Octopus Energy Launch the Tesla Energy Plan

Electricity utility Octopus Energy have teamed up with Tesla to offer the Tesla Energy Plan – a unique electricity specifically for Tesla Powerwall owners.  By allowing Tesla to control the operation of the battery, householders can access both the best import prices available on the market as well as the highest prices for exported electricity.

What are the Tesla Energy Plan Tariffs?

There are two versions of the Tesla Energy Plan, depending on whether you also own a Tesla vehicle.

For households with a Tesla Powerwall, electricity costs 11p/kWh to import, and Octopus will pay you 11p/kWh for your exported electricity.

For households with a Tesla Powerwall and a Tesla vehicle, electricity costs just 8p/kWh.  Octopus pay for exported electricity at 8p/kWh.

There is no daily standing charge on the Tesla Energy tariff.

For comparison, a typical conventional electricity tariff would cost 15p/kWh for imported electricity, plus standing charges.  The amount paid for exported electricity depends on the amount offered by your supplier under the terms of the Smart Export Guarantee (SEG).  The highest rate on the market is 5.5p/kWh, with many suppliers offering much less than this.

 

 Who is eligible for the Tesla Energy Plan?

Several criteria need to be met to sign up for the Tesla Energy Plan.

  • You must be a residential customer – this is not a tariff for commercial sites.
  • You must have solar panels and a Tesla Powerwall2.
  • That’s all you need to qualify for the 11p/kWh tariff.
  • To qualify for the 8p/kWh tariff, you must have solar panels and a Tesla Powerwall2, a Tesla vehicle, and a home EV charger.

 

How do they do this?

Home battery owners typically store electricity generated by their solar panels and use this energy through the evening and night-time.  There is a strong incentive for householders to do this – they are better off not importing electricity at 15p/kWh than exporting it for just 5p/kWh.

This incentivises households to be self-sufficient in their operation.  However, there are wider electricity system benefits from battery storage.  Operating a home battery for the service of the broader system can offer further financial benefits to the householder – and this is what the Tesla Energy Plan does.

The scheme creates value in three different ways:

  • Electricity prices vary on the wholesale market vary, so Octopus can buy the cheapest renewable electricity available and use it to charge up batteries.
  • They can also control when electricity might be discharged from batteries back to the grid, and do this at peak times when providing electricity is most valuable.
  • By aggregating many batteries together nationwide, charging and discharging batteries can also be paid for providing grid services. These services help keep the national and local electricity grids running optimally.  Sevices include helping maintain a precise frequency on the grid or providing a short burst of power in the event of a failure elsewhere on the system.

Tesla control the operation of their fleet of batteries nationwide to behave as if t were one large generator – this is called a Virtual Power Plant (VPP).  Tesla controls the operation of the batteries – when they charge and discharge.  Octopus manages the financial side of this – customer liaison and billing.

By optimising in this way, Octopus can bundle everything together into a very attractive flat-rate tariff.

The real cleverness in the tariff is paying equal amounts for imported and exported electricity.  This ‘net-metering’ approach means there is no financial penalty to the householder no matter what the battery is doing.  Export electricity back to the grid? You get 11p/kWh.  Hold on to your electricity for use later?  You save 11p/kWh from not importing.  This gives Tesla complete flexibility in how they choose to operate the battery, whilst simultaneously providing the householder with a great deal on their bills.  Genius.

 

Is the Tesla Energy Plan a good deal?

Our residential project manager, Neil Russel, has been crunching the numbers on this!  Neil has modelled the expected annual electricity bills from a range of different electricity tariffs to see which ones offer the greatest benefits.

For more background, do check out our guide to electricity tariffs for the renewable home where we take a broad survey of tariffs for green electricity supply, and for integrating with battery storage and electric vehicles.

