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Smart guide

Storing and selling electricity

Save on electricity costs and make your home more resilient by generating your own.

Save it or sell it

Generating your own electricity can reduce energy costs and ensure security of supply.

For rural properties, it may be the only practical and cost-effective option. For urban properties, 'micro-generation' may also be an attractive option under the right circumstances.

There are several options, ranging from solar, wind and hydro to traditional diesel generators. In almost all circumstances, solar PV will be the most practicable and cost effective of the renewable options.

Why generate your own electricity?

Cost-effectiveness

Electricity is expensive and the price is expected to keep rising. Generating your own electricity may be cheaper in the long run than continuing to use power from the local lines.

For properties in remote areas, connections to the local lines can cost tens of thousands of dollars. Generating your own electricity can work out cheaper. It can also be an option in urban areas. At the moment the set-up costs are relatively high, but they are coming down.

If you are connected to the grid and you generate your own electricity, you may be able to sell any excess back to your power company, albeit at lower buy-back tariffs than the retail rate.

A 2016 Concept Consulting study [PDF 2.7 MB], available on the Concept website, found that for New Zealand, batteries are unlikely to save consumers money based on existing prices but may become attractive in some situations as prices come down over time.

It is difficult to gauge when that will be, but the Sustainable Electricity Association of New Zealand expects battery uptake to increase exponentially as prices continue to reduce. The most important industry to watch for are advances in lithium ion battery technology.

Generating your own electricity looks at options for generating your own power.

Storing and using the electricity

If you're generating your own electricity you can either be connected to the grid (and feed surplus electricity back into it) or be independent (a stand-alone power system). If you have a stand-alone system, you will need to:

  • have batteries to store the energy as it is generated and/or
  • have an additional generating option available to ensure an uninterrupted supply.

If you are grid connected, you will be connected to the local electricity network, and can export excess electricity, as well as using mains electricity as a back-up for your system. Using the grid for storage through a buy-back tariff arrangement with the local lines company will mean that you can save on the cost of having local storage battery banks, but be aware that buy-back tariffs are usually quite low and unpredictable.

Batteries

If you are using batteries, you'll need enough capacity to store electricity for your needs when your generators are not working. This may need to be the equivalent of several days' supply if you rely on intermittent sources of generation, such as wind turbines or solar photovoltaics.

Your batteries will also need to be able to store electricity to meet your peak demand when several appliances are switched on at the same time.

They will need to be deep-cycle batteries. Most batteries, for example those used in vehicles, are damaged if you use up too much of the charge. Deep-cycle ones can survive regular discharge below 50 percent.

Some batteries emit corrosive and flammable gases during the final stages of charging, so they should be installed in a well-ventilated structure, separate from your house if possible.

Batteries will need to be properly installed and maintained to keep them safe and in good condition. Check with your supplier and follow the manufacturer's instructions.

There are a range of battery options:

  • lead acid, saline, lithium-ion and flow batteries are the main kinds. Each has its own characteristics, for maintenance, optimum usage, storage conditions, durability, efficiency and cost.
  • lead acid batteries are the most commonly used for large-scale storage. They require regular maintenance, and may need replacing every 6-8 years. These need to be kept outside of the house because they emit toxic fumes.

Another option is saline (or aqueous hybrid ion) batteries, which are growing in popularity because they don’t emit toxic fumes and are more environmentally friendly to dispose of.

Lithium-ion batteries are also available, and are a cost-effective option for larger storage needs. Lithium-ion batteries can typically deliver more cycles in their lifetime than lead-acid. This makes them a good choice for renewable energy applications. Another important benefit for renewable energy applications is its high charge and discharge efficiencies, which help harvest more energy.

Redox flow batteries are emerging as another storage option. The complexity of flow battery chemistry often requires ancillary equipment such as pumps, sensors, control units and secondary containment vessels. The vanadium electrolyte doesn’t degrade over time, so they can last much longer than other technologies. Developers say the technology has no cycling limitations, and batteries can be charged and discharged completely without impact on their lifespan.

A bank of batteries sufficient for a stand-alone system for one home may cost anywhere from $6,000 to $15,000, depending on how much energy you need to store. To ensure you get a good idea of the actual cost of batteries and to compare battery systems, calculate their lifetime energy savings. This is measured in $/kWh used over the expected lifetime. It accounts for the number of expected cycles the battery is rated for, its efficiency, degradation and the purchase cost of battery. Your battery supplier should be able to calculate this for you.

Naturally, the financial benefit depends a great deal on individual circumstances related to your local utility and solar power options.

Going off-grid on the EECA Energywise website has information on batteries for stand-alone power systems.

What is the best type of battery for solar storage? on the Solar Power World website also has useful information.

Selling to the grid

Your power retailer will sell you power at one price and are likely to buy power from you at a lower price. You'll need a contract with the retailer.

Different suppliers allow different options, so check before you install a system. If you're connected to the grid, you'll have to pay monthly supply charges.

You will also need a control system that prevents power being sent to the grid when the grid is down to ensure the safety of anyone working on the lines.

Note that this document is published by the Ministry of Business, Innovation and Employment Chief Executive as Guidance under Section 175 of the Building Act 2004. This is a guide only and, if used, does not relieve any person of the obligation to consider any matter to which the information relates according to the circumstances of the particular case.