A lot of misconceptions exist around the need for battery storage of solar energy which this article aims to address. While batteries can provide economic benefit for residential owners in specific situations, they are not yet feasible for everyone because of the price tag and possible regulatory standards.
This article addresses battery storage from the context of a residential owner who plan to install solar panels. Please consider reading this article to understand what you should know before investing in solar.
What does a battery do?
When installed as part of the residential solar energy system, a battery stores the extra unused energy from the solar panels instead of feeding it back to the grid. During evening/night times, when you are using more electricity than what is being produced by your panels, the stored solar energy is used instead of electricity from the grid.
Before we address the above, we need to understand net metering or how the utility charges its customers.
In some states, you will receive a credit on your electricity bill for every kilowatt-hour (kWh) of solar energy sent back to the grid. These credits can be used when you use electricity than what is being generated by your solar panels.
If a homeowner installs a battery storage system, he/she won’t save money in this situation as the utility is providing the same benefit.
However, in certain situations because of the way the utility charges residential owners, installation of a battery can be beneficial:
Normally, the utility pays a credit amount equal to the cost of electricity per kWh. For example, if you pay 2 Rs/kWh for electricity to the utility, you’ll get 2 Rs credit on your bill if you send back 1 kWh of solar energy into the grid.
Some utilities pay less than this amount. So, for example, if you pay 2 Rs/kWh for electricity to the utility, you’ll get 1 Rs credit on your bill for every kWh of solar energy sent back to the grid. This is less than ideal as the value of the 1 kWh you generate at home is greater if utilized at source rather than if it was sent back to the grid. In this case, one can choose to install batteries to maximize the value of solar energy being generated.
Some states are planning of implementing a scheme in which the per-kWh utility rate changes depending on the time at which electricity is consumed. This is done to encourage consumers to shift their consumption to off-peak times to reduce the load on the grid. Under this scheme, electricity will cost more during evening when demand for electricity is high.
Installation of a battery system can be helpful here as the stored solar energy can be utilised in peak hours instead of costlier grid electricity.
Many residential owners are of the opinion that with a solar panel and battery storage installation, they can be off the grid and consume only electricity they generate. Most batteries are not designed to serve as the source of power.
Most batteries are designed to provide power only for a few hours. Also, this is ideal for peak hour usage or if there is a blackout on the grid. However, if there is a need for multiple day storage, multiple batteries must be installed. This can increase the cost significantly and make it infeasible.
Data Science & Technology Advisor | OffCarbon