In this article we compare the two on the basis of six aspects: certainty of energy supply, installation cost, management, depreciation of the system, cost of energy over the calendar year, and the cultural aspect.
Certainty of energy supply
Which of the two systems gives us more guarantees in this respect? Put like that, the question may seem trivial: but think about what happens when we are left without energy. The fridge does not work, the microwave does not work, electric hobs in the kitchen do not work, and we can no longer charge our beloved mobile phones or our laptops.
Our desktop computers stop working without power, and so does our router, so we can no longer connect to the internet. Our software, which is probably connected remotely to the office, and the VoIP telephone will no longer work, so goodbye to connectivity and goodbye to smart working. We will no longer watch television, the boiler probably will not work either, so there will be no hot water or heating. Finally, our light bulbs will no longer work.
The seriousness of the event will obviously depend on the length of the ‘downtime’. A few minutes is tolerable, one or two hours is uncomfortable, a day or several days is a real disaster.
If this dire event occurs with an on-grid installation, it can mean only two things: you have not paid your bill, or the operator has cut off the power because of a fault of its own. The situation is the same as without photovoltaics, since the system is always connected to the grid, so if our system is faulty we will continue to receive energy from the operator.
In the off-grid system there is no safety net if the photovoltaic system stops: once the battery is empty, we are in the dark. To avoid downtime, backup or redundant systems would be needed, exactly as in the IT world. A double battery, panels laid out so that if one breaks the others keep working, albeit at reduced capacity. A double inverter, and so on. As a last resort, all that remains is the ‘old’ fossil-fuel generator.
A redundant installation goes beyond the classic residential scheme of photovoltaic panels, inverter, home and battery, because it has a significant impact on both purchase and running costs. In short, it is not within everyone’s reach. For this reason, unless you have no spending limits, on this point the on-grid system wins, in our view.
Installation cost
The basic elements are practically the same: panels, inverter, connections, structures. The fundamental difference is the battery, which is present in off-grid systems. Batteries have fallen drastically in price over the last 10 years. Even so, a 5 kW battery, which might be insufficient for a very energy-hungry property, could cost on average between 5,000 and 6,500 euros. We are of course talking about sufficiently reliable units. So, in this case too, the on-grid system ‘wins’.
Management
An old maxim of Henry Ford’s, referring to car equipment, went more or less like this: ‘what isn’t there can’t break’. Clearly, a more complex system such as the off-grid one, which includes a battery, usually lithium, needs more attention. So, from a management point of view too, albeit by a small margin, on-grid wins for us.
Depreciation of the system
What do we mean by ‘depreciation’? It is a term we often come across in the financial management of our lives, from cars to houses, furniture, mortgages and so on. It is generally associated with a cost that brings a benefit in the long term. Let us take an example. Suppose that this summer I decide to treat myself to a major holiday. I will spend 5,000 euros in 15 days. This cost of 5,000 euros brings a benefit during those 15 days and then stops. It is therefore a cost that I will charge to that year.
If instead I buy a fridge and spend 1,000 euros, I can assume that it will keep my food cold for the next 10 years, so I will benefit for all that time. It would be wrong to charge that cost to a single year. So I will divide the cost over the 10 years of benefit: 100 euros a year. This is the depreciation charge.
Similarly, if I install a solar system, I assume that it will produce energy for 20 years, so I will divide the cost by 20. The system that costs more will have a higher depreciation charge for the year. The one that costs less will have a lower charge. Here too the on-grid system wins, as it costs less.
Cost of energy over the calendar year
Unfortunately, on this point there is no absolute, unequivocal answer, because it is the result of a calculation made over a certain period. In the current period we have no values that last over time, so we set out some rules so that you can calculate it yourselves, on the basis of the figures you have available.
In the on-grid system, the annual cost is determined by:
depreciation charge + annual running cost + cost of the energy paid to the operator (the third cost can take various forms and depends on the contract you have with the operator) minus any credits owed by the operator.
The last item mentioned was found especially in the early days of photovoltaic installations: for example, in net-metering contracts, where the operator paid more for the current than it charged the user. The current trend is reversed: the operator usually pays users less for the current fed into the grid than its selling price.
