Sep. 02, 2024
Solar panels are one of the best ways to capture free, clean energy from the sun for yourself. Solar power to the grid can also be used for more savings on your utility bill. However, it is attaching a solar battery bank that gives you real energy independence. Without solar batteries, even a house covered in photovoltaic panels will leave homeowners literally powerless when the grid goes down.
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"Something that people don't consider is that if they're on natural gas and the power goes out in the winter they think their heater is going to work, but most have an electric fan, so if the power goes out you still need something," said Mike Murphy, owner of Utah-based PrepSOS, which sells solar batteries, generators and other emergency preparedness equipment.
Batteries are the key component that ensures your home can always stay lit and warm and that vital pieces of electronics such as medical equipment continue functioning. Depending on where you live, they might be able to save you some extra money by returning energy to the grid at times when it's more valuable.
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All of these benefits come at a cost, and wading through specifications to find the right match for your needs can be a bewildering task. Here's a concise primer on what you need to know before you go shopping for independence in a box.
The simplest way to think of batteries is to imagine that the electricity in your house flows through wires in much the same way as water through plumbing. Batteries fill the role of a storage tank, making electricity readily available when it's needed, just as indoor pressure tanks and water heaters do with water. When batteries are tapped for energy, their reserve of stored electricity is depleted, but in a properly wired system, they can be automatically replenished by "catching" any excess electricity flowing through the system from sources like solar panels or the grid.
Depending on your goals for installing batteries, your system might look a bit different.
1. Connect just to solar panels: Batteries connected only to solar panels will fill when the sun shines and will discharge when you use electricity and the sun is down or behind clouds. It's one option if you are off-grid and away from electrical utilities.
2. Connect to solar panels and to the grid: If you have a solar inverter that can temporarily disconnect you from the grid, you have what's known as a hybrid solar system. In such a system, you can charge your battery with your solar panels or the grid and use the energy stored there in your home or send it back to the grid and save some money via rate arbitrage (if you have time-of-use rates). A hybrid system can also keep your house powered during a power outage.
3. Connect just to the grid: While we wouldn't call them solar batteries, you can install batteries without solar panels at all. They would charge from the grid and would be useful for backup power or for enrolling in a virtual power plant.
The pros and cons of buying a battery largely boil down to savings (and backup power) versus cost.
The extra solar electricity you store in your solar batteries can be used in place of electricity you'd normally have to buy from your utility, or sold back to the grid when it's most valuable. This can save you some money and relieve some pressure on the grid when there's peak demand. (Whether this is a viable money-saving option for you depends on your utility's net metering rules.)
Some companies are starting to allow people to enroll their batteries in virtual power plants, a fleet of batteries, smart thermostats and other household appliances that work together to decrease demand on the grid. Where available, virtual power plants might come with additional perks for the battery owner.
In addition, you'll be able to use your battery bank in the event that the grid goes down due to a failure, natural disaster or even a solar flare. A backup generator can also help keep the power on in an emergency (and charge your batteries), but it requires burning fossil fuels, usually either gas or propane.
Batteries do add considerable expense to your home energy system, but federal tax credits and other incentive programs usually can be applied to the cost of storage.
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Battery Pros Battery ConsCan reduce energy bills Savings vary depending on local utility and net metering rulesGetting cheaper, and eligible for tax credits and incentives ExpensiveStored power for when the grid goes down Large battery banks require significant storage spaceStoring and releasing energy during peak usage hours can reduce stress on the grid Not all utilities encourage or reward this practiceCleaner source of backup power than a generator A generator may be more useful in a major emergencyLatest battery chemistries (like Li-PO4) are exceedingly safe and simple to maintain Some batteries pose health and fire risks and require management and maintenanceIncreased energy independenceThere are several kinds of batteries used in battery backup systems, including lithium-ion and lead-acid batteries. Here's a quick overview.
There are multiple lithium chemistries on the market, including nickel-manganese-cobalt, lithium polymer and lithium iron phosphate. The latest lithium technology comes with less danger of fire than older headlines might lead you to believe. They're capable of a deeper discharge than lead acid batteries (you can use up to 90% of a charge per cycle without inflicting much damage) and are much easier to maintain with a longer lifespan. They're also significantly more expensive and sensitive to temperature. Increasingly, they are becoming standard in residential solar applications.