 

Tesla Energy Plan Modelled Annual Bill

When comparing the annual cost of electricity between the Tesla Energy tariff, Octopus Go and some other tariffs offered by competing companies we get the interesting table below. This simulation assumes an average electricity usage of 3,400 kWh a year in a home with a Powerwall and no Solar PV array.

ctopus Go, Tesla Energy Tariff, EdF, eon,

The Octopus Go tariff is a day/night tariff, offering electricity at 5p/kWh between 00:30 and 4:30 and  14p/kWh at other times.  Export payments would be under the terms of the Smart Export Guarantee.  The cheap night rate that Octopus Go offers allows a significant reduction in bills.  The Powerwall can charge from the lower night rate, to be used later in the day when electricity prices are higher.

The Tesla Energy Plan, even in the instances when the client has no solar, still comes out cheaper than most of the competition.  This is due to the lack of standing charge and a cheap 11p/kWh import tariff.

Octopus Go Tariff vs the Tesla Energy Plan

Octopus is offering two generous tariffs for battery and EV owners in the form of Octopus Go and the Tesla Energy Plan.  But which one provides households with the greatest savings?

The table below compares both tariffs, depending on the amount of electricity consumed and produced in the home. Positives values (blue) represent the financial benefits where the Octopus Go tariff is beneficial.  Negative values (orange) represent the bill savings where the Tesla Energy tariff is a better option.

From this table, we can draw four different scenarios for customers with a Powerwall and solar PV.

  • Zone A – If you produce more than you use – that is to say your house is a net exporter – then you will benefit most from the Tesla Energy Plan due to the 11p/kWh export tariff.
  • Zone B – If you are consuming somewhat more than you produce, then Octopus Go is your best bet. Here the electricity stored in the Tesla Powerwall covers the costlier evening electricity, with remaining import being dominated by the 5p night time tariff on Octopus Go.  This is likely to be the case for most EV drivers.
  • Zone C – If you have both high generation and high load, the Tesla Powerwall does not fully cover the evening load. This means the 11p evening import price on Tesla Energy Tariff is a better deal than the 14p/kWh on Octopus Go.  In this case, a second Powerall would be beneficial, and this would favour Octopus Go again.
  • Zone D – If you consume much more than you generate. Once again, the Tesla Powerwall does not cover the evening load, so the 11p import price on Tesla Energy Tariff is a better deal than the 14p/kWh on Octopus Go.  It has to be said though, such extremes of high use and low generation are pretty unlikely in the real world.

Concluding Thoughts

Choosing the right tariff to optimise the financial benefits you receive from your battery storage or electric vehicle is tricky.  But Octopus appear to have two market-leading tariffs from which to choose.

The Tesla Energy Plan is a significant development for battery storage for the next decade.  It extends the benefit of storage by interacting with the broader electricity system.  When it’s windy, your battery will be soaking up all that renewable power, not just what’s coming from your own roof.  And that will help us get even more renewables onto the electricity grid.  And it’s all possible because of the equal prices paid for imported and exported electricity – which seems a little thing, but it is going to have a huge impact.

Further Reading

Autum, acer leaves, japan

Solar Energy and the Seasons

As a solar engineer, it’s my job to understand the movement of the sun across the sky throughout the year.  However, a technical understanding of solar movement often feels at odds with my appreciation of the world around me.  That confusion comes from our cultural perceptions of the seasons, and their definitions.  So, when exactly do spring, summer, autumn and winter start and end?

Solar Seasons

From a solar perspective, we can look at the movement of the sun across the sky.  We know that at the summer solstice, June 21st , that the sun reaches it’s highest point in the sky, and that our days are longest.  Similarly, at the winter solstice (December 21st), the midday sun is at its lowest point in the sky, and the days are at their shortest.

Midway between the two solstices lie the spring (20th March) and autumn (22nd September) equinoxes.  These dates don’t get as much attention as the solstices, but consider this – on the date of the equinoxes, everywhere on the planet receives exactly 12 hours of daylight.  It doesn’t matter if you’re in Aberdeen or Abu Dhabi, on these days, everyone is equal.

soalr energy, seasonal variation

Solar energy varies from solstice to solstice

These definitions imply that the solstices and equinoxes are the midpoints of the seasons.  It’s always annoyed me when people talk about the summer solstice as the first day of summer – from a solar energy perspective it’s the middle of summer!  Crazy fools!

