It’s a widespread belief that renewable energy can only make so much of an impact on the world without a side-by-side growth in the adoption of energy-storage technology, particularly rechargeable batteries.
Currently, many solar homeowners in the U.S. use lead-acid batteries to store self-generated power for use after the sun goes down. Spawned from the work of French physicist Gaston Planté in 1859, lead-acid batteries are the oldest type of rechargeable batteries, and are commonly used to help start car engines and power golf carts.
Despite its availability and the long history of lead-acid batteries, residential solar storage adoption in North America has been slow. Research analysts have suggested that when customers calculate the benefits of a solar power storage system, the payoff just hasn’t been there. But advanced-battery makers are joining forces with solar installers in hopes of changing that.
Among those leading the charge is San Mateo, Calif.-based, solar installer SolarCity. The company has partnered with Tesla Motors to utilize the electric vehicle maker’s battery technology. (Disclosure: SolarCity is an installer partner of SolarEnergy.net’s parent company, One Block Off the Grid.)
SolarCity is currently installing a 10 kilowatt-hour battery pack storage system through its pilot program in California. The system has a maximum power output of 5 kilowatts.
The company expects to have the first 100 systems installed by the end of the year, said Eric Carlson, senior director of grid system integration for SolarCity.
The company is contemplating offering its storage system in more markets by the end of the year. “But right now, that is certainly an aspiration,” Carlson said. Carlson also said the company is keeping mum on the system’s selling price until they are closer to market.
The biggest difference in SolarCity’s storage system, when compared to traditional storage systems, is that it uses lithium-ion batteries.
Consumers historically have had high confidence in lead-acid batteries, as they are a tried-and-tested technology. These batteries also boast a lower purchase price when compared to lithium-ion.
But lithium-ion batteries are believed to last longer than their lead-acid counterparts. They are also viewed as more efficient and capable of storing more solar power in a smaller space. As a result, the U.S. solar industry is increasingly turning to lithium-ion for residential storage.
SolarCity, as well as other companies, market their storage as a backup system to be used during a power outage or natural disaster. These companies also suggest consumers could save money with solar storage by reducing peak-usage charges on their utility bill.
The money savings would come when a customer uses power from their storage instead of the grid during higher rate, peak hours. Customers could then recharge their battery during lower rate, off-peak hours.
So how should a solar consumer evaluate if battery storage is right for them?
If consumers are strictly looking at the system for energy backup, “we can’t really quantify that,” said Steve Minnihan, a senior analyst who specializes in grid storage at Lux Research. “It’s more of an emotional response,” he said, that dictates whether a U.S. solar customer decides to purchase battery storage.
For homeowners looking at battery storage strictly from an investment standpoint, Minnihan said they should focus on the price difference between on-peak and off-peak pricing.
“If you have a battery that gives you 1 kilowatt-hour of juice that you could use however you saw fit, what’s the most amount of added money you could get from your rooftop solar installation?” he said. The answer will depend heavily on where a customer lives and the utility pricing to which they are subject, he said.
Minnihan also said homeowners should pay heavy attention to the kilowatt-hour capacity of the system, not just the kilowatt capacity when evaluating storage. Kilowatt indicates a battery’s power rating — how quickly it charges or discharges electricity. Kilowatt-hour reflects the amount of energy that can be stored in a battery and consumed in a given hour (Check out How to compare energy storage projects for a more detailed explanation).
Depending on the size of the system and its battery technology, residential solar storage can be as low as $3,500 and upwards of $13,000, said Anissa Dehamna, a senior research analyst at Navigant Research who focuses on energy storage technology.
“Truthfully, these systems are still quite expensive. They are a premium product,” Dehamna said.
Dehamna believes that U.S. consumers who show interest in residential storage often are folks who are not as price sensitive and have a strong interest in consuming self-generated energy.
But that can change. Government support through tax credits or incentives can offset storage costs in a meaningful way, Dehamna said.
Through its self-generation incentive program, California has become a U.S. leader in residential solar storage. For those purchasing advanced energy storage, like those made of lithium-ion batteries, they can get $1.80 per watt, which translates to $1,800 per kilowatt.
Earlier this month, the California Public Utilities Commission released a proposal that would require the Golden State to have 1.3 gigawatts of energy storage by 2020. A portion of those gigawatts is slated for residential storage. Should the proposal pass, the California residential storage market is expected to get another boost.
Increased market competition and storage manufactures reaching greater scale will also help drive prices down over time, Dehamna said, making storage a more alluring option for residential solar customers.