When you picture a battery, the first thing to come to mind is probably the disposable batteries you put in everyday appliances like your TV remote. But did you know you can power your entire house with (much larger) batteries?
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You don't need a home solar panel system to reap the benefits of home battery backup. But you'll get the most out of your system when you pair them together—especially if your utility doesn't pay you much for the excess electricity your solar panels generate and send to the grid.
We explain how to decide if backup batteries are right for you and, if so, how to get a battery system that fits your needs at the best price.
Home backup batteries store extra energy so you can use it later. When you only have solar panels, any electricity they generate that you don’t use goes to the grid. But with residential battery storage, you can store that extra power to use when your panels aren’t producing enough electricity to meet your demand.
Most batteries have a limit on how much energy you can store in one system, so you may need multiple batteries if you want to have enough capacity for long-duration backup. Also, most batteries can’t store electricity forever—even the best home battery backups will slowly lose charge over time, whether or not you use them.
You don't need solar to install a home battery, but batteries only store energy, they don't produce it. Pairing your battery system with solar panels allows you to truly increase your grid independence and your electric bill savings. Here's how it works:
But home backup batteries are becoming an increasingly popular choice over home generators. They offer many of the same backup power functions as conventional generators without the need for refueling. While they're more expensive upfront and require an electrician to install, you can "refuel" them for free with the sun's energy if paired with solar panels. They're also much quieter than generators and don't come with emissions-related health concerns.
Most batteries last about 10-15 years, meaning you'll have plenty of time to break even on your investment. While many homeowners can benefit from installing a battery system, they're not right for everyone. Here are a few questions to answer when deciding if you should add a home battery:
Power outages are an occasional nuisance for everyone, but for some people, they're a far too regular occurrence: According to the Energy Information Administration, the average U.S. electricity customer experienced 5.5 hours of electricity interruptions in . However, customers in Florida, West Virginia, Maine, Vermont, and New Hampshire experienced average outages ranging from 10.3 hours in New Hampshire to 19.1 hours in Florida.
Under these policies, you could still have a hefty electric bill even with solar. By pairing your solar panels with a battery, you can program your system to export electricity to the grid only when compensation rates are high and pull from your battery when rates are low, maximizing your savings.
Even if you don't have solar, batteries alone can be worth it if your utility uses a complex electricity rate structure. Time-of-use, or TOU, rates are a form of "time-varying rates" designed to better reflect the actual cost of electricity based on the amount of supply and demand. Utilities have used TOU rates for businesses for many years, but they're becoming an increasingly common way to charge homeowners. Under TOU rates, your electricity cost will vary from hour to hour, day to day, and season to season. With a battery, you can use your stored energy to avoid pulling electricity from the grid when it costs the most.
Demand charges are also common for businesses and are becoming more common for homeowners. With demand charges, your utility company tracks your maximum energy pull from the grid during any given hour (or even 15-minute period) per month and charges you based on that maximum demand for the whole month. With a battery, you can lower your peak demand from the grid, driving significant bill savings.
If you want to install a home battery but are overwhelmed by the cost, rest assured there are plenty of incentives available that can significantly lower the price. Depending on where you live, you could break even on your home battery storage investment in less than a year. Here are some of the top battery incentives that will either reduce your upfront cost or increase your long-term savings:
In , a 10 kWh battery costs about $7,000 after the federal tax credit based on thousands of quotes through EnergySage. This price tag is high, but if you've determined that a battery is right for you based on your answers to the questions we outlined so far, it will pay off over time.
But if you live somewhere with net metering and a flat, non-time varying electricity rate, the only financial savings from installing energy storage come from avoiding outages or receiving any available state incentives. In those instances, you won't see any more bill savings from adding a battery to your solar panel system.
Millions of homeowners have installed home solar panels, and an increasing percentage are including batteries. More than 500,000 homes have batteries installed alongside their solar panels, including 28% of homeowners who went solar in .
Solar panels and a backup battery can provide electricity in a power outage and do so cleaner and quieter than a generator. When the power’s on, they can increase your solar savings. Backup batteries can be a great fit for some homes. Here’s how to find out if yours is one of them.
Home battery backups are being paired with home solar panels more frequently than ever before. This momentum is largely due to diminishing product costs, and battery prices are expected to continue falling through the end of the decade, according to research from the National Renewable Energy Laboratory.
