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I think this presents an interesting case for permanent "grid defection" in rural areas. The theory goes that as solar panels and battery prices drop, it will

I think this presents an interesting case for permanent "grid defection" in rural areas. The theory goes that as solar panels and battery prices drop, it will eventually make sense for homeowners to produce their own power, and "defect" from the electrical grid completely. Obviously this isn't a perfect solution: for example, the homeowner is now solely responsible for fixing their own power supply issues, instead of the collective "insurance" the grid operator provides by fixing grid issues for customers. I think that rural customers in wildfire prone areas provide one of the best use cases for grid defection. The power company can save money in two ways: by not having to maintain relatively long power lines which serve few customers and by reducing their exposure to liability for wildfire damages. It might even be in the utilities interest to subsidize rural customers defection, to focus on more urban customers. Grid defection relies on low-cost solar and batter technology, and I think we will have both in the next decade. This is something that was not even possible in years past: extending the grid to rural areas was a great example of government sponsored economic equity that market forces alone may not have provided. Two things that would help aid the transition: (1) Holding grid operators liable for wildfire risk (or at least part of it) and (2) forcing rural customers to pay a greater price for their power, reflective of the greater cost to provide it. I know (2) won't be popular but I think it does align some economic incentives correctly. I would also advocate implementing price increases only when solar+battery is very close to grid parity, so customers actually have a reasonable choice.

magnetic 7y ago
> The theory goes that as solar panels and battery prices drop, it will eventually make sense for homeowners to produce their own power, and "defect" from the electrical grid completely. I think it already makes sense in California (given the amount of sun we get). A Tesla solar install of 8 kW solar production + 2 PowerWalls (27 kWh capacity) has a loan payment of $188/month, which is probably lower than what your cost would be from the utility company for an equivalent "level of service". The only tricky part is to figure out the answers to "what size panels + storage do I need so that, given elements (weather mostly), the probability of my storage being depleted any point during the day is less than X%". Solar companies probably already know the answer to this given the data they already have, but the other part of the equation is changes to the owner's consumption (buying an EV? new child on the way? changing your range/dryer/heaters from gas to electric? etc) That's the real pain point (it can be mitigated with a generator, but that gets complicated), which leads to a certain amount of oversizing, and as a consequence, waste (since you can't feed it back to the grid). Also the occasional failure in your own infrastructure could lead to blackouts that could be more frequent than if you were tied to the grid (Mean Time To Repair is higher with your own infrastructure for obvious reasons), although I have to admit that the grid hasn't been very good in that respect. A solar system is generally maintenance free, but failures do happen. Still, I think it's worth it (that's why I took the plunge a few years ago).
- Taek 7y ago
  You can do a lot cheaper than a PowerWall. But you can also depend heavily on propane if you are off grid. You can get propane based central heating, propane stove tops, propane refrigerators, propane freezers. Going to propane also helps with the overbuilding, because that's more or less pay-as-you-go instead of having to build a finite supply all at once.
- torpfactory 7y ago
  It will almost certainly be necessary to significantly overprovision both panels and batteries in order to avoid running out of power or needing to add more later. Hopefully the cost decreases will reduce the financial headache of this... time will tell. I think there is an unrealized business model out there where a company builds, installs, and then maintains (incl. emergency fixes) solar+battery installs for a monthly fee, just like what you pay to the electric utility today. Such a business would hopefully achieve some cost savings by buying parts in bulk and be able to quickly fix issues by using similar system designs. It would be a bit like the electric utility, but they wouldn't own any grid or power plants.
