Should I add a solar battery bank when I install solar panels for my home?
Written by Chris Meehan
Updated April 02, 2020
6 minutes read
We have been examining the issue of whether installing a solar battery bank when you go solar is a good investment since 2017.
In previous years, we have concluded that for most people, the battery bank offered a lower return on investment (a longer payback period) than just buying a typical grid-tied solar system that does not store excess energy in a battery.
For those new to solar, solar power systems that do not have a battery bank export excess solar energy generated during the middle of the day to the utility for energy bill credits.
Tesla Powerwall. Image source: Tesla
What has changed in 2020 to make solar battery banks more attractive?
First, the leading solar energy storage battery solution, the Tesla Powerwall, has improved functionality to charge not just from solar, but also from utility power in cheap off-peak times to be used during expensive, peak electric billing times. This increases the annual savings a battery bank can offer, where time-of-use billing is mandated by the local PUC (Public Utilities Commission).
Second, time-of-use electric billing is being mandated in more jurisdictions around the country. This means many more people will be paying more for power used at night when a simple grid-tied system isn't operating than what they are earning from their credits during the day.
With a simple grid-tied system, daytime credits for excess solar exported to the grid are valued at off-peak rates and so are not enough to cover the cost of the night time electric use in places where time-of-use electric billing becomes mandatory.
It is now our view in 2020 (for the first time) that in states where time-of-use electricity billing is being rolled out, it is now a worthwhile investment to add the cost of a solar panel battery bank when doing a residential solar panel installation.
But before we get into the math, let's go over some basics.
What is a solar panel battery bank?
A) Solar panels B) Solar inverter C) Main electrical breaker box D) Solar battery E) Protected breaker box F) Meter G) Utility Image source: Sonnen
A solar battery bank today is a lot more than just a solar battery - it is a complex set of electronics and software that controls how you use the battery bank in order to reduce your electricity costs.
In a residential installation of a solar battery bank today there are really two things installed. First, a standard grid-tied solar system with solar panels and a DC to AC inverter that can work without a battery bank.
Second, there is a home energy storage solution installed which is comprised of:
- A storage battery
- An AC to DC battery charger (for charging the battery from solar or the grid)
- A DC to AC inverter (for discharging the DC power stored in the battery and converting it to usable AC power we use in our homes)
- A battery management system to ensure the battery is not damaged and operated safely
- Software that allows you to control how all this equipment is used in order to reduce your energy costs
When you buy a product like the Tesla Powerwall or the Sonnen Eco, all of this is bundled together for you. In old school, off-grid systems, each of these products was sold separately and the installer would put them all together to make a working system.
What is the best type of solar battery bank in terms of architecture?
There is another type of battery bank called a DC-coupled home energy storage system. The best example of this is the SolarEdge StorEdge system where DC couples the solar array and energy storage to a common dual-role inverter. By maintaining a high voltage DC connection between the PV modules and the battery, the StorEdge inverter hits 98% maximum efficiency, which is far higher than the roundtrip efficiency with the AC-coupled systems.
However, the reason Tesla and Sonnen have pursued AC-coupled home energy storage solutions is because they are better for people who already have solar and a DC to AC grid-connect inverter. The AC-coupled home energy storage solution can be installed without needing to change the existing solar inverter.
Both types of solar energy storage systems allow the home's solar array to operate even if the electric grid goes down. Without an energy storage system with a battery, a home solar array has to be shut off when the grid goes down so it doesn't send electricity back to the grid, potentially hurting maintenance workers, firemen, or others.
Our advice is that if you have an existing solar system without battery storage, an AC-coupled solution like the Tesla Powerwall or Sonnen Eco is best. However, if it is a greenfield site with no solar, then a DC-coupled solution like the SolarEdge solution is smarter and more efficient.
For the sake of disclosure, we have no financial relationship with any of these vendors.
Tesla Powerwall. Image source: Tesla
How much does a home energy battery storage cost in 2020?
The Tesla Powerwall with supporting hardware costs $7,600 plus installation. Installation cost is typically between $2,000-$3,000. This solution offers 13.5 kW of power storage.
