It’s 2020. Can we run off-grid mansions staffed by AI robot servants using only solar panels and Tesla Powerwall batteries yet? Not quite, but you’re not alone if you got a little excited by the thought.
Recent research indicates that 74% of people shopping for home solar power are also interested in home solar battery storage. And while fewer than 20% of people who buy solar end up with a battery to go along with it, there are signs that might be changing soon.
Spearheaded by the Tesla Powerwall, home battery storage is cheaper than ever. New incentives available both nationally and in certain states are making going solar with batteries a smart move in more ways than one. The dream of powering your home with off-grid solar is still not quite “financially advantageous,” but having a battery in your home to save money on peak electricity costs and keep the lights on during a blackout is a reality today.
If you’re already considering solar and you want to know about home energy storage and incentives, connect with one of our partner installers to get more details. If you’re ready to learn more, let’s delve into what home energy storage can do for you, and look at the places where it makes the most sense now.
What are home solar batteries?
People have been using lead-acid batteries (like you might use in a car or boat) for off-grid solar storage for decades. They can be strung together in solar battery banks to store more energy than you might think, but they’re heavy, huge, and labor-intensive, making them impractical for use in the average residential setup. Of course, the exception to this rule is an off-grid application like a cabin or tiny house with very small energy needs. We cover those applications in the off-grid section of our website.
What kinds of batteries are available for homeowners?
When we talk about modern “home energy storage,” we’re talking about the raft of newer technologies that are specifically designed to make home energy storage easy, smart, and relatively unobtrusive. This includes lithium-ion, flow batteries, and saltwater batteries.
When it comes to home batteries, this is the gold standard. The technology is mature and trusted, having been the driving force of the smartphone, hybrid- and electric-car revolutions. When it comes to home energy storage, the most practical solutions come from this category, and include offerings from Tesla, LG, Panasonic, Sonnen, and SimpliPhi.
Lithium-ion batteries are used in installations by some of the biggest solar companies in the USA. If you get solar installed by Tesla, Sunrun, Vivint, Civic Solar, and even many smaller companies, you’ll likely have the option to add a lithium-based solar battery to your installation.
One limitation of lithium-based batteries is called “depth-of-discharge,” which refers to how much of the battery’s capacity can be drained at any given time. Lithium batteries can be relied-upon to provide around 8,000 charge-discharge cycles, provided the battery is not discharged by greater than 80% of its capacity. If the depth-of-discharge gets as high as 90%, the battery’s lifespan might be reduced by 25%, providing 6,000 instead of 8,000 cycles.
Still, given a daily cycle, that could mean a practical lifespan of 15 to 20 years, if nothing else breaks. Unfortunately, most lithium-based home batteries are warrantied for 10 years or less, so you take a gamble on the continued reliability of the battery after that point.
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Instead of relying on a lithium-based chemistry, flow batteries use a liquid electrolyte that’s pumped across a membrane. Theoretically, these batteries work very well, and can be charged and discharged up to 100% of capacity. Practically, the moving parts inside the battery can fail after a time, and tiny amounts of impurities in the electrolyte can have profound effects on battery lifespan.
The most well-known flow battery company, RedFlow, halted sales of its residential flow batteries in 2017 due to various problems, including electrolyte impurities and other defects. You might not be seeing many flow batteries in homes, at least for the foreseeable future.
If you’re interested in solar power for the environmental benefits, have we got a battery for you! Aquion, an American company with a commitment to environmental stewardship, has developed a battery based on a unique, non-toxic saltwater blend. The Aquion battery can be discharged to 100%, and though it’s bigger and bulkier than other batteries with similar capacities, it’s a technological marvel.
But the company is still around, having emerged from bankruptcy in July of 2017, and while they still haven’t begun offering new residential batteries, they’re working on round 2. You can decide whether the prospect of waiting for an environmentally-friendly battery from an American company is worth the wait, the risk of losing warranty protections again, and the potential for other bumps along the way.
What can home solar batteries do?
Now that we’ve established that you’re probably looking at a lithium-ion battery from one of the major companies, let’s explore why you’d even want one of the things. First and foremost, home batteries can provide peace of mind, because they can protect you during a power outage.
Solar-plus-battery installations installed by Sunrun, Tesla and others in Puerto Rico after hurricane Maria in 2017 have kept the lights on there in critical applications for hospitals and fire stations, both immediately after the storm, and more recently, as the island’s power grid was knocked out in April, 2018.
Having the lights on at your home when your neighborhood is hit by a power outage has a value that can’t be expressed in terms of money, which explains why some folks have been willing to pay thousands of dollars to add batteries to their home. But there are other benefits of home energy storage that can be quantified.
Save with solar self-consumption
One of those benefits is ensuring that you’re the end-user of all the solar energy your system produces. In states with net metering (NEM), that isn’t a big advantage, because under NEM you get paid the same retail price for any solar energy you send to the grid, and draw power from the grid when the sun isn’t shining.
