Paying for your own solar power?
In my previous post I mentioned that depending on how your solar and battery energy storage system is installed, you may end up paying for the excess power (energy) that your system generates. Before delving into how this could happen, I think it is important to first understand the fundamentals of New Zealand’s ripple control system, and how energy is metered in your home.
This is a multi-part series. Be sure to follow the “smart home” tag for more posts on this topic.
What is Ripple Control?
New Zealand’s ripple control system is a tool for managing electricity demand. Electricity Distribution Businesses (EDBs) – one of whom I presently work for – can use the ripple control system to turn consumers’ electric hot water systems off during times of peak electricity demand, and back on again shortly thereafter.
The Ripple Control System consists of a transmitter and receiver in its most basic form. The transmitter injects a ripple signal into the electricity distribution network, and this signal is carried across those poles and wires that supply New Zealand homes with electricity. In reality, transmitters are big ripple injection plants installed inside sub-stations dotted all over the country.
Receivers on the other hand are small devices connected to the electricity distribution network and actively listening for injected ripple signals. Upon receiving a signal, each receiver will take some kind of action. In the case of a hot water ripple control relay – a small device installed inside your meter box – the relay will either turn off the supply of electricity to your hot water cylinder or turn it on again.
Page 6 of the EECA report on New Zealand Ripple Control describes this system in more detail, an extract of which is shown in the image below.
Overview of NZ Ripple Control System
Energy metering with Ripple Control
By allowing EBDs to switch on and off their hot water cylinder, consumers are providing a service to EDBs. As such, it is only fair that consumers be fairly compensated for this service. The way this is facilitated is through the use of two different electricity tariffs (i.e. two different charges for your electricity consumption).
If you have a modern electricity meter installed in your home, this meter is likley to have two metering “elements” inside of it:
- One metering element measures the energy consumed by your home appliances and lighting. This element is usually called the “24-Hour” element, as the power flowing through it is usually on/available 24 hours a day.
- The second metering element measures the energy consumed by your hot water cylinder. This element is usually called the “Controlled” element, as your EDB can turn this circuit on and off using a reply control relay.
There was once a reasonable incentive to make use of the ripple control system. Any power consumed through the Controlled meter was charged at a much cheaper rate when compared to the power consumed through the “24 Hour” meter. This is no longer the case. Most modern electricity retailers either offer no incentive, or a rate that is only 1-2 cents per kWh cheaper.
How might you end up paying for your own generation
This scenario is best described with the aid of images…
The vast majority of residential solar and/or battery systems will be connected to the 24-Hour bus within your home’s electricity distribution board. Being connected to this bus, any excess energy made by your solar system will first supply your home appliances/lights, and the remainder will be exported to “The Grid” through your 24-Hour meter.
For each kWh of energy you export through the 24-Hour meter, your electricity retailer may credit your account. In my case, I’m paid 9 cents for every kWh that is exported through the 24-Hour meter.
The trouble comes when your hot water cylinder needs to run (because the water within is cold). Your HW cylinder will turn on and begin consuming energy from The Grid. It will consume this energy through the Controlled meter and ripple control relay. If you follow the flow of energy from your solar/battery system, your excess solar energy will:
- Flow up through your distribution board bus and be exported through the 24-Hour meter. Your electricity retailer account will be credited 9c/kWh at this point.
- This energy will now flow across the small piece of copper wire that constitutes “The Grid”. A piece of wire usually within the meter itself - your energy never flows across the acutal “Grid”.
- The energy will now flow down through your Controlled meter where you will ‘import’ this energy into your home. At this point your electricty retailer account will be debited 25c/kWh.
- Having passed through the Controlled meter and ripply control relay, your excess solar energy will be consumed by the heating element inside your hot water cylinder.
In this scenario you have paid the equivalent of 16 cents per kWh for your own solar energy!
There are some caveats, one of which is if the sun is not shining, and your battery is drained. In this scenario, your HW cylinder will consume power from the Grid at (potentially) a slightly cheaper tariff. However, most incentives to use the ripple control system are gone, or are greatly diminished. Is not uncommon to either be charged the same (higher) rate for energy consumed through both the 24-Hour and Controlled meters, or some electricity retailers might offer a slight incentive, typically in the order of 1-2 cents per kWh. In either case, it’s likely to be costing you more money overall.
How do you resolve this?
If you have an electric hot water cylinder, and you are getting a solar and/or battery energy storage system installed in your home, then start by having a conversation with your electrician. When your electrician installs your new solar system, take the time to make sure that they will re-wire your HW cylinder onto your 24-Hour bus alongside your solar system (after having checked that your home wiring can handle this).
Having seen an installation where they were paying for their own excess solar generation (to heat their hot water), I suspect many electricians aren’t necessarily thinking about these things… the responsibility lies with you!