Solar Dominates, Batteries are Needed
Batteries and energy storage will be hot energy topics of conversation and R&D throughout the 20s. . . not solar. Solar has already proven itself to be the most cost-efficient energy generator.
The biggest problem with solar is not the cost to produce the energy but what to do with the energy at the time of production.
Solar produces the majority of its energy during the same 4-6 hours every day— we call these peak sun hours. However, we pesky humans tend to have the highest energy demands in the evening when the sun doesn't shine.
This is where batteries dominate. We overproduce midday, and batteries help spread the energy out into the evening hours and early morning until our panels can begin generating all over again.
Batteries should be viewed as a solution for 2 scenarios:
- Time of Use - Spreading out your energy production throughout the day
- Off Grid - Complete energy independence, large battery systems to literally and figuratively weather storms
Batteries for Time of Use
One of the most common requests from Project Solar customers is for us to sell them a battery to go "off grid."
In reality, going off grid requires much more than a single battery—more on this later in "Sizing for Off Grid."
People generally add 5-20 kW worth of batteries, primarily for optimizing time of use.
The majority of homes are connected to utility grids that charge different rates based on the time of day the energy is being used. So, early morning or midday are usually the cheapest times, and then energy rates can skyrocket in peak hours, often 5-10 pm—the time when people are home from work using their TVs, dryers, AC, and other power equipment.
Most homeowners strategically size their solar systems to generate close to as many kWh's a month as they use, but that can leave them overproducing at the times of highest production and underproducing at times when they use it most.
Batteries smooth this out since they algorithmically optimize when to use battery power to minimize your pull on the grid during the expensive peak times, which can result in significant money savings.
Let's look at an example. If your daily consumption is 40 kWh, and you have an 9 kW system, your solar should generate enough energy to offset your bill if you have a 1-to-1 net metering agreement (9 kW * 4.5 sun hours = 40.5 kWh). For those with low net metering rates (looking at you, AZ), pairing your system with a battery should make it so YOUR solar-generated energy lasts the entire day.
Without a battery, you risk selling your excess energy back to the utility at the wholesale rate and then buying it back at the retail rate (in states with unfavorable net metering policies) when needed.
Cost of Batteries
Batteries are great. . . in theory. Currently, their prices are horribly prohibitive. The two most popular battery solutions, Tesla and Enphase, are about $1,000 per kWh of storage or about $1/watt.
Here's a general estimate for how much battery capacity you will need:
For every 5 kW of solar, you'd need 10 kWh of storage. Other details like amp load of heavy duty equipment may affect this number, especially on the smaller single 10 kWh battery systems.
Keep in mind that adding a battery, especially relative to our low cost solar solution at Project Solar, can sometimes double or triple your grand total.
After-incentive example: A fully installed 10 kW system with Project Solar would cost about $14,000. This would require about 20 kWh of battery storage capacity, which would add about $18,000, bringing your total to $32,000.
Determining if a battery makes financial sense is the big question. For most, it does not when strictly reviewing ROI. A general rule of thumb for determining IF a battery makes financial sense for you is to subtract your kWh rate from your net metering credit rate (in UT it's 10¢ - 6¢ leaving a 4¢ net).
If the net rate is lower than the 6¢, then we'd advise no battery. Remember, in most states with tiered prices based on consumption, your overage will most likely be billed in the lowest and cheapest tier. Use this lower price as the starting point.
Sizing for Off Grid
With the recent chaos in Texas and the frequent blackouts in northern California, demand for "off grid" has never been higher.
However, we need to define what "off grid" actually means.
Unless you are completely disconnected from the grid and fully reliant on solar and batteries, you are not technically considered off grid. It is important to be aware that many states discourage off-grid living through local laws and regulations.
Having 1-3 batteries (10-30 kWh of storage) could certainly cover the majority of your energy usage, spreading out what you collect from solar into the evening and early morning when the sun is not shining.
However, unless you have enough capacity to cover you through a winter storm, you won't have enough to be "off grid" and truly disconnected from city power. You'll still be 90% + (weather permitting) energy independent, but off grid typically requires a much heftier investment.
The rule of thumb when designing an off-grid system is to have 2-3 days worth of storage. To calculate this, simply look at your monthly kWh usage and divide by 30 to get your daily usage rate. Then multiply by 2-3 (days), and that is your storage need.
For example, I use about 2,100 kWh a month at my house. 2,100/30 = 70 kWh a day on average. Multiply that by 2.5 (I'm in UT which is relatively sunny), and that equates to 175 kWh of needed storage. At $1,000/watt, that's $175,000 if I opt for standard lithium ion batteries.
Most people looking for true off-grid solutions do so for mountain homes or other remote locations where grid tie wouldn't even be an option if they wanted.
Off-grid homes are usually smaller, and most will opt for lead acid batteries over lithium ion. Lead acid batteries are a little more high maintenance and can't necessarily compete with a lithium ion battery's longevity, but they are considerably cheaper.