- tomohawk 7y ago
  What's the term of the load in your calculation? A PowerWall has a 10 year lifespan, where they guarantee that batteries will have 70% capacity or better during that time. I take this to mean you'll need to size for a 30% capacity drop, and plan for battery replacement in 10 years. Does your loan factor in installation costs, which can be significant? Since the goal is to reduce the chance of fire, what would the probability of starting a fire be with thousands of powerwalls installed all over the place be in comparison?
  - magnetic 7y ago
    > What's the term of the load in your calculation? What do you mean by that? The amount you can draw from the power walls? This page has a chart with specs that cover this: https://www.solarquotes.com.au/blog/tesla-powerwall-2/ https://www.solarquotes.com.au/blog/tesla-powerwall-2/ I think each powerwall can draw 5 kW continuous and 7 kW peak. > A PowerWall has a 10 year lifespan, where they guarantee that batteries will have 70% capacity or better during that time. I take this to mean you'll need to size for a 30% capacity drop, and plan for battery replacement in 10 years. Well, it has a 10 year warranty, not life span. Yes, for sure there will be some degradation with time (although for my car, a Model S, I'm surprised that after close to 5 years and 25K miles I barely "lost" 1% of range). It depends on how you draw and charge. > Does your loan factor in installation costs, which can be significant? I believe it does, and also includes the rebates/credits. But you can answer those questions yourself by going to their website and doing a "pretend order" - that'll give you a bunch of knobs to play with and see the various options between buy cash vs loan. > Since the goal is to reduce the chance of fire, what would the probability of starting a fire be with thousands of powerwalls installed all over the place be in comparison? Well, the goal isn't just to reduce the chance of fire: it's also to offer availability at reasonable cost. Some will also like the "independence" aspect of it, like "stick it to the man" - but that isn't particularly important to me. But back to your probability question, I frankly have no idea. I imagine we'll learn it from deployments, like we are learning about "spontaneous fires" that have been happening with electrical cars. It's certainly a tradeoff, but one of the interesting things about this technology is that a hot environment is generally the time when you can produce good energy with the panels, which you can use to cool the infrastructure that needs cooling (batteries for example). That being said, there is no 100% safe system. We're dealing with Kilowatts of power moving across a bunch of lines, so we have to be humble and realize we can't control everything to a zero risk environment. What we can do, however, is measure, learn, and get it safer iteration after iteration.
froindt 7y ago
The tricky thing with paying for grid defections would be holdouts. If a group of 8 neighbors take a payout to leave, but #9 doesn't, suddenly the utility lost most of its revenue but maintains most of the same infrastructure. And the holdout might need really reliable electricity for medical devices or similar. I wonder what "fair" mechanism could be employed to handle things optimally?
- torpfactory 7y ago
  I feel like there should be a business model where the customer pays a monthly fee for service but the service is "install and maintain solar + battery". As long as it is a similar price to grid connection, basically just force all users who would be defecting onto the new business model. I think customers would protest a lot less in that circumstance. As for medical devices and whatnot: the grid is already not 100% reliable. The replacement would need to be of comparable reliability, but I don't think the threshold is 100% reliable. If you've got medical devices critical to your continued existence, you need more redundancy than either the grid or solar+battery. I don't see is a particularly fair model for stuff like this. Just a bunch of bad or worse options. Honestly I think once cost parity is achieved, a lot of these questions will evaporate.
ip26 7y ago
There is plenty of precedent- see urban piped natural gas vs rural trucked propane.

