It used to be that a typical grid-tied solar electric system only worked when the grid worked. If a storm took out the power lines the homeowners ended up in the dark, despite those shiny panels on the roof.
That's changing thanks to more efficient and cost-effective battery technology, as well as to utility involvement. Greentech Media Research (GTM) estimates that for the first time, total installed home battery capacity of 15.9 megawatts has reached near parity with utility-scale deployments of 16 megawatts.
It's on track to get even bigger. "The residential [storage] market this year is going to be over five times the size of the market last year," said GTM Senior Analyst Brett Simon. And while California and Hawaii account for 74 percent of that capacity, installations are also growing elsewhere, with products from companies that include LG, Panasonic, Samsung, Sonnen, and Tesla.
Electric utilities are helping to drive this growth. For instance, Walpole, NH-based Unity Homes recently built a home in Guilford, Vermont with a 10-kW solar system and a Tesla Powerwall 2.0 battery supplied by Green Mountain Power (GMP) at an installed cost of $1,500. GMP Communications Director Kristin Kelly says that the batteries usually cost $7 to $8,000 installed, but that the utility wants to create a distributed storage grid it can draw from during peak demand times. It began installing batteries in late 2017 and will have 2000 in place by the end of 2018.
Of course, most homeowners expect tangible benefits from that $1,500, so it's no surprise that most batteries are going into rural homes where winter storms often cause outages. The batteries provide an estimated 8-12 hours of backup power, and the subsidized cost makes them cheaper than a whole-house generator.
Outage protection certainly drives demand for storage where there's severe weather, such as winter storms in New England or hurricanes in Florida and the Gulf states. But without a utility incentive, they can still be a hard sell. For instance, Sean Buckley, Owner of Harvest Sun Solar, a solar installer in Tisbury, Mass. says that with no subsidy only 10% of his customers have been willing to pay full price for a backup battery.
If customers in Buckley's market didn't pay a fixed electric rate, he might get more interest. According to Energy Sage, an online solar energy marketplace, natural markets for storage are where the utility’s rate policy includes any of the following: time of use rates, demand charges, the lack of net metering, or net metering reimbursement based on avoided rather than retail costs.
Staying Under Threshold
Some utilities charge customers a higher rate if they exceed an energy use threshold. Others have net metering arrangements that don't reimburse homeowners at the retail rate but rather at avoided cost—what the utility would pay to buy or generate that power.
Both apply in the Milwaukee area, where Tim O'Brien Homes recently broke ground on Wisconsin's first Zero Energy neighborhood. Homes at Red Fox Crossing in New Berlin will be certified under the Department of Energy’s Zero Energy Ready Home program as 40% to 50% more efficient than a typical new home. They will also include rooftop solar panels.
While these homes don't include battery storage, Craig North, the company's VP of Product Innovation and EEBA board member, says the company plans to include it in future projects. "Our utility providers have put a tariff on over-production of solar electricity," he says. "Homeowners also only get 25 cents on the dollar for excess power put back into the grid."
Avoiding Peak Rates
In time-of-use areas, the system can be configured to avoid buying power when it's most expensive. That describes much of California. "The differential between Summer on-peak and off-peak in San Diego is as high as 32 cents per kWh," says Michelle Mapel, Senior Director of Sales and Marketing at battery-maker Sonnen. "If you can use the battery for the four hours of peak, you will definitely save money."
That potential savings led Bakersfield, California builder Dave Packer to complete a Net Zero Electric model home with solar panels and a Powerwall 2 battery system. When Pacific Gas & Electric's rates are low in midday, excess power from the panels flows into the battery until it's fully charged. The home can draw from this stored power in late afternoon and early evening when rates triple. The battery also provides backup power but Packer says that outages in his area are rare and short-lived.
PG&E, like Green Mountain Power, offers batteries at a subsidized rate of $1,500, which Packer believes will motivate more homeowners to buy.
Even with time-of-use rates, a lot of homeowners aren't going to pay $7,000 or more for a battery option. Gene Myers, CEO of Thrive Home Builders in Denver, and EEBA Board President, has a solution. Rather than a battery option, put them in all homes and build the cost into the selling price.
Thrive will certify all of the 240 homes it completes this year under the Department of Energy's Zero Energy Ready Home program. All homes include rooftop solar panels and a storage battery on a wall in the garage.
The battery helps mitigate time of use rates and provides backup power. One battery can handle basic lighting, the refrigerator and freezer, as well as enough outlets to charge electronic devices. It won't run the heat pump, but Thrive's homes all have backup furnaces.
So far there hasn't been any customer pushback. "Having a Zero Energy product is part of our brand," says Myers. However, he also admits that given his homes' price point of $500,000 and up, the extra cost isn't the big deal it would be in a lower-priced home.
Thrive Homes in Denver is one of a growing number of builders who are outfitting homes with solar panels and storage batteries. Shown here: the ZEN model.
Thrive isn't the only company that has decided to make batteries standard. Sonnen is working with Mandalay Homes in a 2,900-home development in Prescott Valley, Arizona. Every house will have an individual solar system and a battery that together add about one percent to the home cost but save the homeowners 20 to 30 percent on electricity, thanks to a utility policy that gives a lower rate to customers who can completely power their homes for a portion of the day.
Mapel says that Sonnen is negotiating with the utility to configure storage in other communities in a way that meets the utilities' load-shifting and other needs.
In Birmingham, Ala., the utility has actually taken the lead on a community-wide storage effort. Alabama Power is working with Signature Homes on a 62-home "Smart Neighborhood." It will include enough solar capacity to run all the homes, which will have HERS scores of around 45, or 35 percent more efficient than standard new Alabama homes. It will also have Samsung lithium-ion battery storage.
What makes the Smart Neighborhood unique is that rather than being installed on individual homes, the panels and the storage will be centralized in a 2-1/2 acre site, creating what the utility calls a microgrid. Customers won't be able to switch to battery power during peak demand times but have agreed to let the utility adjust their loads to reduce total electric use via smart thermostats and other controls.
Jim Leverette, a Research Engineer with Southern Company, Alabama Power's parent company, says that the utility envisions battery-enabled microgrids as part of homebuilding's future, and is using the neighborhood as an R&D project. "We want to evaluate the pros and cons and to get a better understanding of technical challenges."
Batteries such as those from Sonnen help mitigate peak demand charges and act as a backup power supply. They also look good.