A common question when considering installing a solar or battery storage system is ‘How do we accurately size the most appropriate solar system?’ For us at Spinifex Energy this is a purely an economic question which we answer exploring these three things:
- The current energy use profile revealing the average daily or annual energy consumption;
- What our clients’ end goal is and their expectations on return on investment; and
- How can we optimise the size of a solar system (with accompanying battery storage for those interested in batteries) to best suit their goals while aiming to expectations.
Case study time!!!
Current Energy Use Profile / Annual Consumption
Let’s look at a rural motel with the following metrics:
- An estimated annual energy consumption of 140,000 kilowatt hours (kWh), or 380 kWh per day;
- A load profile showing energy peaking after daylight hours (usually when guests first arrive and turn the A/C on. See image below);
- A cumulative electricity bill of approximately $60,000.00 per annum on a ‘Large Customer’ retailer tariff (classified by consumption of more than 100,000 kWh per annum). The breakdown of the line items in the bill comprise $0.15 per kWh and accompanying Demand and Supply charges; and
- A client open to recommendations to find the best possible solution.
Sizing the System
The energy use profile suggests the property is using approximately 45% of energy during daylight hours and 55% during the night, or 171 kWh and 209 kWh respectively (solar modelling software allows Spinifex Energy to accurately model actual energy profiles). The image above illustrates a five day cross-section of the energy profile of the property.
Back of the envelope system sizing for this property would suggest that if we divide the daily energy usage (171 kWh) by the average daily production of a 1 kW solar system, (4.2 in most parts of Queensland) we arrive at the size of a solar system (in Kilowatts) that would produce the required amount of energy for the property’s needs. From this equation we arrive at a 40 kW solar system.
The Savings Estimates
From a back of the envelope perspective if we take the estimated daily solar production from a 40 kW system (circa 171 kWh) and multiply this by what the client is currently paying for electricity ($0.15/kWh) we can see they can expect to save around $25 per day or $9,000 per annum.
The above estimates are making a number of assumptions which will drastically affect the outcome of the system. These are:
- 100% of the energy produced by the solar system is consumed by the property with nil energy wasted or exported back to the grid;
- There is no reduction in Demand Charges on the estimated annual savings; and
- The daily energy consumption is constant every day of the year, through all seasons.
Improving Accuracy in System Sizing
We believe it is imperative to utilise modelling software to accurately predict a clients’ energy use profile to confidently provide solar system sizing recommendations. The image below illustrates an overlay of a solar system output over the same week in March shown above. It shows that whilst it may in fact produce 171 kWh per day, given the shape of the production curve is peaking at around 12:30 pm, less than 100% of energy produced will be consumed by the property.
How much energy a site can export needs to be analysed on a case by case basis. If this site was granted ‘full export’ (meaning it can export energy at the same rate as the system size can produce) then it would be exporting approximately 21% of all energy produced on an average day (36 kWh per day). If their retailer was offering a feed-in tariff of $0.10 / kWh, then this customers’ actual daily savings would look more like the following:
- 79% (135 kWh) of solar system production consumed, saving them $0.15 / kWh ~ $20 per day;
- 21% (36 kWh) of solar system production exported, saving them $0.10 / kWh ~ $3.60 per day;
- TOTAL SAVINGS: $20.60 per day or ~$8,600 per annum.
It can be seen how using rough figures can quite quickly increase an estimated payback period for a system or drastically reduce expected returns.
Relationship between System Size, Export and Savings Goals
So now we know what an estimated system size might look like and what we can expect the export for that site to be. Now we need the secret sauce to know how far to push the system size, what export we may be happy with, and how to make a good sizing decision to produce optimum savings.
There are a multitude of variables to consider in these scenarios:
- What is the best Feed-in Tariff rate I can achieve (this will affect what % of export you should be happy with);
- What system size can my roof support (this can be the deciding factor in many cases); and
- What rebates am I entitled to, based on the system size, and how will this affect my decision (this will require another post entirely).
Let’s look at the above case study again to see whether it may be worthwhile increasing your expected export of energy to extremes. For this, we will increase the system size to approximately 80 kW. This image illustrates the system would export more than half of the total energy production.
Whilst this may seem high there are situations where an elevated export may be beneficial to investment returns. To understand this point we need to dig deeper and look at what increasing the system size has done to the annual grid energy consumption post solar installation. If you remember this site was consuming approximately 140,000 kWh of grid energy per annum. An 80 kW solar system in Queensland may produce an estimated 122,000 kWh of energy per year. If the property self-consumes 45% of this energy, they will then be consuming 55,000 kWh from the solar system and the balance (140,000 – 55,000 = 85,000 kWh) from the grid. We now have a situation where the client is eligible for a tariff conversion from a Large Customer (consuming more than 100,000 kWh per annum) to a Small customer (consuming less than 100,000 kWh per annum). Through this conversion they may be eligible to remove all Demand Charges from their bills and only be charged for the kWh they consume at the standard grid rate per kWh. Most Large energy users will know that Demand Charges can make up around 60% of their electricity bills. By reducing their tariff we can eradicate these Demand Charges completely in some cases!
A post solar estimate on electricity expenses with a tariff change suggest this site may receive more than a 50% discount from the pre-solar electricity spend!
We all know there has been some rambling happening above, which always happens when you get passionate people talking about their industry trying to word it in a manner that makes sense… To recap:
- It is important to know what your goals are prior to installing a solar system. These may be to 100% eradicate your bills, install enough solar to allow for battery storage to be added later, or just to install an appropriately sized solar system to provide an attractive return on investment;
- It is important to choose a company that adequately explains the whole process including how they reach their estimates on system size, expected returns and the chosen equipment to be used;
- Oversizing a system causing higher rates of export energy is not necessarily a bad thing, so ask your solar advisor what options you should be considering when installing a solar system.
As usual, we are here to help. If you have any queries on this article or would like an energy audit or some advice on how solar can assist with your business please don’t hesitate to contact.