If, however, your state doesn’t have NEM, it could mean that you’d be credited just a few cents per kilowatt-hour (kWh) for that energy, making your solar payback equation start to look a little iffy. With a home battery added to your solar panel system, you can use every last drop of that sun juice to power your home, and never send any back to the grid. Granted, it’s not as good of a deal as solar in NEM states, but it’s a heck of a lot cheaper than spending millions to lobby your state legislature.
In the image above, we estimate the impact of a home battery system used alongside a 6-kW solar system in a state that has no net metering protections. The home uses about 900 kWh of electricity per month, which costs $126 before solar. A 6-kW system generates about 750 kWh per month in this example, but only half of that is used to power the home, saving the homeowner $52.50 per month. The rest of the solar energy is sold to the utility at a wholesale rate of 4.5 cents per kWh, meaning it only earns the homeowner $16.88 per month, and leaves them with a bill of $56.63.
In the next example, the homeowner uses a home battery to ensure all 750 kWh of solar is used to power the home during the month, saving the full retail price of $105 for that electricity, and resulting in a final bill of just $21. The additional savings from the home battery end up being about $35.62 per month, or $427.44 per year.
That’s pretty decent, and given an average battery warranty of 10 years, cold lead to ~$4,000 in additional solar savings. Of course, if the homeowner lived in a state with net metering, the financial return of the battery would be nil.
Save by taking advantage of time-of-use
The second way you save money with a home battery is by avoiding the high cost of on-peak electricity under a time-of-use (TOU) billing plan. On a TOU billing plan, electricity is cheap when most people aren’t using it (i.e. nights and weekends), and more expensive when they are. Most TOU plans charge the highest prices during the afternoon and evening hours, when people are cook, watch TV, and wash and dry their clothes. Oftentimes, TOU rates vary by season, with higher prices and longer peak hours in the summer when air conditioning causes extra-high spikes in energy usage.
Here’s an example of how TOU works using past rates from Southern California Edison’s TOU-D-B schedule (subject to change, of course):
You can save money with a home battery by setting it up to charge only from electricity produced by your panels or from both the panels and the grid. In either case, the key is to discharge the battery when electricity is the most expensive. By completely removing your on-peak use, you’re effectively bringing your electricity rates down, to as low as off-peak prices if you can swing it.
Using the rates above as an example, you can charge the battery for $.13/kWh and discharge it when you would have spent $.33/kWh, you’re saving $.20/kWh during peak times, every day. Or maybe you’ve got solar panels pumping electricity out to the grid during the sunniest hours of that peak time, meaning you’re earning that $.33/kWh for your energy, even as your battery meets your home’s energy needs.
So now you know a little about how much you could see using a home battery, but how much does a home battery cost, and is it worth it? Let’s find out.
How much does home energy storage cost?
It can be difficult to estimate the costs of home energy storage, because the same battery might be available from multiple suppliers. For example, you can buy a Tesla Powerwall battery with the installation of your Tesla solar panels, get it installed by a different solar installer, or buy it yourself from a third-party supplier and have an electrician do the installation, with or without a home solar system.
The price for each of those methods could vary quite a bit, and of course batteries from other companies come in different sizes and each have their own costs. Therefore, the way to compare the costs associated with home energy storage is on a dollars-per-kWh basis, which, given that the batteries’ capacity meets your needs, puts them all on an even playing field.
To compare to the kinds of savings you might see, let’s take a look at a few of the main competitors and see where their prices come in.
Cost of the Tesla Powerwall home battery in 2020
Tesla is one of the main competitors in the home battery space, and, outside of the solar industry, the one that grabs the most headlines. The Powerwall 2 is a 13.5-kWh battery with a 10-year warranty, and like we said above, you can get it installed by Tesla either as a standalone energy storage or along with your Tesla solar panels.
The current pricing listed on the Tesla website shows the Powerwall on offer for $5,900, plus $700 in support hardware and “$800 to $2,000” for installation. Choosing the mean of the install price brings the grand total for a Powerwall to $8,000, or about $600 per kWh.
Compare that to the estimated savings of $4,000 in ten years outlined in our example above, and you get a net of $4,000. Is that worth it to you for 10 years of battery backup in the case of an outage? Of course, if you want to run your whole house during a power outage for more than a few hours, to paraphrase Chief Brody, you’re gonna need a bigger battery. That might mean two or three Powerwalls, at a cost of around $6,600 for each additional unit.
Cost of the Sunrun Brightbox in 2020
Sunrun, which offers a 9.8-kWh LG home battery it re-brands as “Brightbox,” is a solar installer operating in 22 states, although the battery isn’t available in all of them. The battery costs between $6,500 and $8,000 as an add-on to a new Sunrun solar system, depending on whether you purchase or lease your solar system. That averages out to around $660-$800 per kWh.
It’s important to note that Sunrun does not sell the battery as a standalone or after-install solution, but only in addition to a new solar system purchase. Like the Powerwall, Sunrun offers a 10-year warranty for Brightbox, but also offers a 20-year service plan for an additional monthly charge, which covers Brightbox alongside its solar system.
