Battery storage is the fastest growing market segment in solar, creating new markets as well as solar retrofit expansion opportunities across the USA for renewable projects large and small. Batteries allow the solar array to maximize savings on the electric bill and provide backup power during grid outages. Every offgrid solar array includes a battery, but an increasing number of grid-tied customers find them valuable as well. Energy independence has never been easier to achieve – even when the home remains connected to the grid.
Are Home Batteries Worth It?
Residential battery storage is necessary for a solar-powered home to remain operating during grid outages and will also work at night. But also, solar batteries improve system economics by storing solar electricity which would otherwise be sold back to the grid at a loss, only to redeploy that electricity at times when electricity is most expensive. Household battery storage secures the solar owner from grid outages and protects the system economics against changes in utility rate structures.
Customers who receive terrible buyback rates from the utility need electricity storage for home in order for their systems to be cost-effective. But net-metered customers with good buyback rates still use batteries for grid outages, and can find economic benefit in abandoning net-metered solar rates for variable rate structures that reward off-peak consumption such as cheap night time electric vehicle charging. Markets without net-metering can finally have economic solar, and net-metering customers needn’t buy off-grid sized batteries in order to keep the lights on during grid outages.
Homeowners expect their solar arrays to work during power outages, and adding a battery makes sure that customer expectations are satisfied. It also protects the customer against future changes to electric rate structures.
How Much Is a Solar Home Battery?
Home battery storage projects start at $20k and can get more expensive from there. Add in solar, and quality solar battery storage system cost by licensed professionals can start at $35k and can exceed $100k for whole house off-grid capability. Proper understanding of battery system design is critical in delivering a project that meets client expectations within budget.
Battery projects can be very economic when the utility provides an extremely variable rate structure, such as a high kW demand charge or a <5 hour time-of-use peak electric rate. However, do not discount the value of home energy storage in rural areas where electricity costs might be low, but power outages are somewhat frequent. Likewise, retirees planning to live at home rather than in assisted living facilities want backup power, at least for refrigerators, internet, and a handful of outlets in the kitchen and bedroom. So while some battery projects can outperform solar in terms of economics, other customers are willing to accept longer paybacks for projects with batteries compared to those without.
Factors to Consider for Your Home Battery Storage
Not all battery storage technology is equal – this section and each sub item below should explain what is worth considering when determining what battery technology to go with for one’s home.
Many lithium home battery storage systems come with ten year warranties, but not all come with throughput warranties that allow for full daily cycling within warranty term. It is particularly important for users with variable rate structures or those who lack net-metering to be able to use their battery daily, rather than solely as backup. Likewise battery cycles are difficult to track – a throughput warranty based on kilowatt hours is a better defined warranty.
The fire safety aspect is important as well – lithium iron phosphate combusts at a substantially higher temperature than lithium cobalt. The longer life and increased fire safety are the primary reasons lithium iron phosphate is preferred over lithium cobalt.
Ease of installation is also important. A larger battery can eliminates the need for combining smaller batteries together in the field. But smaller batteries offer more flexible installation options, which may justify the increased installation cost.
Smart Energy Management
The advent of new energy market technologies like Lumin have introduced a new hardware that can hook up to any electrical system. “Smart circuits” like Lumin can benefit any home battery system, especially one as robust as Fortress where whole home battery backup can become a reality by making the circuits that feed the batteries smarter.
Batteries with ten year warranties are protected against a variety of inrush and overcurrent scenarios as well as voltages fluctuation, through its internal battery management system. Ultimately the battery needs to be sized correctly for both total storage capacity as well as instantaneous power draw to ensure long-term, reliable performance. A common design error is to put too small a battery on too large a load, such as when designing a short duration, whole house backup system.
Lumin’s smart panel adds the intelligence needed to decrease maximum coincident load, for example, enabling the customer to use an electric tank water heater only when the air conditioner or laundry is offline. Without such intelligence, the loads must be added together when determining inverter output capability, which increases the minimum battery bank size. Electric code requires backup power systems to be able to reliably power the system they supply, and so adding smart load control to a home enables more of the load to be connected to the backup power system. And the benefits extend over to grid-tied operation, by enabling the same loads to better coincide with off-peak time-of-use rates as well as times solar production. In short, adding load control to solar plus storage results in a complete energy management system.
kWh Storage Capacity
While the average home in the USA uses 11 MWh of energy annually, the real amount varies significantly based on location, the size of the home, and whether or not the home is 100% electric. In general, a minimum of 2 kwh of storage is needed for every 1 kW of battery inverter output capacity, although this ratio can be reduced with “closed loop” battery communication systems as well as with smart load control, particularly on larger residential systems. Managing the load in a smart manner can result in a difference of over ten thousand dollars on minimum battery bank sizing for large residential whole house backup.
