Are home batteries cost-effective for solar home owners?

Under PG&E’s time-of-use rate plan, installing a home battery is not worthwhile for solar customers looking to maximize saving with rate arbitrage. At this time, home batteries are only financially advantageous for solar homeowners on PG&E’s EV rate plan.

For solar customers looking for a solution for potential power outages the most economically savvy solution is an ultra quiet generator.

For non-EV owners, adding the cost of a home battery into the solar installation equation, reduces your return on investment and extends your payback period. Still, any salesman can sell a battery when bundled with solar because the ROI for solar is that high!

Thus, solar companies will continue to capitalize on home energy storage as long as homeowners adopt battery backup systems as a solution for potential power outages and energy arbitrage.

Here is some information to help you make an informed decision.

How Lithium-Ion Batteries Work:

The surplus energy you produce during the day is stored in your battery. At night, as your production decreases, or during an outage, you can draw from the electricity that you have stored. In addition, you can program your battery to run during peak hours, to “maximize” your savings.

The actuality is that the money you save on slightly lower electricity rates by programming your battery to run during peak hours is not significant enough to break-even and in the long run, you will most likely loose money on your investment, unless you are on PG&E’s EV (Electric Vehicle) rate plan.

“Maximizing” Your Savings

How much money you can “save” depends entirely on the difference in price between off-peak pricing and peak pricing. With PG&E’s current solar rate plan (E-TOU), Peak Pricing during summer, (June 1 – September 30), is about $0.40, Off-Peak is $0.32. In winter, (October 1 – May 1), Peak pricing is about $0.28, Off-Peak is $0.27. This means you can save about $0.08 per kWh during Summer Peak Hours, and $0.01 per kWh during Winter Peak Hours.

For example, with the LG Chem RESU 10H storage system, the battery can hold and displace 9.3 kWh of usable energy per day. In the absolute best case scenario, if you use all 9.3 kWh during Peak Hours (3PM – 8PM, Monday – Friday), and save 8 cents per kWh during Summer Peak Hours and 1 cent per kWh in Winter, (excluding weekends),  you can save up to 74 cents a day in summer and up to 9 cents a day in winter to potentially accumulate a maximum of $86.03 in annual savings with PG&E’s current solar rate plan.

The Loss of Transferring Energy

There is an unspoken consequence of programming your battery to run during peak hours: you waste kilowatt hours. Both the LG and Tesla battery only have 90% round trip efficiency, therefore, it takes an additional 10% of energy to charge your battery. So the money you save by shaving peak hours is more or less cancelled out by this reality.

If PG&E changes their solar rate plan to make batteries more cost effective, then we will recommend them to those investing in solar, but chances are (knowing PG&E), they’re going to make it more expensive, not less! For now, PG&E can be viewed as an ideal battery system through their NEM 2.0 program for solar homeowners.

If your main concern is having power during an outage, we recommend investing in a ultra-quiet generator. Emergencies require generators, not batteries that “depending on the weather” may help you. Not to mention, they cost less and last a lifetime!

Bottom line is solar energy saves you money, energy storage adds security.

With Green Stock Solar, your financial interests are of our interest. We are certified to install LG Chem RESU 10H home batteries, however we still cannot recommend them at this time. We can also install solar, “storage ready” so that when and if you decide a battery is worth it, you’re home is already equipped with the proper inverter.

Never forget to do your research. Numbers don’t lie, salesmen do. If you have any questions about solar, batteries or generators, please don’t hesitate to reach out!

Related Post