Solar Batteries & Home Battery Storage

Solar Batteries & Home Battery Storage

The ability to store energy for later use is an absolutely critical component of our transition to clean energy, both at utility scale and in our homes. In this guide we’ll focus on home battery storage and provide context for how this plays a role in our path to net zero carbon emissions to 2050.  We’ll cover:

Why battery storage is important
Benefits of home batteries & energy storage
Home batteries as part of a solar system
Best home batteries on the market today
Electric cars & trucks can power your home
Installing battery storage in your home
Costs, Incentives and Payback period for home battery systems


Why Battery Storage is Important

Our current electrical grid is designed to match supply to demand at the time the energy demand is happening.  For example, on a hot summer day when A/C usage will surge, a grid operator can instruct fossil-fuel burning power plants to burn more coal and natural gas to produce the electricity required to keep all those A/C units spinning. While burning fossil-fuels produces ‘on-demand’ electricity, it makes those summer days much hotter by producing billions of tons of planet-warming greenhouse gasses.  In 2020 the U.S. power generation sector produced just over 4 trillion kWh of electricity with 62% coming from fossil-fuels. This resulted in 1.55 billion metric tons of carbon dioxide being pumped into our atmosphere. Coal is the most polluting of the fossil fuels, producing over twice the CO2 per kWh of electricity as compared to natural gas (2.23 pounds of CO2 per kWh of electricity produced vs. .91 pounds for natural gas).

In terms of when electricity demand is highest, in the winter, there is a peak in electricity use in the mornings and again around dinnertime. In the summer the picture is a bit different. In the US, 87% of homes have air conditioning units, requiring a lot of power to run them. As a result, the highest power consumption in the summer occurs in the evening, reaching its peak around 5:00 PM or 6:00 PM.

What does all this have to do with battery storage?  Well, the current electrical grid is not particularly good at integrating renewable energy to match these swings in demand. Clean power from sources such as wind and solar cannot be ramped up and down to meet demand. Battery storage allows us to harvest renewable energy when the wind is blowing and the sun is shining and store it for when it’s most needed.  To that end, the ambitious clean energy goals set at the federal and individual state levels can only be met with the help of energy storage, and a lot of that will come in the form of batteries. 

As individuals we too can play a role in cleaning up how power is generated with the help of solar systems coupled with energy storage from batteries.  Not only are these systems taking pressure off the grid, requiring less fossil-fuel generation, they can also save you money over time.

The ambitious clean energy goals set at the federal and individual state levels can only be met with the help of energy storage, and a lot of that will come in the form of batteries. 

Benefits of home batteries & energy storage

We’ve covered why energy storage is a big benefit to the grid and therefore society as a whole.  Let’s now dive deeper into the benefits of battery storage specifically for homeowners.  The question of whether adding battery storage to your home is a good idea is a bit more complex than that of just adding a solar system. The main considerations about whether home battery storage is worth it boils down to these four questions:

1) Do you experience frequent power outages?

The primary reason most homeowners install energy storage is for emergencies. Electricity outages happen, and some parts of the country are more prone than others. 

“Energy resiliency” is the ability to keep the electricity flowing, providing backup power during electrical outages. Losing power temporarily may be an inconvenience, such as forcing you to throw out food from your freezer that thaws, but days without power can be life-threatening.  Unfortunately, power outages are becoming more common.  Hurricanes such as Sandy and Ida, which are becoming more frequent and intense with climate change, have knocked out power for weeks in places prone to intense storms.  Additionally, rolling blackouts affect areas like California when demand for electricity exceeds supply.  Grid operators in fire-prone areas will also shut off power when it’s windy and dry to reduce the risk that fallen power lines could spark a blaze.  Home battery storage insulates you from losing power during events like these.

2) Does your electric utility bill you based on time of use (TOU)?

There is a push by some states to implement what’s called Time of Use (TOU) rates or demand charges for electricity and many utilities offer this as an optional program.  With TOU billing you pay more for electricity during peak-use hours, often after the sun is lower in the evening hours and your solar panels, if you have them,  are not generating as much power.  Drawing power from your battery during these expensive times can be a nice cost-saving measure. Additionally, being able to store electricity, either from your solar system – or from the grid when power is cheaper, insulates you from future increases in the price of electricity.

3) Does your electric utility bill include demand use charges?

What’s a demand charge? This is a charge that is levied on electricity consumers for the maximum amount of power they use. With residential electricity users, this is uncommon, but it is increasingly common for commercial and industrial customers. Demand charges can account for as much as half or more of the total monthly costs for such companies.

4) Does your utility and state offer 1 to 1 net metering?

Net metering is great, allowing solar customers to send excess power generated back to the grid in exchange for a credit against your electricity bill.  In some areas however, utilities only offer a partial credit meaning that if you were to generate a kilowatt-hour of excess electricity, the utility may only give you credit for half a kilowatt-hour on your bill. In these cases, to make the most of your solar system investment, storing the excess power in a battery (vs sending it to the grid) can make more financial sense.

Home batteries as part of a solar system

Solar systems come in two main types – grid-tied and of-grid.  Off-grid solar systems are for houses not connected to utility-generated power, typically in more remote locations.  These systems require batteries as the houses don’t have the option to purchase electricity when the sun is not shining. But grid-connected solar systems can benefit from battery storage also, as installing solar and energy storage together can help maximize your financial savings. This is especially true if you do not have access to one-to-one net metering because you might produce more solar than you use during the day and you can store it for later use.  Additionally, many people think that grid-tied solar panels will provide power if the grid goes down, but this is only the case if you have battery backup. 