It’s something our pagan ancestors understood very well.  We know that they understood the passage of the sun across the sky in intricate detail – look how Stonehenge aligns with the summer solstice, and the entrance passageway to Newgrange in Ireland aligns with the winter solstice. The four points between the equinoxes and solstices were marked with festivals, each denoting the beginning of a season.  Beltane (May 1st) marked the start of summer, and Samhain (31st October) the start of winter.  These two, in particular live on in modern times.  May 1st is still celebrated as the start of summer.  In Oxford, for example, 1000’s of revellers gather at dawn to mark the start of summer, with choir singing, morris dancers, bands, and (lets be frank here) the chance to go to the pub at 6am.  Simialrly, Samhain marked the start of winter, and now lives on as Halloween.

Similarly, the start of spring was celebrated on 1st Februray (Imbolc) and the start of autumn (Lughnasadh, or Lammas) on the 1st of August.

And this is where the whole thing falls apart for me.  Really?  Autumn starts on the 1st August?   A week ago we had the hottest day the UK has ever seen, and today it’s meant to be the start of autumn?  Are you kidding me?

Thermal Seasons

The above description of the seasons doesn’t even tally with what we were taught at school.  Back then, I was told:

  • Winter – December, January, February
  • Spring – March, April, May
  • Summer – June, July, August
  • Autumn – September, October, November

So what’s the difference?  It comes about because our perception of the seasons is more about heat than light.  There is a lag between the times of maximum sunlight and the times of maximum heat, as it takes time for the land and oceans to warm up.  This means what we feel (temperature) is out of phase with what we see (sunlight).  If we consider the lag between sunlight and heat to be 1 month, that shifts the solar definition of the seasons in line with what we were taught at school.  If we consider the time lag to be longer at 6.5 weeks, then the crazy fools who say the summer solstice is the start of summer, would actually be correct.

temperature, Seasonal, London

Temperature in London, UK peaks after the summer solstice (from www.yr.no)

What if there aren’t 4 seasons?

Now here’s a thought.  What if there aren’t 4 seasons throughout the year?  In north European climates, the year can actually be divided into 6 seasons of 2 months each.  These are based on ecology – the observed plant and animal behaviours that are seen exclusively in these seasons.  They are defined as:

  • Hibernal (winter) – December and January. Bare trees, freezing cold, and snow.  Stay inside, hot chocolate, .mulled wine and Christmas
  • Prevernal (pre-spring) – February and March. Trees begin to bud, that first bright, clear, cold morning of the year, daffodils.
  • Vernal (spring) – April and May.  Trees come into leaf, cherry blossoms, and planting crops in the veggie patch.
  • Estival (summer): June and July. Hot, hot, hot.  Vegetation in abundance, t-shirts, shorts and flip-flops, and Glastonbury.
  • Serotinal (harvest) – August and September. Leaves begin to turn, crops mature (serotinal literally means ripening). The weather is still warm, barbeques in the back garden, but you might need some candlelight at the end of the evening.
  • Autumnal (autumn) – October and November. Leaves turn colour fully and fall to the ground.  Winter coat comes out, hats and scarves, kicking piles of leaves, and catching your breath on the morning air.

seasons, solar, thermal, prevernal, vernal, Estival, Serotinal, autumnal, hibernal

For me, this seems a much better description of the passing of the year.  The ‘extra’ seasons of pre-spring and harvest capture those time of year perfectly, autumn is reserved for just the period of falling leaves, and brilliantly, winter is only 2 months long.

So, as I write this on 1st August, welcome to the start of Serotinal!   That sounds a bit of a clunky phrase – and it might take a while to catch on!  But it doesn’t sound as weird as autumn starting, when its 25 degrees outside.

So, take a look around, observe your surroundings, and find which one of these three seasonal definitions suits you best.

Further reading