subject to sales tax although residential electricity sales in Mississippi are exempted from sales tax. Which is particularly a shame is that Coastal Electric is literally on the coast, in one of the most hurricane prone regions in the United States, so people generating power at point-of-use has clear reliability and health, safety, welfare benefits. But that’s how their policy shakes out.

That brings us to the next argument which is that solar is often attacked for being  unreliable and that’s not a good label for solar. Solar is intermittent in that it is sometimes on and sometimes off but we all know that the Sun rises every day reliably. A tornado may take out the entire electric grid but the sun also rises. Katrina took out parts of Mississippi’s rural grid for over a month. Generating electricity by solar onsite plus batteries is way more reliable than the grid, yet solar is attacked for being unreliable.

To better frame this argument, I would refer you to the debate regarding underground versus overhead power lines.  While underground can take longer to fix when there is a failure, it is far less likely to fail, and so the general consensus is that underground wiring is more reliable than overhead and it comes down to a matter of cost-effectiveness. Keep in mind that in rural areas, the grid goes down much more frequently than in cities, a problem which increases the further outside the city you go.

I have an audience question. How do you calculate the levelized cost of storage for the Tesla PowerWall? So let me just say that this residential off-grid course promotes industrial flooded lead acid as the battery choice. Lithium ion batteries are very popular, particularly on the west and northeast coast where the price of electricity is more expensive. But let’s take the Tesla Powerwall and assume it costs $10,000 installed and that’s being generous on installation pricing. It’s warranted for thirty seven thousand eight hundred kilowatt hours which is twenty six cents a kilowatt hour, well even if you back in the thirty percent tax credit that’s still eighteen cents a kilowatt hour and so for energy arbitrage (buying low and selling high), assuming you have a time-of-use rate structure,  all the utility has to do is keep that differential to be less than eighteen cents a kwh such that day-trading electricity with your lithium-ion battery bank to be not the value that you may think it is, in that you may not come out ahead.

Then again, New Jersey has had a very generous solar subsidy, but Hurricane Sandy hits and wipes out the electric grid and all of a sudden all these solar arrays are offline because the grid is out. A safety provision for grid connected generators forces the generator to turn off, because they don’t want you back feeding the grid when they’re trying to fix it.

Electrical linemen rightly belittle dangerous customers who plug portable generators into the wall to “power up” there home during a grid outage. This kind of improper grid connection can backfeed downed power lines and electrocute those tasked with bringing the grid back online. Instead, the arrays are designed to turn off, so imagine you are the owner of a thirty thousand dollar solar array, and a hurricane hits, and you lose the ability to generate power.

What you want is the ability to keep your house turned on during a blackout right?  But disappointingly, most grid-tied battery inverters only protect a dedicated panel, often with a limited power output that is substantially less than the full inverter power rating. So there is a dedicated critical load panel that is not powering the entire home. For example, here is the 7.6kW Solaredge battery inverter but it’s critical load panel is only rated for two kilowatts of power rather than 7.6kW. So it is not powerful enough to run your central air conditioning. Maybe in off-grid mode you can only keep your refridgerator and deep freeze running.

There are alternatives, but the manufacturers don’t want you using their systems to be creative with your solutions. Instead of powering just a critical load panel, what we want is the system to power pretty much all of the house. At least in the southern United States, really the number one thing I don’t want to lose power to is the air conditioner. You could consider a manual transfer switch, rerouting the critical load panel output from the battery inverter to a breaker the same way a smaller generator is tied into a service panel, landing at the top of the busbar via a “grid interlock switch”. This is essentially a plate that is fixed in place so only the main breaker or the generator switch can be in the on position, rather than both being on at the same time. You can see these little slots in this plate which can be re-arranged so that if the main breaker is off, the generator switch is on.

