Rooftop solar panels are common in Arizona thanks to abundant sunshine, but to get even more use from the technology, homeowners are beginning to pair them with large home batteries.
Batteries allow homeowners to store their surplus electricity, rather than send it to the grid in exchange for credit from their electric company.
Utilities previously gave homeowners a one-for-one credit for that surplus electricity, but as more people add solar, electric companies can face a glut of energy midday when the sun is high.
Utilities have begun to reduce the compensation for that surplus solar electricity and add fees to solar customers’ bills to reflect the power they use from the grid at night when their solar panels aren’t making power.
Batteries can help customers use more of their own power themselves at night, or they can store energy and dispense it during “on peak” hours when utilities charge more for power.
Battery sales are a fraction of solar installations, but interest is growing. Arizona Public Service Co. has about 135 customers with batteries in their homes today, and another 185 who are in installing them. Salt River Project has about 300 customers using batteries.
“It’s the hot new topic people like to talk about,” said Russ Patzer, CEO at Sun Valley Solar Solutions, an Arizona rooftop installation company that is seeing about a dozen battery installations a month.
How does a home battery work?
Batteries are mostly used to take advantage of utility rate plans that charge more for electricity during on-peak hours and less during off-peak hours.
A home battery can be charged with power from solar panels or from the grid during times when utilities charge low rates for electricity, and be used to power the home when rates are higher.
This reduces the amount of expensive energy a customer buys.
While batteries could be installed without solar, that is uncommon. They usually are paired with solar panels to take advantage of that electricity and reduce what a customer buys from the utility.
Some batteries also can power a home during blackouts, though not all of them are installed that way.
How much does a home battery cost?
Adding rooftop solar to a home can cost from $15,000 to $20,000, depending how much electricity the occupants use and the size of the system installed. Adding a battery can add from about $6,000 to $15,000 to the cost after taking advantage of tax credits and other incentives that are available in some places.
That price tag has meant that it’s mostly technology-focused people who are installing batteries today.
“Once you get into the economics of it, it’s still the early adopters,” Patzer said.
Patzer is seeing many customers who previously installed solar retrofit their systems with batteries.
Because the total cost can vary so much depending how much battery backup a homeowner wants, Patzer said he tends to discuss payback time with customers. It takes seven to nine years to save enough on utility bills to pay back the cost of solar, and batteries add a few years to that, he said.
The cost-benefit calculation is usually close because batteries generally have a 10-year warranty on their performance. So if a homeowner isn’t going to save enough on their utility bills to offset the costs within 10 years, they often are not interested.
What incentives are available?
The federal tax credit that’s available for rooftop solar can be used on batteries if they are installed with a solar system. Homeowners can apply the federal tax credit to their personal income taxes.
The credit today is 30 percent of the cost of the equipment.
The tax credit is scheduled to step down to 26 percent for projects that begin construction in 2020, and 22 percent for projects that begin in 2021, the Solar Energy Industries Association reports.
After 2021, the residential credit goes away.
Utilities previously offered customer incentives to install solar, but as it has gained popularity, those have been cut. Salt River Project however introduced a new incentive this year for customers who install batteries.
SRP will provide as much as $1,800 for as many as 4,500 qualified battery installations.
The company will collect data from customers in the program.
Details are available on the SRP website.
Arizona Public Service Co. has various research projects involving batteries as well.
Will the lights stay on in a blackout?
Battery systems can be installed different ways. They can be wired to serve as a backup power source if the grid goes down.
A system that can run a home without grid power needs to be larger and hence, more expensive.
Sun Valley Solar Solutions offers customers the option to have some “critical” lights and appliances wired into their batteries, or the option of buying enough batteries to provide an entire home backup system.
How long can you run a home on batteries?
One of the more popular brands of batteries is made by electric car company Tesla.
The Tesla home battery is called a Powerwall and is essentially the same battery used in the company’s high-end cars.
A standard Powerwall has a capacity of 13.5 kilowatt-hours.
That is enough power to run lights in a home and maybe a refrigerator for several hours.
A standard air-conditioner draws about 4 kilowatts of power though, so a Powerwall could only supply that for a little more than three hours of constant use. And air-conditioners require a large surge of electricity just to start up, which may require more than a single battery.
Tesla says that its Powerwalls have enough capacity to run an average air-conditioner, and the company allows consumers to calculate what appliances they can operate and for how long on the Tesla website.
Does this help utilities?
Solar creates a problem for utilities that they refer to as the “duck curve.” The name is a reference to the charts utilities use to diagram the demand for electricity from their customers throughout the day.
The demand curve usually is high in late afternoon, when people are returning home from work, and low overnight when most people are asleep.
Residential solar does odd things to the normally smooth demand curve.
Solar reduces demand on the grid midday because it floods the grid with electricity when the sun is shining. The graphic depiction of power demand begins to look like a duck when this happens, with demand dropping at noon.
Then the curve rises sharply like the back of a duck’s neck as solar panels reduce their output with the sun sinking in the sky. This happens at about the same time electricity use is peaking, when people return home for the day, and businesses continue to draw power from the grid.
It also tends to be when Arizonans use the most electricity for air-conditioning.
Batteries can take the excess solar energy produced midday (the duck’s belly), and save it to be used later in the day when power demand is high and solar panels stop producing electricity.
Both APS and SRP are encouraging customers with solar to use batteries or otherwise curtail power use during the late afternoon to address the duck curve.