In the US, 14% of new solar systems had energy storage backup included in . In , 28% of installations included a battery, exceeding the 25% predicted in research by Wood Mackenzie.
A home battery backup can operate in several different ways, depending on whether or not you have solar panels and if your property is connected to the energy grid.
Today’s home batteries give users full control over their energy storage and usage. Most home solar batteries are app-integrated, with intuitive monitoring and management controls that include several automated operating modes to help meet your energy goals.
As a homeowner, there are many financial, environmental, and lifestyle benefits of a solar and battery storage installation.
Without a battery, grid-tied solar panels shut down to protect the equipment and workers repairing damaged power lines. By adding battery storage to solar panels, you can island, or temporarily go off-grid, to run your critical devices with the energy stored in your sustainable renewable power system.
Solar power systems with backup storage give you highly dependable power in emergency situations. In , a Lawrence Berkeley National Laboratory study found battery backup with solar could be reliable in most areas of the US for most times of the year during a long-term grid outage.
Researchers found solar panels and energy storage would work to power the essentials (refrigeration, interior lighting, a few plugs, and well pumps) for a majority of homes affected by a lengthy power outage. Specifically, they found a 10kWh battery paired with solar could get virtually all homes through a three-day outage, if that home didn’t need its heating or cooling. The same storage size met 86% of the power load for three days if using heating and cooling.
The study found a 30kWh storage capacity could meet 96% of the power load during a 3-day outage, including heating and cooling.
Just as critical, the study showed backup power remains effective through longer spans. In most circumstances, solar panels will recharge the battery. Therefore, with the 30kWh storage, the batteries could meet 92% of a home’s power load at day 10 of an outage.
With a home battery backup, you can tap into your stored solar power any time you want, unlocking several benefits beyond preparedness for grid outages. By consuming more of the solar power you generate directly onsite and offsetting ongoing grid electricity purchases, you’re reducing your reliance on your utility.
In , 60% of utility-scale electricity in the US was generated by natural gas, coal, or another fossil fuel. Meanwhile, solar energy accounted for just under 4% of total electricity generation. A battery can help you avoid dirty grid energy and consume more carbon-free electricity at home.
Image source: SolarEdge
In areas with time-of-use electricity rates, a home battery backup enables smarter utility energy purchases. For example, let’s say your utility charges 30 cents per kWh during peak billing hours (from 3-7 p.m.), and 10 cents per kWh throughout the rest of the day. If you need to run your dishwasher, EV charger, or another high-energy-demand appliance during peak hours, you can avoid paying premium prices by discharging your stored solar power.
In areas without 1-to-1 net metering policies, like the net billing rates in California, Arizona, and Utah, energy storage and smart consumption habits can also help you recover the costs of going solar more quickly than systems without a home battery.
Typical payback periods for residential solar in California were 5-7 years. Under the new net billing program, the average payback period is estimated to be 10.7 years according to Wood Mackenzie in . But the payback period of solar-plus-storage systems could be significantly shorter. Wood Mackenzie calculated a solar-plus-storage system for a Southern California Edison customer could pay for itself in 7.5 years.
Finally, grid-sharing programs for home battery owners are now in operation and development across many parts of the US. These programs, like the ConnectedSolutions Battery Program in Massachusetts or the Renewable Battery Connect Program in Colorado, pay homeowners directly for discharging stored power to the grid during peak-demand hours.
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By tapping into a distributed network of customer resources, grid-sharing programs enable utilities to better balance power supplies throughout the day, while rewarding battery owners for their participation. Although programs vary across the country, participants in ConnectedSolutions with National Grid can earn an average of $1,500 per year in .
Virtual power plants (VPPs) — networks of energy-related devices and equipment working together to reduce demand or supply energy to the grid — are becoming more common in the US. A VPP coordinates devices like batteries, smart home devices, and electric vehicles, to ease stress on the grid at times of peak demand.
Deciding which battery backup system you will install is the most crucial step in the purchasing process. The ideal solution for your property will align with your energy goals and budget. To narrow down your search, let’s look at the two main motivators for home battery purchases.
Home energy backup: If you live in an area with semi-frequent grid power interruptions, or simply like to be prepared, a small solar battery can go a long way to keeping critical devices running. A smaller-capacity battery could be enough to power your essentials through a typical outage and come with a lower price tag.
