Off-grid, or not?

There are some selfish reasons to leave the electricity grid, and there are very good altruistic, economic and practical reason to stay connected.

Around the time I wrote this page (November 2014) there had been much speculation about the option of going off-grid; that is, installing (usually) solar PV power and batteries and disconnecting from the electricity supply network, the grid.

This page looks into what the outcome is going to be to you, should you go off-grid and it will look into what is likely to happen to the grid, to the nation's greenhouse gas emissions, to conventional power generators and to centralised renewables (such as wind, hydro, and big solar) should many people go off-grid.

The page is necessarily speculative. It is airing ideas more than providing facts and it applies to a country such as Australia, where at the time of writing most of the electricity was generated by burning fossil fuels.

Written 2014/11/11, 2020/12/16
Contact: David K Clarke – ©

Why go off-grid?


Some clarification

If you build a house in the country it can be very expensive to connect to the grid: $20k is not unusual. Setting up a stand-alone power supply is then perfectly understandable.

This page is about leaving a power grid to which one is already connected.

Increasing home solar power means that, on average, people are reducing the amount of power they take from the power grid, while the cost of maintaining the grid remains the same. So the income received by the power companies is reduced. In the other direction the wholesale cost of generating power is decreasing due to cheap wind and solar power entering the grid. If power providers' costs increase they may increase their charges to retail customers to compensate.

When people install solar power they tend to resent paying more for the power they buy than they get for the power they sell to the grid. The fact that the selling price is usually considerably lower than the buying price is mainly due to three things:

  • A large part of the cost of supplying power is in the transmission and distribution network;
  • The companies that run the power transmission and distribution system quite reasonably want to make a profit;
  • You sell your power when you have excess and you buy power when you need it – there are big costs involved in balancing generation with consumption.
If, in addition to installing solar power, they add a home battery it can become feasible to disconnect from the grid.

What will it mean to you, personally?


You can have independence without going off-grid

You can install solar PV (or a wind generator) and batteries and have them as a backup should the grid fail without disconnecting from the grid. It's the best of both worlds; independence and your excess power displaces dirty fossil fuel generated power. Ask a reputable solar power installer about it.
If you go off-grid you will save the connection fee. Apart from the cost of going off-grid – which is high, but coming down all the time – the main disadvantage is that if you do not use exactly as much electricity as you generate (not necessarily at the time you generate it) the remainder will go to waste. You will not be able to sell your excess electricity and no one else will be able to use it. If it did go into the grid it would displace an equal amount of 'dirty' fossil fuel-generated electricity.

How would you feel about it if a decision you made for selfish reasons adversely affected the nation's greenhouse gas production rates?

In recent years the price that home-owners can get for the power they sell into the grid has increased. It used to be about 6-8¢/kWh, more recently it is up to 20¢/kWh. If you go off grid you deny yourself this potential income.

Also, if you go off-grid, you deny yourself the backup power should your home generation fall short or fail for any reason.

An important point to note is that your solar panels will generate about twice as much power in December as they will in June (around latitude 30°, southern Australia), but your power consumption pattern might be quite different. Most people who go off-grid will be relying on solar PV. It is likely that they will want more electricity than they are generating in the winter (short, dull, days) and they will probably generate far more than they need in summer (long, sunny days).


Are steeply angled panels really best for winter?

In my area (Clare, SA) we get little direct sunshine in winter. We have many hours of overcast weather with diffuse light coming from the whole of the sky. In these conditions the panels will be more productive if they are nearly horizontal, so that light from the whole sky can get to them.
To a small extent this can be counteracted by placing the solar panels at a steep angle; this means less electricity is generated in summer and in total for the whole year, but when the winter's sun does shine the panels are facing it and winter generation is maximised. (Or probably maximised – see the box on the right.)

Some calculations

The following is based on figures provided in an article titled "Should I quit the grid?" written by Andrew Reddaway, printed in the magazine ReNew, which is published by the Alternative Technology Association.

Reading 'between the lines' the article suggests that a 4kW solar installation is large enough to generate more power than many households' annual electricity consumption (and I would agree with this; especially for those people who were aware of, and cared about, their energy consumption).


High solar feed-in tariffs, 2018

In at least some Australian states the payment per kilowatt-hour on offer for the excess electricity that a householder feeds into the grid has risen very substantially. For example, on 2018/12/19 Solar Choice was showing that a number of retailers in South Australia were offering 16¢ to 23¢/kWh; up from 6-8¢/kWh a few years earlier.