The Sonnen Eco has a range of sizes between 4 kW and 16 kW. For an equivalent size to the Powerwall, it is around $10,000 plus the cost of installation. It is slightly more expensive but the fact that Sonnen specializes in home energy storage and that they have an accredited dealer network makes us feel that consumers and installers would likely get better access to technical support with Sonnen.
While we think the Powerwall is fantastic, Tesla's sales model marginalizes installers in such a way that most likely won't be prepared to help you if you have any issues.
It's very possible that they will simply say, "Call Tesla, we were just a contract installer". The problem is that Tesla does not have a technical support team capable of talking to hundreds of thousands of customers directly. Tesla sells the Powerwall directly on their website and installers make no margin on the product. Given that this is the case, it is unrealistic to expect local installers to take on this burden.
At Solar-Estimate, most of us are veteran home solar battery storage owners and if there is one thing we all agree on, it is that you will require support because home energy storage does strange things sometimes.
We think the Sonnen sales model, while slightly more expensive, is better because the installer sells you the product. Yes, they probably make a margin but they will be there when you need support.
Sonnen Eco. Image source: Sonnen
What are the different types of battery chemistry available in solar battery banks in 2020?
The most common batteries used for solar electrical storage used to be deep-cycle lead-acid batteries. However, in recent years, lithium-ion batteries—like those used in everything from cell phones to power tools—have caught up. Lazard has reported that they now have a lower-cost operation than lead-acid batteries for residential systems.
Lead-acid batteries cost less than lithium-ion batteries upfront, but they have shorter lifespans and warranties. The warranties are often 5 years - rather than the 10-year warranty offered by most lithium-ion battery makers. Despite being used for decades to power most off-grid homes, lead-acid batteries are also the most toxic of batteries for energy storage systems.
There are numerous types of lead-acid batteries, including absorbed glass mat (AGM) and gel batteries. Some newer lead-acid batteries use nanocarbon to slow sulfation in the batteries, extending their useful lives. The nanocarbon helps the battery charge faster and increases the cycle life as compared to traditional lead-acid batteries.
While lead is toxic, it can be recycled. So can the containers lead-acid batteries are contained in. Most of the batteries' electrolytes can actually be recycled into new batteries or for other uses.
These are the batteries used in most rechargeable electronics these days. In everything from smartphone and laptop batteries—usually in pouch form—to cylindrical cells such as those used in power tools and prismatic cells—which are used in electronic vehicles. Since they allow for air gaps between cells to aid in cooling, lithium-ion batteries usually have high energy density, low self-discharge, and high charging efficiency.
Lithium-ion batteries, particular those used in larger applications like EVs and home energy storage systems, require a battery management system that monitors each battery cell and its voltage to keep them in the appropriate temperature range and ideal operating conditions. The management system adds equipment and costs to an energy storage system. But lithium-ion energy systems have a longer cycle life and lifespan than lead-acid systems.
This makes lithium-ion batteries a good choice for providing extra grid benefits, including frequency and voltage support, or energy smoothing. Lithium-ion batteries can also stand idle for a long time when the batteries are only used occasionally.
Lithium-ion batteries use either organic or inorganic cells, impacting their toxicity. Organic lithium-ion batteries are toxin-free but inorganic lithium-ion is toxic and must be disposed of properly. Lithium-ion also is harder to recycle than lead. The recycling process is similar to manufacturing lithium from ore, making it less cost-effective.
Redox flow batteries
These are a newer class of batteries offered by companies like ViZn Energy. They have even longer lifespans than lithium-ion batteries. The vanadium redox flow battery is among the leading technologies in this class of energy storage devices.
The vanadium can come from flyash, a byproduct of coal-fired electric plants. It's estimated that by 2024 when more production reaches scale, the cost of these batteries will fall to $300 per kWh. Like lithium-ion batteries, flow batteries require extra equipment compared to lead-acid batteries. Flow batteries need pumps, control units, sensors, and more.
Vanadium has some other advantages. According to manufacturers, it doesn't degrade over time and doesn't have cycling limitations. At the end of a battery's lifespan, the vanadium is not toxic and can be recycled. Another factor is that the capacity of a flow battery system can be increased by adding more electrolytes rather than by adding more batteries.