For clients where budgets are limited, understand that an 8kW inverter cannot power a 10kW air conditioner unit. Even if the unit only draws 3kW during normal operation, if it has a 10kW rating then at some point it will draw 10kW of power (such as when defrosting the indoor unit during periods of heavy summertime use). Even if two 8kW inverters are stacked to provide 16kW of power, it can be easy to overload a backup panel. Hot water tanks are commonly 8kW, and so a hot water tank and central air conditioning unit could not share a 16kW backup panel without smart energy manager being installed. To avoid a costly project, the client should prioritize critical loads rather than pursue whole house power, but smart load management allow more loads to be connected to the critical load panel without overloading the inverter. While most customers want zero electric bills and 100% offgrid capability, most solar homes consume 30 kwh of electricity each day – or more! Most off-grid homes require multiple days of storage as well! However, most grid-tied home power storage is intended for shorter duration outages, or longer duration at reduced loads. A smart energy manager can balance the customer demand for the most amount of devices being protected on the backup circuit, while enabling smaller battery sizes which are budget friendly.
Outdoor or Indoor Installation
Batteries can degrade by exposure to moisture, dust, and temperature extremes. However, space constraints can still force the batteries outdoors. Luckily, home energy storage can be installed both indoor and outdoors.
When installing outdoors, it is important to consider the environmental rating of the battery itself. While the installers should do what they can to protect the battery, an IP65 rating means the battery can tolerate direct water spray and be installed in a dusty location. When installing indoors, protected locations inside the garage can offer easy access for larger batteries, whereas smaller batteries are more flexible for wall mounting in hard to reach locations such as basements.
Home Battery Cost
We know that sometimes cost per Kwh can take precedence over the other benefits and aspects of home battery storage – explain what should be considered when determining costs vs what the product provides.
Lithium battery cost can be estimated based on specification sheets, but other values to consider when making a battery purchase are warranty and technical support. Most solar installers rely upon solar module warranties to never be used, as triggering a solar module warranty can be a logistical hassle. But the battery storage technology budget can be over twice the cost of the solar panels, comparatively. Consider giving the battery manufacturer technical support department a phone call ahead of a project, for a quick evaluation of the proposed design to evaluate the level of service you will receive if you ever need to trigger a battery warranty. The serviceability of the battery itself can also be important. If a component within the battery management system fails, can it be field serviced by an installer or will the entire battery need to be shipped back to the manufacturer? Remember that a ten year warranty requires a manufacturer that provides a quick response time to service issues.
Lead acid batteries are too costly to daily cycle, due to operating inefficiencies. Lithium is a more efficient technology, with losses associated with charging and discharging being less than 2%. Oddly enough, efficiency in an off-grid system is not incredibly important, as an excessive amount of production and home energy storage capacity is needed to power the system reliably. Efficiency becomes much more important for grid-tied daily use batteries because the economics of the system are more important.
Selecting a Home Battery Storage System
There have never been more options for battery chemistry or home energy storage design. Lead acid, the historical mainstay offgrid battery systems, faces tough competition from multiple lithium battery chemistries. Meanwhile new grid-connected applications of batteries have already eclipsed the size of the offgrid market. With batteries being the most expensive part of a residential solar battery, and new products deviating from traditional offgrid design, it is important to understand various design choices in order to meet customer expectations within the project budget. Here are some primary factors to consider.
1. Lithium-Ion Battery Technology
Lithium iron phosphate batteries are becoming an industry storage standard because of improved longevity and safety compared to previous generation lithium cobalt batteries. Homeowners wanting peace of mind regarding fire safety, as well as a battery that can be used every day under a 10 year warranty to lower the electric bill, should select this battery chemistry over lead acid or lithium cobalt. Fortress Power, Blue Planet, Discover, and Simpliphi are popular manufacturers of these batteries. While these manufacturers all use lithium iron phosphate chemistry, their products can be further differentiated by price, kilowatt hour throughput warranties, battery management system quality, enclosure ratings, supply chain logistics, and availability of technical support.
Compared to other chemistries, a lithium iron phosphate battery offers the following values:
- Efficiency: Charging and discharging the battery has a 98% total cycle efficiency, while being rapidly charged and discharged in time frames of less than 2 hours – or even faster for a reduced life.
- Storage Capacity: Single lithium iron phosphate battery packs can be over 18 kilowatt hours, which can reduce or eliminate additional balance of system material used for combining batteries together. But smaller batteries are also available for portable battery systems.