One of my properties has 6.7 kW of solar panels and exports an average of about 25 kWh/day (9,300 kWh/year) into the grid. At the 20¢/kWh my retailer is offering this is worth $1,850/year to me; a substantial amount.

Mr Reddaway goes on to estimate that to go off the grid a 10kW solar system together with about 65 kWh of battery storage would be required at a total cost of about $55,000; this apparently does not include a back-up diesel generator which would also be needed. The higher capacity solar system is needed to generate sufficient power during winter, when many days will be cloudy and all will be short.

A solar power system in southern Australia can be expected to have a capacity factor of about 18%. This means that a 4kW system will generate about 6300 kWh each year (4 × 0.18 × 24 × 365) and a 10kW system will generate about 15,800 kWh each year (10 × 0.18 × 24 × 365).

So, this off-grid home would generate about 15,800 kWh of power each year, but consume only about 6300 kWh. The difference, 9500 kWh of potential generation, would be wasted. If this house, with its annual consumption of 6300 kWh and 10kW of solar power stayed on the grid, that excess 9500 kWh would be fed into the grid. If the house was to remain on the grid it could displace 9500 kWh of fossil-fuel-generated electricity, reduce the nation's emissions by 5-10 tonnes of carbon dioxide each year (see CO2 released per kWh) and produce an income for the householder of $760/year (if the electricity was sold for $0.08/kWh to an energy retailer such as Diamond Energy).

What effect will the move off-grid have on the nation's greenhouse emissions?


An example

I have a shack with 6.7KW of solar PV installed on its roof. In the first year of operation, I exported 10.2 megawatt-hours of electricity into the power grid from my solar power installation. In Australia where most of our grid electricity is generated by burning coal it has been calculated that the generation of each megawatt-hour of electricity results in the release of about one tonne of carbon dioxide. So, by remaining connected to the grid, my solar power has reduced Australia's greenhouse gas production by about ten tonnes in the first year.
Those who go off-grid will no longer be able to feed renewable electricity into the grid; this electricity, had it gone into the grid, would have displaced some fossil-fuel generated electricity. They will quite probably use a fossil-fuel (petrol or diesel) powered generator to give them power when their PV (or wind or hydro) is not providing enough. Both effects will increase the nation's greenhouse emissions compared to what they would have been if these people stayed on-grid.

If you care about climate change and ocean acidification, don't go off-grid.

Greenough River solar farm, WA
Google Earth image
Google Earth image, 2014/06/17
This solar farm feeds clean power into the grid and that displaces fossil fuel electricity.
Your solar PV can do the same with the power that you don't need – so long as you don't go off-grid.

What will it mean to the power grid if most people exit?

The owners of the 'poles and wires' have huge investment in the high voltage transmission lines and in the many more kilometres of medium and low voltage power lines. They have, as businesses generally expect, received an income on their investment. If many people 'drop out of the system' the income inevitably declines.

The bigger users of power will not be able to go off-grid. At present they get their power at lower prices than the rest of us, so even if they were able to generate enough power from solar PV, and store it sufficiently cheaply, for their needs, they could probably not do it at a profit.

How big will the impact of smaller users going off-grid be to those who run the grid? I am not willing to even guess.

How will the power industry react to the off-grid move?

This is a very difficult question. At present they seem to be reacting to declining demand by increasing their charges, but of course this will encourage more people to install solar or leave the grid. As mentioned above, this trend, feeding on itself, has been called the death spiral of the power networks.

Ironically, at the same time, an increased amount of renewable energy on the grid is forcing wholesale power prices down.

The situation is complicated in a state such as South Australia where the power supply system is split between a number of more-or-less independent businesses; there are the power generators, the company that runs the high voltage long distance transmission lines, the company that runs the medium to low voltage distribution lines, and the power retailers. All will be affected by the off-grid move. Maybe each will react in a different way?

What will it mean to most of our renewables – wind farms, big solar, hydro

Snowtown Wind Farm
Snowtown Wind Farm

In 2014 most of the renewable electricity in Australia is coming from hydro and wind power. Only about half as much is coming from solar as from wind farms.

Plainly, if the grid was to fail, for economic or any other reasons, the hydro stations, big solar stations, and wind farms would become stranded assets. In 2015 this seems unlikely to happen any time soon, both because the bigger consumers of power will probably have to continue to rely on the grid and because there are many smaller consumers who have not installed solar power.