The basics of this technology are essentially unchanged for over a century. They remain inexpensive and widely available. For solar systems, it's popular to use somewhat more expensive sealed batteries that require less maintenance and eliminate the risk of dealing with a potential acid spill and hydrogen off-gassing. For a while, sealed lead acid seemed to be the future of solar batteries.
However, all lead acid batteries require more careful monitoring of charge levels compared with lithium-ion and can't compete in terms of efficiency, energy and lifespan but are a good and plentiful budget alternative.
Flow batteries (or redox flow batteries) are less common in home systems since they're mainly designed for commercial use. The technology appears promising, and it could become more widely used in residential battery backup systems in the near future.
Nickel-cadmium batteries have a high energy density with double the energy of a lead-acid battery. Nickel-cadmium batteries are very durable, expensive and work well in extreme temperatures making them a good choice for large-scale commercial and industrial projects. Cadmium is toxic and generally not appropriate for residential use.
In general, a solar battery bank can cost between $10,000 to $25,000 for 10 to 25 kilowatt hours of power. (The US Department of Energy says solar batteries can cost anywhere from $12,000 to $22,000.)
That said, it ultimately comes down to your budget and energy needs. A small off-grid solar system with enough battery capacity for the basics (no air conditioning or electric heaters allowed) using a pair of high-capacity flooded lead acid batteries can be had for $500 total. Upgrading to lithium-ion costs $1,300 for a system with comparable capacity.
Adding batteries is a significant expense for any system, but the good news is that nearly a third will come back to you in the form of the 30% federal renewable energy tax credit. Other incentives may also be available from state and local governments, utilities, and even credit unions.
It's best to use a certified solar installer or electrician to install your solar batteries and connect them to your solar array, your home, the grid and an EV charger if you desire. You should expect to spend a few thousand dollars for the labor involved, and there may be additional components like inverters, charge controllers and EV charge stations that can also add hundreds or thousands of dollars in expense.
If you have confidence in your DIY skills and experience with electricity, it is possible to install batteries yourself. Just be sure to check with local regulations, building codes and equipment warranties.
If you go the DIY route, make sure all batteries are the same age (ideally new). Don't mix new batteries with older ones to help make sure they charge evenly.
For all batteries, follow any manufacturers' instructions regarding monitoring the depth of discharge. Generally, for lead acid batteries, this means trying to keep them over half charged as much as possible. Many lithium-ion batteries can safely be taken down to only 10% charge. Flooded lead-acid batteries also need to be topped off with distilled water a few times a year.
A few years after installation, you may notice that your battery backup system doesn't hold a charge as well as it used to. That's because, like other types of batteries, battery backups lose storage capacity over time.
To account for this, battery backups include a warranty that expresses how efficient the battery should be by the end of the warranty period. Many of the top solar batteries offer 10 years and 70%, meaning that by the end of the 10-year warranty, the battery should still operate at 70% of its original performance. Lead acid battery warranties typically last for two to five years.
Inverters play an important role in how the battery stores and converts solar energy. While solar panels generate electricity in direct current, the electric grid and homes generally use alternating current. An inverter can convert AC to DC or vice versa, and most solar batteries include an inverter to store the energy in DC form, as well as an inverter to convert it back into AC to be used in the grid or the home.
Because inversion of current isn't perfectly efficient, battery producers are always experimenting with how to invert less often and increase the efficiency of the battery. As a result, some batteries will not have inverters for both input and output included in the system. Talk to your solar installer about the battery system you're considering so that you can make sure you have all the external inverters you need.
Beware cheap inverters, which are everywhere. To power modern household appliances, a pure sine wave inverter is essential; otherwise, you may end up frying some of the more delicate electronic circuits in your home.
Solar power is available for only part of the day. Adding a solar power storage battery system ensures you always have power when the sun isn't out or during a power outage.
A professional solar electricity system installer can help you select a battery that works well with your goals, whether you want to be entirely off-grid, have an emergency store for outages or minimize your costs from the electric company during peak hours.
