undefined | Better HN

0 pointsvel0city1y ago0 comments

Doing some math on that $10k for an example of lost opportunity costs, today you can get a 10yr CD at 5.5% APY. Over a decade that's a hair over $17k, practically guaranteed return. So, to properly break even you're going to need to not just save $10k worth of electricity, you'll need to save something more like $17k. You'll need to arbitrage at least $141.67/mo on average for that entire 10-year period to break even compared to what you could have had just investing that into pretty safe savings.

Personally, I'd rather toss that $10k into my kids' education funds and sign up for a fixed rate electricity plan. Hopefully that'll be better ROI.

Grid-scale batteries have pretty different economics than some batteries in my garage. Their real-estate cost is probably significantly lower than the cost for halfway decent residential. They're buying a much larger order of batteries, so their per-kWh cost is probably a good bit lower. Also, their installation cost per-kWh is also a good bit cheaper. They're probably completely fine buying/selling purely on open spot markets, meanwhile in the end I'm going to need to run my pool pump and I'm going to want to do dishes and laundry and charge my car and all the other things on some reasonable schedule so I'd like some amount of price protection on whatever time-of-use plan I get (a day of $9/kWh electricity prices will surely wipe out whatever gains you might have made). They're probably able to get cheaper loans than me, so it's easier for them to arrange the big capital investment instead of high interest loans or having to invest existing capital.

I'm not arguing the economics of batteries don't make sense in today's power markets. Far from it, I've been toying with getting into it in North Texas. But buying a few kWh of batteries and putting them in my garage probably isn't going to break even and almost certainly isn't going to make me money.

0 comments

vel0cityOP1y ago

Further thinking about what you'll actually get, it looks like a decent average price per kWh of installed home battery backup is about $1,000/kWh. So if we got $10k of batteries installed, you're looking at 10kWh of energy you can store.

Let's say you're in California, which has a pretty decent swing in energy prices available to the home consumer. You'll see prices swing between $0.27 to $0.65/kWh. You've got a 10kWh battery pack, so you can arbitrage something like $0.38/kWh * 10 kWh = $3.8/day, assuming you get a full charge cycle and ignoring efficiency for simplicity's sake. $114/mo. So assuming you didn't have any loans and you're ignoring opportunity costs on that $10k, your break-even is in ~88 months or ~7.3 years.

After a decade of ~$114/mo, you'll have offset $13,680, assuming you always used a full charge and you experienced no other maintenance costs and bought it cash on hand and that energy prices didn't change and had a perfectly efficient inverter to charge and discharge the batteries and the batteries still had 100% charge capacity the whole time. The 10-year CD, which you could just forget about for a decade, stands at $17,310.

And this is for one of the few markets in the US that really offers that big of a time of use plan other than "free nights and weekends***" (with pages and pages of fine print and other fees) For instance, I just looked at a time of use plan available to me here in North Texas. 9AM-4PM I'm billed at $0.068 for the generation, $0.050029/kWh plus a flat $4.23/mo for delivery. Outside of that window I only pay the delivery cost. But that means I'm only really able to arbitrage $0.68/day with a 10kWh setup. That's 490 months or a hair over forty years to break even.

j / k navigate · click thread line to collapse

0 comments

vel0cityOP1y ago

j / k navigate · click thread line to collapse