In the off-grid system, the annual cost is determined by:
depreciation charge + running cost. Being disconnected (off) from the national grid, you have nothing to do with the operator. An easy calculation.
It would therefore seem more convenient. If we reason without the depreciation charge and the running cost, there is no doubt that the cost of energy produced off grid is lower. In an ideal world it would in fact cost nothing. But there is an annual running cost and a depreciation charge, as with on grid.
In an off-grid installation the main element is the battery. In theory, over 20 years a 6,000-euro battery would account for 300 euros a year. But that is not the case. Batteries potentially have a lifespan measured in cycles, from 6,000 to 10,000 charge cycles. In terms of years, we could assume 10. So over 20 years it is reasonable to assume the batteries will be replaced at least twice, with a considerable increase in costs. On the other hand, we have said that battery prices have fallen a great deal in 10 years: at production level, by as much as 8 to 10 times.
So how much will the same battery cost in 10 years’ time? It is hard to say, probably less. But it is hard to say whether we have reached the minimum value or whether new technologies will improve performance at higher costs. So, considering that so many elements are evolving very fast, both batteries and the cost of energy (just think what electricity cost from the operator in February 2023), it could be settled with a Solomonic DRAW. With a tendency to reserve judgement until we have a more stable situation.
Cultural aspect
Choices are not made on cold numbers alone, as we know well. If they were, mobile phones costing over 1,000 euros would be unsellable. Yet they sell very well. Why?
Marketing scholars know this well. Reward systems based on the dopamine activation cycle have long been an effective sales strategy, both offline and online.
But what does this have to do with photovoltaic systems? The point is: would you like to produce your own electricity in a totally independent way without receiving any more bills, perhaps even becoming an expert in all or part of the technology yourself? Most of us would certainly say yes, at least to the bill. With off-grid systems this is possible. Producing your own energy for personal use could have a deeper meaning, a bit like growing vegetables or raising animals.
Anyone with a vegetable garden knows well that the tomato ended up costing more than at the supermarket. But that is not the point. Someone who produces their own energy might over time take an interest in improvements to their system (safely, we urge), in how it works, join communities, share ingenious ideas, ask questions. In this way they take an active part in the development of sustainability and are repaid with personal satisfaction. It is a paradigm shift in which cents do not count.
Conclusion
So who wins in the end? Producing energy with an on-grid photovoltaic system is in fact a variation on classic supply: the relationship with your operator and with the meter remains. It is a mature, well-tested system that can deliver good economic results, depending essentially on the contract with the operator.
Producing energy with an off-grid system is perhaps more revolutionary because it could be a paradigm shift. If you use this technology you must be aware that if the power goes out there is no freephone number to call. You can call the technicians who installed the system, but you should be able to understand, at least at a preventive stage, what is happening and take the planned emergency action. This requires a greater understanding of how the system works. But here there may also be fun, research and creation. On the other hand, if you are not interested in the technical aspects, you can still delegate the monitoring to third parties.
We leave you with a suggestion. If you are interested in off grid but are a little worried because you think you will not be able to manage your energy production in complete safety, stay ‘connected’ to the national operator. You can use it as a backup until you feel confident enough to manage the system on your own.
Are you interested in starting to produce energy right away but not ready to revolutionise your home?
The question at this point is: how could one start producing energy without investing too much money in off-grid energy production?
We went to the portal where everything can be found (Amazon) to see whether we could buy a ready-made system. We picked a product that looked interesting for understanding how it works, at a price that, all things considered, is not exorbitant. The system includes the photovoltaic panel and the Bluetti unit, which has a battery and an inverter built in to produce AC current. The connections are simple. Be careful! This is not a residential unit for producing energy at home, in the way we described above in this same article. But the off-grid logic is the same. This system produces energy from the sun through the photovoltaic panel, stores it in the battery and then gives it back to us as both direct and alternating current. Once the battery has been charged for 3–6 hours, all you need to do is plug in whatever you want to power. There are several sockets, both for 230 V alternating current and for 12 V direct current. This system could come in handy as a backup unit, for charging batteries for power tools, for example for gardening, or phones and computers; it can run small pumps, including submersible ones, and it can also produce energy when we travel in our beloved camper or in our equipped off-roader.
