By Maura Forrest
August 28, 2014
Imagine getting up in the morning, unplugging your electric vehicle from your home battery, and driving to work. While you’re working, your home battery is being charged by rooftop solar panels. When you get home, you turn on lights and cook dinner using power stored in the battery.
Sound too good to be true? If you live in Europe, this could be your life in less than 10 years, according to a new report from investment bank UBS.
The report estimates that in 2020, buying an electric car, home battery technology, and a rooftop solar system with a 20-year lifespan could pay itself off in energy savings after just six to eight years.
That means an investor “should receive 12 years of electricity for free,” according to the authors.
The report suggests the combination of the three technologies is crucial. UBS estimates that by 2025, electric vehicles (EVs) and plug-in hybrids will account for 10 per cent of Europe’s car market.
But the bank predicts that battery costs will drop by at least 50 per cent by 2020, which should boost EV sales. Cheaper batteries should also lead to “exponential growth in demand for stationary batteries to store excess power.”
And rooftop solar in combination with a home battery could provide a stable source of electricity for many households, reducing their dependence on grid electricity to a bare minimum. The report goes so far as to suggest that “large-scale power stations could be on a path to extinction.”
“We would be bold enough to say that most of those plants retiring in the future will not be replaced,” the authors wrote.
The report focuses on Germany, Spain, and Italy, due to their high electricity and fuel costs. But what about North America? How far are we from decentralised, small-scale, renewable power production?
A 2013 Deutsche Bank report found that 10 U.S. states have reached grid parity—the point at which renewable energy is no more expensive than conventional forms of power production. Those include California, Arizona, Hawaii, and Vermont.
But in Canada, a number of hurdles stand in the way.
Canadians pay three times less than Germans for their electricity and about two times less for gasoline, and the majority of the country’s electricity comes from hydro power.
Moreover, most provinces have Crown corporations that control the electricity market. Initiatives to have these Crown corporations pay for electricity supplied by small-scale providers, like Ontario’s feed-in tariff program and B.C.’s independent power production, have met with considerable opposition.
Without such incentives, it may be difficult to encourage homeowners to invest in rooftop solar and batteries.
But new developments in batteries and EVs from outside Canada, like Tesla’s gigafactory, could spur demand for small-scale electricity production within the country. Ultimately, they could turn people away from big companies and toward their own homes as a source of power.