- Battery Cost: Lithium iron phosphate tends to cost more than lithium cobalt, but typically has a lower cycle cost due to greater longevity
2. Lead Acid Battery Storage
Lead acid batteries have been the traditional home battery storage technology for living off-grid with multiple days of storage, but have shorter lives and are costlier to use than lithium batteries. There is a wide selection of lead acid batteries available at different price points, made by manufacturers like Hawker, Crown, Trojan, Rolls, and Deka.
Here are some common features:
- Efficiency: Lead acid batteries are less efficient than lithium. While the efficiency depends upon the rate of charge, an 85% round trip efficiency is often assumed.
- Storage Capacity: Lead acid batteries come in a variety of voltages and sizes, but can weigh 2-3x as much as lithium iron phosphate per kilowatt hour, depending on battery quality.
- Battery Cost: Lead acid batteries are about 75% cheaper than their lithium iron phosphate equivalent, but don’t be fooled by the lower cost. The batteries cannot be charged or discharged quickly, have shorter lifespans, lack protective battery management systems, and can require weekly maintenance. This results in overall higher costs per cycle beyond what is practical for lowering an electric bill or supporting heavy appliance loads.
3. AC-Coupled Storage System
AC-coupled storage systems are when the solar array has a separate inverter from the battery. This can be a great solution for retrofitting onto existing homes with existing solar arrays that lack . While DC-coupling has its merits (and can be done in conjunction with AC-coupling) one advantage of AC coupling is that the home can use the combined power of the solar array and battery inverter during the day. SolArk, Schneider, SMA, Outback, and Magnum all make inverters which support AC-coupled configurations.
These battery inverters share the following:
- Efficiency: Battery inverter efficiency ranges from 93%-97% depending on the whether or not the inverter includes a transformer. While transformerless inverters are more efficient and less costly, a transformer can be useful in regulating power quality for off-grid systems.
- Storage Capacity: Many of the above systems are “stackable” meaning the inverters can manage hundreds of kilowatt hours of storage, and combine together to service even large commercial electrical loads. The battery bank is typically sized for running the inverter at full capacity for two hours, typically.
- Inverter Cost: Battery inverters both charge and discharge, whereas batteryless solar inverters only push power in one direction (out from the solar array). This means that battery inverters cost almost twice as much as solar inverters! Some battery inverters are “all-in-ones” which combine the solar array and battery together, which can result in some cost savings during new construction.
4. DC-Coupled Battery Systems
DC-coupled battery systems use DC charge controllers to charge the batteries from the solar array, rather than AC-coupled inverters. This has been the traditional method of charging off-grid solar. Because charge controllers are connected directly between the solar array and battery, the battery can charge without the inverter, which is useful if the battery is discharged to the point that it cannot power up the inverter to begin an AC-charging process. While a backup generator can also be used to avoid this scenario, DC coupling remains popular for its traditional simplicity. It can also be used in conjunction with AC coupling. Charge controllers are made by Morningstar and Midnite, as well as by battery inverter manufacturers Schneider, Outback, and Magnum.
DC-coupled systems can be useful for:
- Efficiency: Charge controllers have efficiencies up to 99%, so these battery systems are often more energy efficient than AC-coupled solutions
- Storage Capacity: While most charge controllers can handle home storage batteries of various capacities, it can be difficult to find a charge controller that matches the 600V design specification of most residential solar arrays, which is then converted down to the 48V capacity of most residential battery banks.
- Charge Controller Cost: Technically, charge controllers should be cheaper than solar inverters, which implies that DC-coupling cheaper is cheaper than AC-coupling. However, solar inverter manufacturers have greater production volumes than charge controller manufacturers, and so the actual cost of either option is about the same and becomes a matter of installer preference. “All in one” battery inverters contain built-in charge controllers, and so are typically the lowest cost option for a solar-powered battery.
Which Residential Battery Storage is Best for Your Home?
Regardless of whether the system uses AC or DC coupling (or both), lithium batteries are the clear market leader for grid-tied energy storage systems, and are replacing lead acid batteries in off-grid installations as well. While the low cost of lead acid can be tempting, its inferior performance on heavy loads and at low states of charge can result in power quality and maintenance issues, creating issues for homeowners precisely when the electricity is needed most.
Offgrid loyalists who have found great success with large lead acid battery banks should consider the merits of a smaller lithium iron phosphate batteries and take advantage of backup generators during cloudy weather. But grid-connected homeowners who want maintenance-free operation, lower electric bills, and a 10 year warranty will find a better fit with lithium iron battery chemistry, even if they must be selective in which loads they backup for short duration grid outages.