Long-term savings: You might install battery backup to increase your savings from going solar by capturing and using more of your solar energy production or selling it to the grid when it's most valuable. In this case, your ideal battery size could depend on your local cost of electricity and the value of bill credits you could earn.
According to the National Renewable Energy Laboratory in the first quarter of , the average purchase and installation cost of a residential solar backup battery was $17,139. The price of your solar battery is heavily dependent on the storage capacity you choose, and project expenses can be broken down into the following categories.
As they become more common and manufacturing practices get better, battery prices will keep falling.
Break down of cost for residential storage. Source: National Renewable Energy Laboratory
To reduce the costs of home battery backups, there are many incentives, rebates, and programs available federally and locally for American homeowners. First and foremost, the Residential Clean Energy Credit (RCEC) can be claimed for up to 30% of total project costs on battery storage, solar panels, and several other home upgrades.
Locally, many states, cities, and utilities also offer one-time rebates for purchasing a home backup battery, with values typically based on the system’s energy storage capacity.
In North Carolina, Duke Energy gives a $5,400 rebate for battery storage, for qualifying lithium-ion batteries up to 13.5 kWh, and a $9,000 total rebate on a solar plus storage system. In California, the California Public Utilities Commission’s Self-Generation Incentive Program gives some customers a rebate of $1,000 per kWh of energy storage installed.
Each household’s needs and priorities are different, so the specifics of a solar system and energy storage as part of the system are customizable. Batteries can be a valuable addition to a home solar system, but won’t be cost-effective for every home.
Extra solar savings: Solar panels let you avoid buying electricity from your utility company, saving you money. In places where net metering credits are lower than the utility electricity rate, batteries can increase your savings by letting you avoid more utility electricity.
Emergency electricity: During an outage, batteries can provide backup electricity to power your essential appliances and devices. Solar panels can refill your battery during an extended outage.
More clean energy: A battery can let you store clean solar power to use at night when the grid’s electricity is often the dirtiest.
VPP participation: Virtual power plants aggregate devices like batteries to provide electricity to the grid when it needs it. Depending on the program, you might be compensated for the electricity you share.
Cost: Adding battery storage comes at a cost, but tax credits or rebates at the federal, state and/or local level may be available.
Capacity: Batteries are most likely to be cost-effective if they’re sized to only back up the essentials during an outage. You can install enough batteries to power your entire home but, depending on its size, it’ll cost you.
A home battery backup could be worthwhile if you live in an area, or are serviced by a utility company, with frequent outages. It’s also likely to make more sense in states or localities without net metering programs or VPP networks which are more valuable to the individual consumer. On the other hand, areas with rare blackouts or outages and poor or no incentive policies or programs might make home energy storage systems not worth the additional cost.
Depending on how highly you value having power through an outage, backup batteries may be worth the cost.
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What is the cost of a backup battery for solar?
According to the National Renewable Energy Laboratory in Q1 , the average purchase and installation cost of a residential solar backup battery was $17,139. Searching commercial sites gets you a range of about $9,000-$34,000 when including installation costs.
How long will a backup battery last?
A study from the National Renewable Energy Laboratory found lithium-ion solar batteries have an average lifespan of 7-10 years. Smart usage and maintenance of your system may extend battery life.
Is battery backup necessary for home solar?
No. Battery backup is growing in usage and decreasing in price as the technology improves, but many residential solar users do not have battery or storage as part of their systems. Without your own storage, grid-tied panels can’t produce electricity during outages, as the power generated has nowhere to safely travel when lines are down or in repair.
How long can a backup battery run my home?
A fully-charged 10kWh battery can run 86-100% of a home’s power load for a 72-hour span, according to one study. It depends on how many devices and systems are using power, especially the heating and/or cooling, and if the batteries are being recharged during this period.
What happens if I produce more solar power than I need?
If your home is connected to the grid and you’re located in a net metering area, any excess energy produced goes into the grid, and may earn you credit on your electricity bill. If you have energy storage with your solar power system, any excess energy produced and not immediately used by your household will charge your battery. This allows you to use stored power when energy usage exceeds production. Homeowners not connected to the grid often choose to increase their solar storage capacity to enable uninterrupted power regardless of weather or time of day.
If there is a power outage, will my power go out if I have solar panels?
If you add battery backup to your solar panel system, you’ll have access to backup electricity during an outage. If your solar energy system does not include a home battery, your power will go out in accordance with grid codes and mandatory inverter specifications.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
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