DIY battery installation instructions abound online, but beware. Working with electrical equipment is dangerous and doing so without the proper training may also void your warranties and put you out of compliance with codes and other regulations.
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Yes. The 30% federal solar tax credit can be applied to the total cost of your solar battery system if your battery can hold at least three kilowatt-hours of energy and is installed in or later.
It depends on how you intend to use them. Likely, fewer batteries are required if you simply hope to maximize net metering savings. To keep your home powered during an extended blackout, you will need to calculate your total power needs
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The use of batteries, like the Tesla Powerwall or Enphase IQ10, for residential electricity storage is growing rapidly. The March edition of Wood Mackenzie&#;s &#;US Energy Storage Monitor&#; noted an 88% increase in residential battery storage capacity in the US in and projected a four-fold increase in residential battery installations from through .
While battery storage is most often used to capture excess energy from solar panels and provide backup power during blackouts, residential electricity storage is also emerging as a tool to save money on utility bills year-round.
Residential
Batteries as &#;Rate Tools&#;
for Cost Savings
To round out our discussion of choosing the most cost-effective residential electric rate plan for you, let&#;s explore two possible opportunities for cost savings using residential batteries:
Peak Demand Control
: Over the last decade, many electric utilities have developed residential electricity rates that include a demand charge&#;a charge based on a customer&#;s highest hourly use during the billing period or across a 12-month period. For instance, Georgia Power offers the Smart Usage rate plan (
learn more about Georgia Power rate plans
), and Cobb EMC offers the Smart Choice rate plan. Residential batteries can be used to control a customer&#;s peak use and lower the demand charge on their monthly bill.
Energy Arbitrage
: Residential time-of-use electricity rate plans have also become popular with electric utilities across the country. These electricity rates offer an opportunity for energy arbitrage&#;using a battery to store low-cost electricity (often by charging at night) and using that electricity during high-price periods, thereby buying less high-priced electricity from the utility.
Peak Demand Control in Action
My friend Sibley is a Cobb EMC customer and uses their Smart Choice rate plan, which includes a demand charge based on the customer&#;s highest one-hour consumption of energy during Peak Notification Periods in the current month and the previous eleven billing periods. Cobb&#;s Peak Notification Periods occur from 2-7 pm on days that Cobb EMC announces in advance as Energy Saving Peak Days.
Leading up to the summer of , Sibley&#;s demand charge was $8.40 per month and made up about 10% of her monthly bill. In July , Sibley set a new peak demand that drove up her demand charge four-fold, to over $34 per month. Her demand charge stayed at $34 for the next year and accounted for nearly 30% of her average monthly bill.
Sibley had installed a 10-kWh Enphase battery in late as a backup power source to avoid blackouts, but her high demand charge offered a compelling opportunity to explore using her battery differently. In the early days of the summer of , I helped Sibley adjust her battery settings to dramatically reduce her peak usage during Peak Notification Periods.
We missed the first two Energy Saving Peak Day notifications in late June. Fortunately, Sibley&#;s peak use didn&#;t spike too high on those days, staying below 5 kW (the peak demand on her bill was 9.1 kW). During the next six peak periods, though, Sibley used her battery in tandem with her solar system to keep her peak hourly use to 3.7 kW or less. The figure below shows her hourly load profile on a day when Sibley managed to keep her hourly demand below 1 kW throughout the five hours of the Peak Notification Period.
Sibley cut her demand charge from $34 per month to $11 per month on her August bill. She could have cut it further if we had not missed the first two Peak Days. Even though she used more electricity in August than she did in August , her more recent bill was 12% lower. And these savings should continue for Sibley for the next eleven months. While not a perfect effort, we achieved worthwhile savings.
Opportunities for
Energy Arbitrage
Next, we&#;ll look at a few savings opportunities from using a residential battery for energy arbitrage. Though two of these examples are hypothetical, all show the advantages of buying electricity from utilities when the cost is lowest.
Sibley&#;s Super Off-Peak Charging
Cobb EMC also offers a time-of-use rate with three &#;buckets&#; called NiteFlex, designed to encourage nighttime electricity use (midnight to 6:00 am). NiteFlex charges customers zero cents per kWh for the first 400 kWh of Super Off-Peak (SOP) electricity used each month. After a customer exceeds the 400-SOP-kWh-per-month threshold, they pay 4.5 cents per kWh for SOP electricity.
