Solar

Storing electricity in a battery bank can serve many purposes. In most parts of the country, battery storage for residential homeowners is mainly used to provide backup power during power outages.

When the utility grid goes down and you lose electric service, you can use a battery system to power some or all of your household electricity needs (called “loads”). The battery backup system works by isolating certain loads from the main utility system with something called an “automatic transfer switch”. You are then able to power these loads with electricity stored in the battery bank. Loads can range from small (light bulbs, a toaster, or hair dryer) to large (a refrigerator or a well pump). When the utility grid power returns, the backed-up loads in your home then automatically reconnect to the grid. The result is that these “critical” loads receive power even when the grid is down, switching seamlessly between utility electricity and stored electricity from your battery.

Battery banks in a home serve the same purpose as a traditional generator that runs on diesel, gasoline, propane, or natural gas. Unlike a traditional generator, a battery backup system does not require you to buy and store fuel or rely on fuel delivery during an outage. When paired with a solar array, the battery will be charged with the solar electricity you produce. If you do not pair your batteries with solar, the battery will charge and recharge only from utility-supplied grid electricity. This limits its usefulness for backup power purposes during a utility outage as it will only be able to discharge once before needing the utility grid to be restored for it to recharge.

Powering your entire home with a battery system can get expensive. This is why many homeowners install a smaller battery bank to power select “critical loads”, such as medical equipment or a refrigerator, in their home during the event of a grid outage. If you feel strongly about powering your entire home during an outage, a whole-house fossil fuel-powered generator may be more cost effective.

The size of the battery bank you need depends on several factors and is specific to your needs and to your home. A qualified energy installer should look at the following to determine what you need:

1) What kinds of loads you would like to run while the power is out

Your installer should look at which appliances, lighting, and other loads you want to power in an outage in order to determine how much energy they will use over the time period you want to keep them running. To size your battery system, the installer will add up the required number of watt-hours per electrical load over the desired backup period and the maximum number of watts you’ll need at any given time during a backup period. Bigger loads like electric stoves, electric water heaters and whole-house air conditioners may not be able to be backed up.

2) Suitable space in or outside your home to place batteries

Depending on the type, batteries may need to be located inside or outside. If located outside, and depending on batter chemistry, they may need to be placed in a shaded, temperate area. Your installer might need to adjust the size of your battery system to accommodate your available space.

3) How long the batteries are able to run without being re-charged

A battery system that operates your appliances and lights for one day would be smaller than a system that can operate the same equipment for two days without being re-charged. Your installer will guide you through how long you want to be able to run your appliances, but for most battery backup systems the standard length of run time is one day, especially if you have solar on site to re-charge your batteries.

4) Your budget

Because batteries can be expensive, most people size their systems to only power critical electrical loads while utility service is out. Your installer will help you decide which loads you want to power with your battery given your budgetary constraints.

Solar is the perfect partner for battery storage. A properly sized and configured solar system will re-charge your batteries on a daily basis, providing the fuel to keep your battery fully charged and ready for use. Unless you have special inverters which can allow you to use a portion of the array while the sun is shining, without batteries, your solar system will not provide electricity to your home during a power outage. This is because solar systems are required to automatically shut off if the grid goes down. This is done to ensure that they do not “backfeed” power onto the lines and injure workers that are repairing the electric line.

Solarmates does not calculate your solar needs based simply on the square footage of your home nor by how many rooms you have. Estimating solar in this way has left a lot of customers in a bad spot, because their solar systems  were underpriced and turned out to be not enough solar for their consumption.

Can you imagine installing a $30,000 system and then finding out that you still owe $100 each month to your electric company? What a mess! We avoid this catastrophe by observing your energy usage (as shown on your electric bill) and designing a system that meets your needs. You will not be paying unexpectedly high bills.

There are several things that go into pricing out a battery storage system:

• Soft costs – installation, permitting, system design, labor
• Hardware costs – battery equipment, inverter, other electrical components
• Maintenance – visits from a qualified professional to ensure your system is operating properly

The cost of battery storage priced by an installer will include both soft costs and hardware costs and can range widely from ~$7000 to upwards of $20,000 because it is customized to the amount of energy a homeowner wants to power loads in their home during an outage.

The Federal Investment Tax Credit (ITC) available for solar installations can also cover the cost of battery storage. This is not a refund or a rebate. The ITC provides a non-refundable credit you can count towards your federal tax burden. The credit is worth a percentage off the total installation cost of your battery system. For systems installed by the end of 2021 the tax credit is 26%. The credit is also 26% in 2022, then 22% in 2023, and goes away after that. Learn more about the federal solar investment tax credit. You file for the tax credit when you file your taxes for the year the battery was installed.

There are strict specifications for eligibility. This is based on how much the battery system is charged by solar. According to the IRS, a battery system on your home must be 100% charged by solar energy to receive the credit. This means the solar panels connected to the battery system must be the source of its power to qualify for the full federal tax credit. The rules are different for commercial battery systems. These systems can receive a portion of the federal tax credit if at least of 75% their charge comes from solar. See our Battery Storage Guide for more information.

Some states and jurisdictions are also beginning to offer incentives. Maryland, for example, offers a 30% state tax credit off of the cost of battery storage with a maximum credit of $5,000 for residential systems.

In most places in the country installing battery storage will not make you any money because the electricity rate structures do not incentivize the storage of energy in the home. For most homeowners, battery storage is about backup power and being more resilient.

Unlike solar, for which there are numerous loan financing options, the number of options available for storage are more limited. Typical options like home improvement loans and home equity lines of credit are available for use. Some solar loan providers, like Mosaic, offer financing for storage as well. If you have PACE (Property Assessed Clean Energy) financing available in your area, this may also be available for storage. In some areas third-party owned systems may also be available. Under these arrangements you get the use of the battery system for backup power and the battery owner uses it to provide grid services to the utility. This kind of arrangement is still very new and not yet widely available. Ask your installer about financing options they can offer from the manufacturer or from third-party financiers and compare them to what you can acquire on your own.