Best home batteries on the market today

The options for home battery systems are growing rapidly fueled by rising electricity costs and increasingly frequent power outages.   Some of the best options on the market today include:

Tesla Powerwall
Panasonic EverVolt
Electriq Power PowerPod 2

Electric cars & trucks can power your home

Electric cars and trucks are gaining in popularity, and for good reason. Increasingly some of the models offer the ability to tap into the power stored in the vehicle’s battery in the case of a power outage.  For example, Ford made a splash with their F-150 Lightning electric truck which features available Ford Intelligent Backup Power.  This feature can power a home for up to 3 days on a fully charged battery, or up to 10 days if rationing power.  This does require that the home be properly equipped and can be disconnected from the grid when using power from the truck battery.  Other manufacturers are also developing this capability in a rapidly evolving market.

Installing battery storage in your home

There are several steps to installing a home battery and the entire process normally takes between 4 and 8 hours, so typically a day or two, typically for 2 people.  The general decisions, and components that need to be installed are:

  1. Location – the location is very important and in most cases your battery will be placed near your main circuit panel.This will allow the electrician to more easily wire the battery to your house’s circuits. Depending on the size and brand of the battery system and your personal preferences, you can have the battery system mounted on the wall or the floor. Discuss the location with your installer and decide carefully as it will not be easy to move the battery after installation. Your installer should be aware of local codes and regulations regarding home battery installation. For example, some clearances or enclosures may be required depending on where you live.
  2. Interconnection and permitting – your installer should take care of permitting and getting permission from the utility to connect your battery to the grid.  This is known as an interconnection agreement.
  3. Inverter – if you have an existing solar system you may need to replace your solar inverter with a ‘storage ready’ inverter. Your installer will assess your system and make this determination.  There are a few options here so be sure to discuss with your installer.
  4. Transfer Switch – a transfer switch detects electrical outages and will switch to supplying your home’s appliances from the battery.  It will also prevent your battery from pushing electricity into the grid during an outage as this can create dangerous situations for line workers trying to restore power.
  5. Critical Load PanelHome battery installers often recommend adding a critical load panel to select the appliances that will be powered during an outage. This ensures that power is reserved for the most critical equipment, such as an air conditioning unit that requires a high current load to start up.
  6. Wiring the components together – The installer will need to wire the battery, inverter, transfer switch, and, if selected, the critical load panel to your home’s main circuit panel and your home’s circuits. This involves running new wires to each new device and should only be performed by a licensed electrician.  The installer will need to shut off power to your home during this phase of the installation.
  7. Programming your home battery – one of the final steps in the installation, after the system is all hooked up, is to program the system.  Most modern battery solutions offer a mobile app that allow you to monitor and customize your battery usage.  For example, you can use the mobile app to program your battery to charge up when electricity is at its cheapest in your area.

Costs, Incentives and Payback period for home battery systems

While there are many benefits to home battery storage, they can be expensive and can materially increase the cost of a solar installation. The typical home battery system will cost between $10,000 and $20,000 depending on several factors such as the number and capacity of batteries installed, the chemistry of the batteries and whether or not the battery has a built-in inverter.

Unlike solar panels, battery storage is less flexible in terms of tuning the capacity (measured in kWh) you’ll need.  With solar panels, adding or removing a panel is easy to narrow in on the required generation.  But with batteries, the amount of stored capacity jumps by larger increments so shopping around for the right size battery will help keep the cost within your budget.

The chemistry of the battery also plays a role in the cost. Most batteries use lithium ion, with the two most common types being nickel manganese cobalt (NMC) and lithium iron phosphate (LFP). NMC batteries are typically more power-dense while LFP batteries tend to last longer.  In general, you can expect to pay 30-50% more for LFP batteries.

The above-mentioned critical load panel will also be a factor in the system cost. While critical load panels are not particularly expensive, the re-wiring involved can add to the installation cost.  A critical load panel requires that you determine which circuits you want to prioritize during a power outage.  Another compelling option is a smart electric panel which allows flexibility in directing your home power.  While more expensive than critical load panels, smart panels are certainly a nice option to include in your system.

Finally, you’ll need to determine your need for an inverter which will influence the system cost.  Batteries store direct current (DC) electricity, but your home uses alternating current (AC) electricity. Converting DC to AC is the role of the inverter. Some batteries come with their own built-in inverters, but if yours doesn’t, you’ll need to purchase one.

While above hardware decisions will typically drive about 50-60% of the cost of a battery system, the remaining costs (largely installation and other ‘soft costs’) can add up.  Typically some efficiencies can be gained by installing a battery at the same time as a solar system as this will avoid some re-wiring.

In terms of incentives, the federal investment tax credit is the best way to save on the system cost.  The same tax credit that provides a 26 percent credit (as of 2021) on the cost of your solar panels and system provides that same benefit to storage systems, assuming certain criteria are met.

The primary factor that determines whether your battery is eligible for the tax credit is how you charge the battery. If you charge the battery exclusively with an on-site renewable resource (such as solar) then your battery is eligible for the full 26 percent tax credit. For a typical home energy storage system, the federal tax credit can reduce the cost of your system by up to $5,000. Many states also offer tax incentives for solar which may include batteries so be sure to ask your installer or tax professional what options are available to you.

Contractors for Hybrid Heat Pump Hot Water Heater Installation

Finding the right contractor can be the key to having a hybrid heat pump water heater installed correctly and safely, and is certainly easier than doing it yourself. Beyond word-of-mouth recommendations, local building inspectors or trade groups may have a list of licensed contractors in your area.

How to Get Your Home to Net Zero

We’re Here to Help!