Solar battery storage (commonly referred to as solar + storage) is a booming industry. By combining solar panels with battery storage, homeowners can store excess electricity generated by their solar panels to expand the ways they use their solar energy – and how they can benefit from it. By storing solar batteries, they can rely less (or not at all in an emergency) on the power grid to potentially reduce their costs and even increase their income.
The rise of solar energy storage
As climate change increases the frequency and severity of extreme weather conditions, resilience becomes increasingly important for homeowners and they turn to Solar + Storage for help. When the power went out in Texas and parts of the southeast in February 2021, a homeowner shared how he could keep his refrigerator running and turn on his heat and lights because he had rooftop solar panels and a battery storage system in his garage. Interest in solar and battery storage systems has more than doubled during and after the power failure. In recent years, catastrophic forest fires and power outages have increased battery storage in residential California and Australia. Extreme heat caused by the climate continues to threaten energy systems with failures. More and more consumers are switching on air conditioning systems at the same time, in which power lines only have a limited capacity to transport electricity.
Solar + storage efforts have also been accelerated by falling prices and government incentives. Lithium-ion battery prices fell 87% between 2010 and 2019, mainly due to increased production of electric vehicles. The federal tax credit for renewable energies can be applied to batteries if they are charged via a solar system (and not directly from the grid). California, Massachusetts, and New York are also incentivizing homeowners to install batteries with their solar panels. In areas prone to wildfires, California's self-generating incentive program pays for almost the entire battery system.
Homeowners aren't the only ones realizing the benefits of Solar + Storage. Utilities such as the Los Angeles Department of Water and Energy have tied utility-scale solar projects to high-capacity batteries at prices well below fossil fuel systems. At the end of 2020, a third of all new solar projects on a supply scale based on capacity were paired with battery storage. In California, the rate was almost two-thirds.
How solar energy is stored in a battery
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Coupling batteries to solar panels removes the biggest challenge to the widespread adoption of solar energy: its variability. In addition, the time of day when electricity demand is highest is usually also around sunset. Solar panels are most productive at noon, when the demand for electricity is low.
Most owners of solar systems use the electricity grid as a battery: if they produce more electricity than they consume, their modules send the excess to the electricity grid. In most states, they are credited for this excess electricity by their utility company through a net metering program. The credit is then applied to paying for the excess electricity that homeowners use when they use more than they produce.
In conjunction with the battery storage system, solar modules can send the electricity they generate to the house, into the power grid or into the battery storage system. Part of this process involves one or more inverters that convert electricity from alternating current (AC) to direct current (DC) or vice versa. In new installations where solar modules are installed at the same time as the battery, only one inverter is required to convert the direct current coming from the solar modules into the power grid for domestic use, both of which are operated on AC. Batteries store energy in direct current from the solar panels. For houses that already have solar panels but are adding storage, the system already has an inverter that converts direct current to alternating current. Therefore, a second inverter is needed to convert the alternating current back into direct current so that it can be stored in the battery – a process that is less efficient.
Properties of solar batteries
Lithium-ion batteries dominate the solar energy storage industry, providing over 90% of the utility-scale storage capacity in the United States. For storage in residential areas, lead-acid batteries offer the advantages of low cost, recyclability and long shelf life with little to no maintenance. However, they are heavy and take longer to load. Lithium-ion batteries charge faster and can absorb more energy per mass. This makes them the preferred choice of most residential solar storage systems, according to the Solar Energy Industries Association.
Given their lifespan, performance and cost, the US Department of Energy's analysis shows that lithium-ion batteries have the highest cost advantage, which will only increase in the years to come as the technology matures and prices fall. The remaining 10% of utility-scale energy storage options – such as pumped storage hydropower, flow batteries, sodium-sulfur batteries, molten salts, flywheels, and compressed air – are out of the range of homeowners.
Other battery properties also determine the cost effectiveness and usefulness of Solar + storage systems.
Performance and capacity
Two similar looking metrics – kW and kWh – are measurements of the power and capacity of a battery, respectively. A kilowatt is the amount of energy a battery can deliver at one time, while a kilowatt hour is the total amount of energy the battery can store. The average US household consumes just over 30 kWh per day, according to the US Energy Information Administration, while battery systems are generally less.
Round trip efficiency
Round trip efficiency is the measurement of the amount of energy lost in transferring and storing electrons in and out of the battery. The loss is usually around 5%.
Battery life
Battery life is measured by the number of charge and discharge cycles it can go through. Over time, the batteries degrade and lose their ability to maintain the same level of charge.
Can You Save Money With a Solar Battery Storage System?
In the past, diesel generators were used as a backup energy source during power outages. A diesel generator can have a purchase price of $ 2,000 to $ 6,000, largely depending on its performance. When you add the cost of installation and fuel, that number can rise to anywhere from $ 10,000 to $ 20,000. If homeowners are lucky, most of the purchase price of a diesel generator will just be comforting and the generator will never need to be used.
While the upfront costs of a Solar + storage system are significantly higher depending on the size of the system, the return on investment is higher. Solar powered battery backup can be more than reassuring: it can save homeowners money and generate income.