magnetic 7y ago

> The theory goes that as solar panels and battery prices drop, it will eventually make sense for homeowners to produce their own power, and "defect" from the electrical grid completely. I think it already makes sense in California (given the amount of sun we get). A Tesla solar install of 8 kW solar production + 2 PowerWalls (27 kWh capacity) has a loan payment of $188/month, which is probably lower than what your cost would be from the utility company for an equivalent "level of service". The only tricky part is to figure out the answers to "what size panels + storage do I need so that, given elements (weather mostly), the probability of my storage being depleted any point during the day is less than X%". Solar companies probably already know the answer to this given the data they already have, but the other part of the equation is changes to the owner's consumption (buying an EV? new child on the way? changing your range/dryer/heaters from gas to electric? etc) That's the real pain point (it can be mitigated with a generator, but that gets complicated), which leads to a certain amount of oversizing, and as a consequence, waste (since you can't feed it back to the grid). Also the occasional failure in your own infrastructure could lead to blackouts that could be more frequent than if you were tied to the grid (Mean Time To Repair is higher with your own infrastructure for obvious reasons), although I have to admit that the grid hasn't been very good in that respect. A solar system is generally maintenance free, but failures do happen. Still, I think it's worth it (that's why I took the plunge a few years ago).

Taek 7y ago
You can do a lot cheaper than a PowerWall. But you can also depend heavily on propane if you are off grid. You can get propane based central heating, propane stove tops, propane refrigerators, propane freezers. Going to propane also helps with the overbuilding, because that's more or less pay-as-you-go instead of having to build a finite supply all at once.
torpfactory 7y ago
It will almost certainly be necessary to significantly overprovision both panels and batteries in order to avoid running out of power or needing to add more later. Hopefully the cost decreases will reduce the financial headache of this... time will tell. I think there is an unrealized business model out there where a company builds, installs, and then maintains (incl. emergency fixes) solar+battery installs for a monthly fee, just like what you pay to the electric utility today. Such a business would hopefully achieve some cost savings by buying parts in bulk and be able to quickly fix issues by using similar system designs. It would be a bit like the electric utility, but they wouldn't own any grid or power plants.
tomohawk 7y ago
What's the term of the load in your calculation? A PowerWall has a 10 year lifespan, where they guarantee that batteries will have 70% capacity or better during that time. I take this to mean you'll need to size for a 30% capacity drop, and plan for battery replacement in 10 years. Does your loan factor in installation costs, which can be significant? Since the goal is to reduce the chance of fire, what would the probability of starting a fire be with thousands of powerwalls installed all over the place be in comparison?
- magnetic 7y ago
  > What's the term of the load in your calculation? What do you mean by that? The amount you can draw from the power walls? This page has a chart with specs that cover this: https://www.solarquotes.com.au/blog/tesla-powerwall-2/ https://www.solarquotes.com.au/blog/tesla-powerwall-2/ I think each powerwall can draw 5 kW continuous and 7 kW peak. > A PowerWall has a 10 year lifespan, where they guarantee that batteries will have 70% capacity or better during that time. I take this to mean you'll need to size for a 30% capacity drop, and plan for battery replacement in 10 years. Well, it has a 10 year warranty, not life span. Yes, for sure there will be some degradation with time (although for my car, a Model S, I'm surprised that after close to 5 years and 25K miles I barely "lost" 1% of range). It depends on how you draw and charge. > Does your loan factor in installation costs, which can be significant? I believe it does, and also includes the rebates/credits. But you can answer those questions yourself by going to their website and doing a "pretend order" - that'll give you a bunch of knobs to play with and see the various options between buy cash vs loan. > Since the goal is to reduce the chance of fire, what would the probability of starting a fire be with thousands of powerwalls installed all over the place be in comparison? Well, the goal isn't just to reduce the chance of fire: it's also to offer availability at reasonable cost. Some will also like the "independence" aspect of it, like "stick it to the man" - but that isn't particularly important to me. But back to your probability question, I frankly have no idea. I imagine we'll learn it from deployments, like we are learning about "spontaneous fires" that have been happening with electrical cars. It's certainly a tradeoff, but one of the interesting things about this technology is that a hot environment is generally the time when you can produce good energy with the panels, which you can use to cool the infrastructure that needs cooling (batteries for example). That being said, there is no 100% safe system. We're dealing with Kilowatts of power moving across a bunch of lines, so we have to be humble and realize we can't control everything to a zero risk environment. What we can do, however, is measure, learn, and get it safer iteration after iteration.

froindt 7y ago

The tricky thing with paying for grid defections would be holdouts. If a group of 8 neighbors take a payout to leave, but #9 doesn't, suddenly the utility lost most of its revenue but maintains most of the same infrastructure. And the holdout might need really reliable electricity for medical devices or similar. I wonder what "fair" mechanism could be employed to handle things optimally?

torpfactory 7y ago
I feel like there should be a business model where the customer pays a monthly fee for service but the service is "install and maintain solar + battery". As long as it is a similar price to grid connection, basically just force all users who would be defecting onto the new business model. I think customers would protest a lot less in that circumstance. As for medical devices and whatnot: the grid is already not 100% reliable. The replacement would need to be of comparable reliability, but I don't think the threshold is 100% reliable. If you've got medical devices critical to your continued existence, you need more redundancy than either the grid or solar+battery. I don't see is a particularly fair model for stuff like this. Just a bunch of bad or worse options. Honestly I think once cost parity is achieved, a lot of these questions will evaporate.

ip26 7y ago

There is plenty of precedent- see urban piped natural gas vs rural trucked propane.