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3 Big Things You Should Know About Residential Battery Storage

Kyle Ritland

June 2018

tesla installer_generalResidential batteries are all the rage in solar right now. After all, adding energy storage can dramatically expand the effectiveness of a residential solar investment by allowing you to capture and deploy excess solar energy for emergency backup, or by squashing costlier on-peak rates.

Like solar, picking the right battery requires careful evaluation of many variables. Every homeowner uses energy differently and has totally unique goals and financial realities. Finding the ideal battery/solar combination is best done with the help of an authorized solar energy consultant. To get your creative juices flowing, here are three critical considerations when exploring batteries. 

1. There are two common battery configurations: Depending on your energy profile and goals, most Arizonans usually fall into one of two categories with batteries: critical load backup and self-consumption systems. Let’s look briefly at both.

a. A critical load battery backup system will run only your most vital energy devices in your home. These systems are setup to run only during a grid failure when your solar panels (if you have them) aren’t producing, like during the night or on cloudy days. Going this route generally requires fewer batteries and is therefore the lowest initial investment. If you choose to add your AC unit into your “must have” critical load list, however, you will dramatically increase the number of batteries you need and size of the initial investment. Systems in this category are used only in emergency outages and are not generally able to offset your utility bill in any way.

b. With a self-consumption system, you purchase just enough batteries to offset the most expensive on-peak utility hours, consuming what you store to reduce your bill during high cost time periods. You can also add additional capacity to keep your house operational during an extended power outage. These systems are more sophisticated and usually require multiple batteries. Unlike a critical load system, a self-consumption system is designed to directly impact your bill.

Download the Residential Battery System Guide

2. Grid interactive, or maximum grid independence: When deciding which battery to buy, one thing to consider is how and when you’d like to charge and discharge your battery for maximum benefit. Some batteries can only be recharged with solar energy. Others will accept grid power as well as solar. Let’s take a quick look at the most common offerings in each category.

a. LG Chem: The LG Chem has a capacity of 9.8 kWh and is highly programmable, allowing you to set up sophisticated recharge/discharge schedules. LG Chem batteries will accept solar OR grid energy, giving you the option to scoop up and store low-cost nighttime power in addition to solar. You can then use this low-cost stored energy to offset higher cost daytime hours, while pushing any excess back to the grid in exchange for energy credits (assuming your utility offers net metering or a similar energy buyback option).

b. Tesla Powerwall: The Tesla Powerwall offers higher storage capacity at 13.5 kilowatt-hours. The Tesla also differs in the way it addresses schedules and programming.  The Tesla uses “smart” technology to learn your usage patterns, then automatically optimizes recharge and discharge cycles for maximum offset. The biggest difference, however, is that the Tesla Powerwall will in it's current form will only recharge with solar energy when paired with a solar panels. In other words, a Powerwall will always prioritize clean solar power, and will only accept grid power when solar panels are NOT part of the overall system. So, depending on your charge/discharge schedule, you could run into a problem filling a Powerwall to capacity if you have solar panels as part of your system, and clouds or seasonal darkness limit daytime solar production. Like the LG Chem, the Powerwall can also send excess energy back to the grid in exchange for energy credits.

3. Price depends on your goals, energy profile, and local incentives: When looking into batteries, it’s important to first determine what it is you’re trying to achieve. If offsetting your utility bill is your goal, rather than just providing emergency backup, you’ll probably need to purchase multiple batteries. Incentives also make a big difference, but they’re only available for a limited time. In Arizona, we currently have two.

a. The 30% Federal Tax Credit (ITC) can be applied to any battery setup to charge from solar panels. The 30% ITC is only available through the year 2019. In 2020, the incentive drops to 26%, then drops again to 22% in 2021 before ending permanently for homeowners in 2022.

b. SRP currently offers an incentive of up to $1,800 ($150 per DC-kWh) for residential customers who purchase and install qualifying battery storage systems. The incentive is only available for up to 4,500 SRP customers on a first-come, first-served basis during a 36-month period, beginning in May 2018.

A certified battery installer will be able to analyze your home and energy usage to determine if a battery makes sense for you. With incentives available only for a limited time, now is a good time to reach out for a custom quote. We also invite you to download our complimentary guide to residential battery systems.

Download the Residential Battery System Guide