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Researchers at Western University in Canada evaluated 18 case studies in 13 US states and found economic arguments for going off-grid in areas with high solar radiation and high electricity rates. The authors say that economic grid defection and utility death spirals are becoming prominent issues in the United States.
People living in solar-rich U.S. communities may find it more cost-effective to go off-grid and generate electricity using hybrid solar, battery and generator systems, according to new research.
The article, “ The threat of economic grid defection in the US with solar photovoltaic, battery and generator hybrid systems,” published in the November issue of Solar Energy magazine , states that the move away from net metering, coupled with rising grid electricity costs and falling PV and battery costs, have made economic grid defection and the death spiral of electric utilities major problems in the United States.
The researchers, from the Department of Electrical and Computer Engineering at Western University in Canada, used eighteen case studies across thirteen U.S. states and several irradiation zones to evaluate the cost-effectiveness of grid-defecting using hybrid PV, diesel, generator and battery systems.
They found that grid detachment is already economically advantageous in some solar-rich locations with high electricity rates. The results suggest that Honolulu and Kauai in Hawaii and San Diego and San Francisco in California, locations with high solar irradiance and high electricity rates, are examples where grid detachment is economically advantageous.
The paper gives as an example a 12.32 kW off-grid PV system integrated with a 2.5 kW diesel generator, a 31 kWh battery and a 3.71 kW converter in Honolulu, which has a life-cycle cost 33% lower than staying on the grid. It adds that such a system would result in more than $120,000 in avoided costs after an initial cost of about $34,000. An example from San Diego shows that an off-grid hybrid PV system would recoup the initial investment after six years. Massachusetts, Connecticut and New Hampshire are cited as other grid-friendly states.
However, the paper reiterates that in most of the U.S., it is not yet economically advantageous to consider going off-grid because of low electricity rates. Case studies in Sacramento, New Orleans, Seattle, Rutland, Bismarck, Lincoln, El Paso and Anchorage found that installing an off-grid system would be expensive, with a life-cycle cost of $57,970 in Sacramento, $108,663 in New Orleans and $103,778 in Anchorage.
The research paper adds that PV-battery hybrid systems with about 25% diesel generation could make grid defection economically possible in cases where electricity rates are high and there are reasonable solar resources. “These results indicate that regulators should carefully consider the near-term possibility of massive, cost-effective grid defection,” the paper states.
Joshua Pearce, one of the studys researchers, explained in a discussion posted on Western Universitys website that the analysis uses data from a year ago, adding that battery costs have fallen even further since then, increasing the return on investment. "Places that were previously on the edge of economic viability are now clear opportunities to go off-grid," Pearce added.
Pearce said this raises concerns about potential power company death spirals, which occur when customers leave the grid to save money, forcing those who remain to face higher electricity costs, causing even more customers to leave until the power company goes bankrupt.
"If regulators want to avoid utility death spirals, they should consider designing rate structures that encourage solar power producers with backup generators to stay on the grid to avoid mass defection," the study concludes. |
