Do I need back-up battery storage for my solar?

The solar industry has evolved a lot in the last few years. Technology has improved the efficiency of solar panels, lenders have made solar more economically accessible for homeowners, and state and federal solar incentives have promoted growth. This solar growth has also expanded battery storage as a common component of solar designs. Home Battery storage systems have leveraged lithium-ion technology, and safety testing from electric vehicle development. It has also pushed consumer acceptance of lithium-ion batteries in the home. With PG&E discussing NEM 3.0 solar program updates, including a severe decrease in solar credit buy-backs, home battery storage has gone from a nice-to-have to a must have. Learn more about NEM 3.0 here.

What does a battery do?

In order to understand what a back-up battery does, we should first discuss what some of the shortcomings are of a traditional solar install without a battery. Traditional home solar is sized to produce 2 to 3 times more energy in the middle of the day than the home actually needs at that given time. That is when the sun is the highest, and the solar can produce the most energy. However, that is also when a typical home’s usage is the lowest. Most homes use the bulk of their electricity in the evening time after the sun sets. Everyone is home using lights, cooking dinner, washing clothes, running the heat, etc. This is also when solar is producing zero power for the home. In order to make solar work, PG&E has Net Energy Metering (NEM). NEM allows solar users to send their excess power to the grid in the middle of the day, and use those solar credits in the evening when the solar is not producing energy. It is a great program that has made solar a viable option for 100% renewable energy, and annual PG&E bills that are NET $0.

Solar produces 2 to 3 times the energy in the middle of the day when it is least needed
Most homes use the bulk of their energy in the evenings after the sun sets
PG&E credits excess power in the middle of the day, to be used in the evenings

So, what’s the catch? The current PG&E solar rate plan, NEM 2.0, gives solar customers a 1 to 1 retail rate for their kilowatts produced. The issue is, a kilowatt is currently worth about $.30 in the middle of the day, and about $.60 in the evening. Solar customers are using solar energy credits from PG&E after the sun sets, but at a rate of about 2 to 1 because of the difference in energy value between the middle of the day rate, and peak rate in the evening. That is where a back-up battery can help. It allows you to store your excess power from the middle of the day on site, and use it in the evening when you need renewable energy the most. This helps keep your grid energy usage to a minimum, and especially avoid the evening “Peak Use” window from 4:00pm to 9:00pm.

Solar customers are using solar energy credits from PG&E at a rate of 2 to 1
Batteries store power from the middle of the day, and use it in the evening peak use time

I thought back-up batteries were for power outages?

It is true. Back-up battery storage also works as a back-up power supply in the event of a grid power outage. It will keep a portion of your home backed up, usually the kitchen, living room, and office. Most systems will not be able to back up your entire house, but will keep your fridge/freezer working, internet router, tv, and a few lights. An added benefit is it keeps your solar producing power and feeding the home when the grid is down. Typical solar installs without back-up battery storage will shut off during a power outage if there is no battery to safely send the power.

Back-up battery storage powers the home in the event of a grid power outage
Battery storage keeps your solar producing and feeding the home when the grid is down

Is it worth the additional cost?

This is a question best answered by your local solar consultant. For most homes, back-up battery storage is becoming an essential feature to extend renewable energy usage past sundown. If you know you need a back-up solution for power outages too, it is a great way to hit 2 birds with 1 stone.

As PG&E continues efforts to roll back benefits of their solar program, back-up battery storage is a great way to future-proof your solar install, and be less reliant on PG&E. It allows you to generate and store your solar electricity on site without relying on PG&E to store it for you, as well as eliminating PG&E as a middle man for your power. On average, the solar break even point is about 5 years, while battery storage is about 7 years. With PG&E raising rates (22% in 2022 alone) this break even point is quickly becoming shorter and shorter.

Battery storage is a great way to future-proof your solar install
It allows you to generate and store your solar electricity on site
Battery storage break even point is about 7 years and getting shorter

Would a whole home generator be a better option?

There are pros and cons to batteries as well as whole home generators. A whole home generator will provide more power to operate your entire home during a power outage. This is great if you or a family member have medical equipment that must function no matter what, or if you operate a business out of your home that needs to run large equipment on 240v circuits (shop equipment). Also, if you are in the mountains with heavy snow and frequent winter outages, a whole home generator may be a better solution. The price of a whole home generator is about the same as a back-up battery system. A generator may only be needed a couple times out of the year, while a back-up battery will be used every single evening to offset peak rate times. As far as an investment in your home, the back-up battery will be used much, much more.

Another option may be to install solar with back-up battery storage, and a transfer switch to use a small generator on rare occasions. This solution gives you all of the power benefits, at a reasonable cost. Discuss this option with your solar consultant to see if it is the right fit for you.

Whole home generators are a great option for medical needs, or for a business with large electrical needs
Install solar, back-up battery, and a transfer switch to use a generator on rare occasions

Conclusion

Back-up battery storage technology has come a long way in the last few years, and is an excellent addition to any residential solar system. It allows you to have more energy independence from the grid, back-up power for power outages, and save you money by avoiding peak rate usage in the evenings after the sun has set. Ask your local solar consultant if back-up battery storage is a good fit for your solar install.