Batteries and energy storage will be hot energy topics of conversation and R&D throughout the 2020s. . . not solar. Solar has already proven itself to be the most cost-efficient energy generator.
Batteries, on the other hand, are a decision that needs to be thought out carefully. Depending on your goals for your solar system and the policies in your location, a battery may be key to helping you save money and stay prepared for outages—or it can become a financial drag that lowers your ROI.
This article will help you decide whether a battery suits your needs.
The biggest problem with solar is not the cost to produce the energy, but what to do with the energy at the time of production.
Solar produces the majority of its energy during the same 4-6 hours every day— we call these peak sun hours. However, we pesky humans tend to have the highest energy demands in the evening when the sun doesn't shine.
This is where batteries dominate. We overproduce in midday, and batteries help spread the energy out into the evening hours and early morning until our panels can begin generating all over again.
Batteries should be viewed as a solution for 2 scenarios:
- Time of Use/Consumption: Spreading out your energy production throughout the day to take advantage of net metering/billing policies such as California's NEM 3.0
- Off-Grid/Backup: Complete energy independence, large battery systems to literally and figuratively weather storms
Batteries for Time of Use/Consumption: California's NEM 3.0
In some situations, batteries are best used not to back up in the event of an outage, but to engage in "battery arbitrage," or storing energy produced by the panels for later use or to export to the grid at the optimal time. In the industry, these are called "consumption batteries," because their primary purpose is to store energy for normal consumption, not for times when the grid is down.
The majority of homes are connected to utility grids that charge different rates based on the time of day the energy is being used. So, early morning or midday are usually the cheapest times, and then energy rates can skyrocket in peak hours, often 5-10 pm—the time when people are home from work using their TVs, dryers, AC, and other power equipment.
Most homeowners strategically size their solar systems to generate close to as many kilowatt hours a month as they use, but that can leave them overproducing at the times of highest production and underproducing at times when they use it most.
Batteries smooth this out, since they algorithmically optimize when to use battery power to minimize your pull on the grid during the expensive peak times. This can result in significant savings for some customers.
Let's look at an example. If your daily consumption is 40 kWh, and you have an 9 kW system, your solar should generate enough energy to offset your bill if you have a 1-to-1 net metering agreement (9 kW * 4.5 sun hours = 40.5 kWh). For those with low net metering rates (looking at you, AZ), pairing your system with a battery should make it so YOUR solar-generated energy lasts the entire day.
Without a battery, you risk selling your excess energy back to the utility at the wholesale rate and then buying it back at the retail rate (in states with unfavorable net metering policies) when needed.
Our choice consumption battery to optimize time-of-use is the Enphase IQ 5P. Working in tandem with our Enphase microinverters, this battery can automatically store energy during low usage times for use during high traffic hours.
Cost of Batteries
Batteries are great when they financially make sense for your situation. At Project Solar, we can provide Enphase IQ 5P batteries (which have 15-year warranties) and Tesla Powerwall 3 batteries (10-year warranties) at the prices below.
In addition to installing the battery (or, batteries) itself, you will need one System Controller, which will enable your system to keep functioning during outages.
Important Note: The Enphase System Controller is required for battery jobs. The below battery price includes the required System Controller components. If you already have a System Controller and/or just want to purchase a battery, the price would be less.
|
Product |
DIY Pricing (Before Any Incentives) |
Full-Service Install Pricing (Before Any Incentives |
|
First Enphase IQ 5P Battery + 1 System Controller (Backup Configuration) |
$6,000 | $9,250 |
|
Each Additional IQ 5P Battery (Backup Configuration) |
$3,500 | $6,250 |
|
First Enphase IQ 5P Battery (Consumption Offset Configuration)* |
$3,500 | $5,250 |
|
Each Additional IQ 5P Battery (Consumption Offset Configuration)* |
$3,000 | $5,250 |
|
First Tesla Powerwall 2 |
N/A | $13,750 AZ/CA Pricing: $11,550 |
|
Each Additional Tesla Powerwall 2 |
N/A | $10,250 |
*Only available with select utility companies. Please contact a representative to confirm.
IMPORTANT: We do not provide DIY install support for Enphase batteries. For a battery to be commissioned, customers will need to become Enphase certified. The process of battery installation can be much more complicated than solar installation, and the batteries weigh around 150lbs each.
We offer the Power Bank & Expansion Packs as another battery option--these are more off-grid-friendly, and are fully portable. They're also expandable up to 8.064kWh at nearly a third of the price of our Tesla Powerwall 3 offering.
For more information on Power Bank and how it measures up to other solar batteries, check out our blog posts on Power Bank's use cases and our top picks for battery backup.
How much battery storage do I need? Is it worth it?
Here's a general estimate for how much battery capacity you will need:
For every 5 kW of solar, you'd need ~10 kWh of storage. Other details like amp load of heavy duty equipment may affect this number, especially on the smaller single 10 kWh battery systems.
Determining if a battery makes financial sense is the big question. For some, it may not when strictly reviewing ROI. A general rule of thumb for determining IF a battery makes financial sense for you is to subtract your kWh rate from your net metering credit rate (in UT it's 10¢ - 6¢ leaving a 4¢ net).
If the net rate is lower than the 6¢, then we'd advise no battery. Remember, in most states with tiered prices based on consumption, your average will most likely be billed in the lowest and cheapest tier. Use this lower price as the starting point.
If you do have low/no net metering benefits, a battery is sometimes a worthwhile investment to provide higher savings on your utility bill. One example of this is NEM 3.0—this policy has lowered the value of exported energy in California, meaning batteries can actually decrease system payoff time. Project Solar therefore currently recommends consumption batteries for most systems installed in California.
Off-Grid
With the recent chaos in Texas and the frequent blackouts in northern California, demand for "off-grid" energy, or backup batteries, has never been higher.
However, we need to define what "off-grid" actually means.
Unless you are completely disconnected from the grid and fully reliant on solar and batteries, you are not technically considered off-grid. It is important to be aware that many states discourage off-grid living through local laws and regulations.
Having 10-30 kWh of storage could certainly cover the majority of your energy usage, spreading out what you collect from solar into the evening and early morning when the sun is not shining.
However, unless you have enough capacity to cover you through a winter storm, you won't have enough to be "off-grid" and truly disconnected from city power. You'll still be 90% + (weather permitting) energy independent, but off-grid typically requires a much heftier investment.
The rule of thumb when designing an off-grid system is to have 2-3 days worth of storage. To calculate this, simply look at your monthly kWh usage and divide by 30 to get your daily usage rate. Then multiply by 2-3 (days), and that is your storage need.
For example, I use about 2,100 kWh a month at my house. 2,100/30 = 70 kWh a day on average. Multiply that by 2.5 (I'm in UT which is relatively sunny), and that equates to 175 kWh of needed storage.
Most people looking for true off-grid solutions do so for mountain homes or other remote locations where grid tie wouldn't even be an option if they wanted.
Off-grid homes are usually smaller, and most will opt for lead acid batteries over lithium ion. Lead acid batteries are a little more high maintenance and can't necessarily compete with a lithium ion battery's longevity, but they are considerably cheaper.
If you're looking for off-grid storage without going completely off-grid, less batteries are needed.
At Project Solar, we offer the Power Bank Home Backup Kit as an off-grid battery solution--this Lithium Iron Phosphate battery kit can be expanded up to 8.064kWh, and can be tied into your home's essential loads with a Transfer Switch.
We even offer solar panels for purchase to charge these batteries, so you can take advantage of green energy even without a home solar system.
For more information on off-grid solar systems, check out our blog article titled "How Does Off-Grid Solar Actually Work?"