If we assume Sibley fully charges her 10-kW battery each night with SOP electricity (in addition to what she already uses for her house and car) and discharges it during the more expensive peak and off-peak hours, Sibley could drop her annual electricity bill by $270 to around $1,020, a 21% savings compared to her next cheapest rate option.
Georgia Power Customer with Two Home Batteries
I recently met a couple that actively use their two Tesla Powerwall batteries in conjunction with Georgia Power&#;s Plug-In EV time-of-use rate. At night, they charge their two electric vehicles (EVs) and their Powerwall batteries. They use the stored low-cost electricity in their batteries and the production from their solar system during the day to power their house. While the two batteries do not cover all their electricity use every day, particularly in summer months, they can cover most daytime use.
During the 12 months from July &#; June , this couple paid $792 for electricity. Under the Standard Residential rate, the same level of net electricity use (after net metering) would have resulted in an annual bill of about $1,445, more than $650 higher. Their current use of batteries in conjunction with a time-of-use rate amounts to 45% annual bill savings compared to what their Standard Residential bill would have been.
Hypothetical Batteries for My Case Study Volunteers
In an earlier post, I presented five case studies where I used customers&#; hourly energy data to determine their lowest cost rate option with Georgia Power. I expanded this analysis and calculated how these customers&#; annual bills would change if they used a Tesla Powerwall or equivalent size battery (13.5 kWh capacity) to store SOP energy under Georgia Power&#;s Plug-In EV rate, discharging the battery during Peak and Off-Peak daytime hours. I assumed the battery maintained a 15% reserve charge every day and operated at 90% round-trip efficiency. These case study households might save from $160-$425 (8-32%) on their respective annual electricity bills compared to the least cost rate option identified for their current (pre-battery) electricity use.
Strategic Battery Use Has Broader Benefits
Both peak demand control and energy arbitrage can save you money while also helping the grid. The utility designed its residential rate schedules to charge you for the costs you &#;cause&#; on the electric system and to send you price signals designed to encourage you to use electricity in a way that benefits the utility and all customers. As you use your battery to save on your bill, you are improving the efficiency and resiliency of the grid by maximizing the use of low-cost baseload power resources and reducing strain on the grid during peak periods with an energy resource for which you paid the full cost. You are paying less while providing benefits to all customers.
Should You Go Buy a Home Battery?
You might ask whether installing a residential battery is worth it. Unfortunately, buying a battery to save on your electricity rate as a stand-alone proposition (not considering the reliability or other benefits) probably does not make financial sense. Intuitively, with a range of annual savings identified above of $160-$425 (higher with two batteries), it would take many years to pay back the upfront cost of approximately $11,500. But if you already own a residential battery as part of your solar energy system, rethinking how you use it could be worth your while.
The payback calculus may also change in the coming years. As EV technology advances, it may become common one day for an EV owner to run their home using the battery in their car, powering their transportation and saving money on their rate plan with the same battery. Additionally, through &#;Virtual Power Plant&#; programs, some electric utilities across the country have begun paying residential customers for the benefits their batteries can provide to the electric grid. These programs increase the value to battery owners too.
Final Thoughts
If you already own a residential battery, I encourage you to carefully consider what is the most cost-effective way for you to operate your battery. If you&#;re going to buy an EV to charge at home, it&#;s also worth asking if it can be set up to charge your home. If you&#;re like me and don&#;t own a residential battery, I hope I&#;ve at least stirred you to imagine a future when you only buy electricity at night and save money all day as your battery quietly hums in the basement. Thank you for joining me for the Electric Bills Decoded series.
Electric Bills Decoded is Southface Institute&#;s series exploring how Georgia Power residential customers can use data to help determine whether changing their electricity rate plan can lower their utility bills and offset recent rate hikes. Follow along to understand different types of rates and charges; identify electricity usage patterns; use your data strategically; consider the impact of going solar; explore several case studies; and learn about battery storage as a cost-saving tool. We&#;re decoding it all!
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