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The residential “behind the meter” battery market is quickly gaining traction. Customers are becoming well informed via a mix of push marketing – by solar integrators highlighting their offering, and frequent press coverage – be it from a new company entering the market or a change in regulation or incentive at the state or utility level.
Product knowledge is important, but understanding what the product provides in terms of real value is what will drive the growth of storage.
A Reality Check
A stand-alone battery system can’t power what the average U.S. home requires for two reasons. First, the average home uses more power than a battery can economically store. Why not make bigger batteries?
Because of the second reason, which is a limitation on battery output dictated by the size of the inverter. An inverter is required to convert DC power in the battery to AC power the home uses.
Inverters on currently available systems range from 4-8 kW, and an 8 kW inverter will support a 60-amp sub-panel, whereas most homes have a main panel of 100 amps or more.
The difference between total home amperage needs and amperage the inverter can support is managed using an electrical sub-panel. A sub-panel is a second electrical panel holding a subset of the circuits on the main and is normally positioned adjacent to the main panel.
An electrician will move circuits from the main panel to the sub, and the battery will provide power only to those circuits on the sub-panel.
With the sub-panel caveat considered, let’s take a look at how a battery can provide value when properly paired with solar.
Blackout Protection
Tell a homeowner that a solar array shuts off when the grid goes down, and you will be met with a perplexed look. Once the logic behind the safety rationale is explained, the concept becomes quite clear.
A key benefit of adding a battery of any size to a solar system is that most systems will allow the solar panels to continue to produce electricity when the grid is down and the sun is out. When the sun goes down, the solar panels stop producing and the battery provides power.
In keeping with sub-panel amperage limit, the homeowner will need to consider the ‘must have’ items to be located on the sub-panel, and thus powered by the battery or PV when the grid is down. Items such as the refrigerator, room lights, a sump pump and heater blower typically make the list.
According to Eaton Blackout Tracker, in 2016 the U.S. experienced 3,879 power outages, impacting nearly 18 million people – so the chances of experiencing one are real.
Interestingly, the average duration of a blackout was about 48 minutes. Applying some basic statistics it’s safe to assume2 hours of battery coverage will get a home through90-95% of power outages. (Yes, the outages caused by major hurricanes such as Harvey and Irma are more significant in duration, but hopefully, storms of that significance will not be annual occurrences, and these data points are outliers).
Two hours of coverage, with a 60-amp sub-panel, can be adequately supported by an 8-10 kWh battery system.The battery will only be needed when the solar panels aren’t producing.
Blackout protection is a tangible customer-driven need and most battery products will provide a home with adequate coverage.
Rate Shifting
Not all areas of the U.S. experience a high percentage of power outages, but batteries still provide value for residents with utilities who charge time-of-use electric rates. Rate shifting applies in areas with a time of use pricing and is a cost-saving strategy.
In rate shifting, batteries are charged with excess power from the solar array and discharged to off-set grid use when rates are at their highest.
Rate shifting is sometimes confused with Rate Arbitrage. Rate arbitrage comes in two forms; using the grid to charge the battery when rates are low, then discharging when rates go up, or using either excess solar or the grid to charge the lowest price, then discharging to push back to the grid at times when net metering benefits are highest.
Power companies take umbrage to rate arbitrage and, unfortunately, some power companies view both rate shifting and rate arbitrage similarly.
Use Capping
Batteries can also provide relief to homeowners in areas where there is a use cap in place. Battery integration can be effective in areas where electrical rates increase after a home uses a pre-determined amount of power in a month or day.
Typically there is a set baseline power allowance, after which the rates go up, and there may be multiple rate steps.
In these areas, a battery system, equipped with elegant programming capabilities, can monitor the homes energy usage and discharge power to prevent moving into the next rate step. Not all battery systems have to programme to manage this strategy.
These are the three most significant reasons to pair a battery with solar today and the principal value propositions for integrated battery use with residential solar.
As power companies change rate structures, more may arise. But there is no debating that the market for residential ‘behind-the-meter’ storage has shifted into growth mode.
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This article is written by Chris Gorski for pvbuzz.com. It is edited by Derick Lila
Director of Special Projects for RGS Energy and is currently leading the commercialization of the company’s battery portfolio. He takes revenue-generating ideas from conception to full commercialization and revenue generation.
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