Different electricity suppliers have different tariff structures: some charge a flat rate per kilowatt hour consumed; others charge a surplus for customers with high demand; Still others have usage plans where electricity is cheaper outside of rush hour. Solar + storage systems can take advantage of any of these tariff structures by reducing the demand for grid power, even during times of high demand, or storing energy from the grid when it's cheapest and using the battery when grid power is most expensive.
Given these factors, an analysis by the Rocky Mountain Institute (RMI) for commercial and industrial customers with high demand fees found that Solar + storage can deliver cost savings. For residential customers, an earlier (2015) RMI study predicted that Solar + storage systems would be affordable in many parts of the US by 2025 to 2030. As the costs of both solar systems and lithium-ion batteries continue to fall, the cost-benefit equation for private customers is changing faster than expected.
Virtual power plants
What is a virtual power plant?
A virtual power plant (VPP) is an emerging technology that can help save money in residential solar customers. Individual homeowners can virtually (but not physically) connect their solar batteries to sell energy and grid services to their electricity supplier.
The utilities not only always have to have sufficient power supply in order to perfectly satisfy customer demand. You also need to make sure that the current flowing through your wires is flowing at a constant rate of current and frequency. When supply and demand do not match, or when electricity rises or falls, the frequency is switched off and can damage electrical systems. In traditional grid systems, turning fossil fuel power plants on and off to balance supply and demand is expensive and slow, while operating as reserves to waste money.
In April 2021, 95% of California's electricity was from renewable sources. As more and more variable renewable energies supply the grid with electricity, too much wind or sun can lead energy providers to shut down available clean, inexpensive renewable energies. Otherwise you risk a power failure. With the batteries in virtual power plants able to absorb excess electricity that might otherwise be restricted or provide additional electricity almost instantly when needed, utilities can reduce the cost of running a natural gas facility and pass some of that savings on to members from passing on the VPP.
VPPs sound like a thing of the future, but they already exist, inspired by Federal Energy Regulatory Commission Regulation 2222, which allows private customers to participate in energy markets. Outside of Salt Lake City, Utah, a solar + storage shared apartment operates a VPP in conjunction with the local utility company. Tesla Powerwalls owners who are customers of National Grid or Eversource utilities in the Northeast can participate in the Connected Solutions program and earn up to $ 1,000 per year. Tesla also operates VPPs in the UK and Australia. While Sunrun, the leading solar installer, offers VPP programs for Solar + Storage customers in Hawaii and California. As more and more VPPs are created, the cost savings with Solar + storage systems increase.
Can a solar battery storage unit take you off the grid?
During the recent forest fires, California residents with rooftop solar systems were surprised to find that the grid went down when the grid went out. If a homeowner's solar system is connected to the grid, the solar system will also fail for safety reasons. Otherwise, the electricity fed into the grid would put the power line workers doing the repairs at risk. In contrast, many Solar + storage systems can be automatically disconnected from the power grid, so homeowners can continue to draw power either from their solar panels or from the battery itself. While most Solar + storage systems are not designed to completely interrupt a homeowner's connection to the power grid, they offer the option of operating either individually or together as microgrids independent of the power grid for shorter periods of time.
What is a microgrid?
A microgrid is a networked group of energy producers and consumers that are normally connected to the utility grid, but can also be "isolated" to act independently if the power fails.
When the Colonial Pipeline fell victim to a cyber attack in May 2021 and cut fuel supplies to much of the east coast, it gave the network operators a shudder. While the North American Electricity Reliability Corporation has mandated cybersecurity standards for the power grid, the grid is not invulnerable. A cyber attack briefly shut down an unnamed utility company in the western United States in March 2019, the first of its kind.
One defense against shutdowns due to cyber attacks, natural disasters or other emergencies is the creation of microgrids. On the one hand, utilities have less control over the operation of Solar + storage systems, making them potentially more vulnerable to cyberattacks. Compared to a centralized power grid, where a single phishing attack can result in widespread power outages and require the payment of millions in ransom to get the system back to normal, this is the reward for hackers who disperse power resources like solar + disrupt storage is smaller and the damage is localized.
As of September 2020, 1,639 microgrids were in operation in the USA, generating over 11 gigawatts of electricity for their customers. Microgrids are particularly useful for strengthening critical resources such as hospitals or military bases. In 2019, a fire station in Fremont, California became the first in the United States to install a Solar + storage microgrid.
Should you buy a Solar Plus storage package?
Resilience can mean something different to homeowners than it does to a company, organization, or public service that operates critical infrastructure. According to a traditional cost-benefit analysis, homeowners' ability to generate and use their own electricity is currently inefficient. As with car insurance or life insurance, most people are fortunate enough not to get a return on their investment. Considering the potential cost of damage without it, a Solar + storage system can be a worthwhile investment. When the power went out in Texas during record temperatures in 2021, monetary losses were hundreds of billions of dollars– and almost 200 people died. Especially in areas where power outages can occur due to extreme weather conditions or other natural disasters, the decision to invest in Solar + storage carries more weight than ever before.