So why not take that critical load panel output but instead of landing it on a dedicated subpanel, go ahead and land it on the generator interlock switch so that during an outage you can flip the manual switch and feed your whole house with 2 kilowatts of power. It would be less power than you are used to and you would have to manage that. But the manufacturers don’t want you do do that. What they want is for you to stay an a more fool-proof mode of instantaneous transfer and operation, because you have to design your system such that you avoid backfeeding your own inverter – and it gets more complicated when you add in parallel additional inverters or generators. But we will be expanding on the concept that there are other ways to go with your design beyond what the manufacturer is telling you you can do with the system, so long as you stay within the confines of National Electric Code and other safety codes. But the most popular lithium ion solutions on the market, such as the Tesla PowerWall, SolarEdge, or Enphase batteries will only give you a limited amount of power for your house despite using the most expensive battery, because  you only have a small battery and they want to make sure you have a good user experience with it. So similar to the Iphone vs. Droid, the capability of the system may be intentionally limited to make sure you do not accidently draw more power from the inverter than it is capable of supplying, as well as provide instant transfer, with the big limitation being that it is not powering your entire house during a blackout.

To put it in contect, SMA makes a critical load panel that comes off the side of the inverter that provides 2kW of power without any batteries, during the day only. I think its an interesting feature as some power is better than no power. But other installers think its a gimmick and they have a point. When I look at battery inverters, say compared the SolarEdge standard 7.6kW without any battery capability, the battery inverter costs a good 25-30% more just for the limited functionality we’ve discussed. We’re talking over a thousand dollars more to upgrade to that battery inverter that only provides a small amount of power during a blackout.

So what we’re saying is there is a difference between today’s residential lithium-ion battery and battery inverters, compared to traditional off-grid lead acid options, in that lead acid is typically built around low voltage and high amperage whereas lithium ion batteries are focused on high voltage and low amperage, and while volts and amps do multiply together to produce power (watts), and while you can do a low voltage lithium ion configuration or even a higher voltage lead acid configuration, and while theoretically it’s better to operate at high voltage and lower amperage to optimize the value of your cabling system (because amperage has more to do with cross-sectional area of the cable than voltage, so lower amperage and higher voltage typically results in smaller cable thickness), even with all the technical advantages of higher voltage lithium ion solutions the problem in today’s market is that lead acid is still more cost-effective for off-grid living, and many higher voltage lithium ion solutions are not designed for running your whole house off-grid.

In fact the most cost-effective lead acid batteries on the market are forklift batteries which are very high amperage and lower voltage and so if you want to use a cost effective battery, which is a good thought as they are the most expensive system component,  you will find them to be incompatible with many of the popular battery inverters designed for grid connection (SolarEdge, Enphase) whom are simply ignoring lead acid in anticipation of the not-so-distant future where lithium ion displaces lead acid entirely.

But it’s not today, and at least for my customer base in Mississippi dealing with lower priced electricity markets. You’ll find that residential lithium ion makes a more compelling argument in higher priced electricity markets, such as the northeast coast or California. There’s less to worry about terms of maintenance with lithium but here in Mississippi we are all about cost effectiveness and we just can’t get there with lithium ion at this time.

But it is confusing as we want to use forklift batteries which are not compatible with many grid-tied battery inverters, which are designed to lower your electric bill but remain grid-connected, which is not necessarily cost-effective for residential but can be very cost-effective for commercial, because commercial businesses are billed differently than residential, and so what is good for the business customer with grid-tied batteries may not lower your bill for a residential customer, and regardless, the grid-tied batteries are more oriented for protecting critical loads rather than supplying the whole building with backup power. Add back in the limitations the manufacturers put in to keep you within their brand-driven ecosystem, and grid policy which will forever compete with those who simply want to pay the bare minimum on their electrical upkeep, the offgrid residential customer may find their dollar goes further if they go off-grid entirely, rather than seek a half-measure.

The grade is not as reliable as a well-designed off grid array, because the grid loses power in a way that is out of the client’s control, whereas a well-designed off-grid array should not lose power, and should have back-up provisions in place when and if it does. On thing the grid gets that off-grid does not is long-term, subsidized energy financing although private 20 year loans are starting to come to market which can be applied to batteries as well as the solar array they are intended to finance. Personally, I think grid monopolies are missing out on an opportunity as they have access to long-term, low interest financing and could be taking the most faulty, remote branches of the territory off-grid in the name of reliability and safety. Whereas in many cases the same customers would get better solar offers, absent any subsidies or mandates, on deregulated markets where there is competition (for example, Houston TX where there is no net-metering law you get more for your outflow than most customers in Mississippi).

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