Here’s a secret, though: the BrightBox is really just a re-badged LG Chem Resu battery, which can be had for around $6,000 retail, if you can find one in stock somewhere. That means Sunrun isn’t selling anything exclusive except for its name, service and software. Any ol’ solar installer can get their hands on one of these and put it on your garage wall.
Heck, Vivint does it.
Other home solar battery costs in 2020
Other battery manufacturers like the German company Sonnen, California battery maker SimpliPhi, and Maine’s own Pika Energy offer home batteries in at least some parts of the United States. Sonnen’s are prohibitively expensive, with costs around $9,800 for a 4-kWh model (a whopping $2,450/kWh), but they come with a capacity warranty that states they’ll hold at least 70% of their original capacity by the end of their 10-year warranty. Few other battery manufacturers offer such a guarantee.
Pika’s, on the other hand, are promising, with their $15,000, 15.6-kWh batteries offering some pretty nice features, and reasonably easy drop-in style installation that doesn’t require additional hardware. But at $960/kWh, they can’t yet compete on price with the big guys.
SimpliPhi batteries can be dropped in to an installation that might have used lead-acid batteries instead, but are also quite pricey. Current costs at the AltE store show you can nab 14-kWh worth of SimpliPhi batteries for about $12,000, with installation costing extra and on your own terms.
How can you get a home solar battery for less money?
We’ve established that batteries are pretty darn expensive, and their relative worth to you has to be judged by not only the financial savings you might see from solar self-consumption or peak shaving, but also by the worth you assign to your peace of mind if the power goes out. But there are ways to tip the equation in favor of the financial rewards of home energy storage, because of government incentives that exist to help you install batteries at lower-than retail cost.
Home energy storage incentives
The first incentive that anyone needs to know about when it comes to solar-plus-battery systems is the Federal Solar Investment Tax Credit (ITC). The ITC is a nonrefundable tax credit, meaning money off what you owe to Uncle Sam each year, up to your total tax liability. The ITC earns you 26% of your costs to install a system in 2020, 22% if completed in 2021, and 0% forever after.
For people who install in 2020 or 2021, that’s a huge discount, and you can apply it to home solar and batteries installed together and batteries added to your home solar system after the fact, but there’s a catch: you can only claim the credit for the battery if it will be charged exclusively from solar. That means if you had planned to charge up your battery from the grid using cheap off-peak electricity under a TOU plan, you can’t claim the tax credit for the battery.
It gets more complicated than that, so connect with a solar installer to get an exact picture of how much solar tax credit you might be eligible for with your own home solar system.
There’s even better news for homeowners in California, Maryland, and Jacksonville, Florida. Energy storage incentives in those places are saving people money on home batteries now, while programs in Nevada and Massachusetts are still in the planning stages.
Here’s some information about current energy storage incentives for homeowners:
California’s Self Generation Incentive Program (SGIP)
California has long been a leader in the clean energy revolution, and though the state has by far the largest base of installed solar in the country, it’s kept up the pace when it comes to innovation with the Self Generation Incentive Program. SGIP provides rebates that take money directly off the cost of home energy storage installations, and it’s going gangbusters.
The incentives are designed to step down over time as they are used by the public, with rebates awarded on a dollars-per-watt-hour ($/Wh) basis. Here’s a table that shows the different rebate amounts organized by step:
|Incentive Step||Incentive rate ($/Wh)|
Each of the state’s 3 major electric utilities—PG&E, SCE, or SDG&E—has its own incentive pools subject to the steps. The program has been going since 2017, which means some of the incentive steps have already been exhausted. As of this writing (January 2020), all California utilities participating in SGIP have basically exhausted the funding for step 5, with any future applicants waitlisted. We’ll see if California can get another round of SGIP started this year.
The best way to claim these incentives is to connect with a local installer and have them process all the paperwork to get the rebate you’re eligible for. It isn’t surprising that these incentives are disappearing quickly, because 20% of California homeowners now choose energy storage alongside new solar panel installations.
Maryland solar battery incentives
In the interest of reducing peak electricity consumption by 15%, Maryland has several initiatives that provide cash back rebates and tax credits to home and business owners. The state’s Energy Storage Tax Credit Program provides a state tax credit of 30% of costs of a home energy storage system, with a cap of $5,000.
That’s a huge number, and combining it with the federal energy investment tax credit can reduce the cost of a home solar battery down to a very small fraction of the original cost. For example, if you were to install 2 13.5-kWh Tesla Powerwall batteries on a Maryland home, to be charged entirely from the sun, you could expect to receive $8,176 in tax credits based on the installed cost of $14,600.
Maryland is a state with excellent net metering rules, so you won’t be able to save any additional money by using batteries, but with costs of just $324/kWh, or $8,760 overall for that 27-kWh Powerwall installation, it might be worth the peace of mind that comes with that much backup power.
Jacksonville Electric Authority solar battery incentives
JEA offers solar+battery incentives of up to $4,000 (or 30%, whichever is smaller), depending on several factors and subject to restrictions. The program became available April 1, 2018, and will be reviewed after the first 50 participants sign up.
If you live in Jacksonville and are served by JEA, check out the program and see if you qualify!
Last modified: April 23, 2020