In this final video in a ten-part training series of key concepts for people looking to buy a solar system, Kerim Baran of SolarAcademy talks about why residential and commercial customers use batteries. He also discusses the cost and feasibility of using energy storage. The entire series can be viewed here.

Transcript of the video:

Kerim Baran of SolarAcademy: And the last segment that we’re going to cover in this series of Ten Concepts to Know When Buying Solar is about batteries. So what about batteries? This year 2022, most solar systems sold do not get sold with batteries integrated in the solution. I would say probably close to 10% of all solar residential solar systems maybe get sold with batteries at this point, but it is a rapidly growing attribute of the solar solution set. I am confident that in the next five to ten years we are going to see most solar installations being installed with integrated batteries.

Having said that currently, the batteries are a rapidly evolving technology but the cost is still not where it needs to be. It’s still a little expensive so the economic advantage of having batteries is not as clear cut as solar panels are. But having said that, solar panels used to be about five to six times more expensive than 10 years ago, 12 years ago and now they are five times cheaper. I’m observing similar trends in the battery space and batteries will make more and more sense.

Why do five to ten% of the homes that are going solar put batteries? Now mainly for peace of mind reasons – for brownouts and blackouts so that if the grid goes down, if there’s a power outage, you can still run a section of the home if not the entire home from batteries like critical loads like refrigerators and some lights can be easily connected to the batteries. Most residential batteries are, you know, around 10 to 15-kilowatt hours in size or maybe there are some that are like more in the seven or eight-kilowatt hour size as well. But assuming that an average American home consumes 30-kilowatt hours of electricity so one battery can easily cover about half the consumption of a house for the entire day.

The cost of these batteries are generally about around a $1000 per kilowatt hour so $13,000 but there are many incentive programs like the SGIP program, self-generation instant incentive program, in California that can cover close to 80 even 100% of the equipment cost in certain situations. Though these programs are being used up and changing rapidly so you better ask your local installer about the details of these programs and the benefits.

Generally, what to do about batteries? They do make sense for peace of mind purposes and they they are going to add quite a bit in price to the solar system – probably increase the total price by one and a half to two times. But they will give you peace of mind. The other aspect of the batteries is that batteries can be used for arbitrage purposes in locations where there are high time-of-use rates. It might make a lot of sense to load up the batteries when electricity is cheap and then use the electricity that comes not off of the grid but off the battery when electricity is expensive.

For example, where I live in San Diego, California, the electricity rates range from mid-teens to around 50 cents per kilowatt hour depending on the rate schedule you’re on, the time of the year, and the day. So it might make sense to use the batteries for arbitrage purposes in locations like San Diego for residential and commercial purposes. Also if you are a commercial business you can use batteries to offset your high demand charges as well. And of course batteries make a lot of sense at the utility-scale as well to help balance out the grid and provide better frequency and voltage.

And that concludes our segment on batteries and concludes our 10 Concepts to Know When Buying Solar.