Solar is one of the cleanest and fastest-growing sources of energy, but it has one major disadvantage: solar energy is inconsistent. Because the sun does not beat down on solar panels 24/7, the panels cannot generate power all of the time. Unfortunately, solar panels are unable to store excess energy for later usage; however, some companies such as Tesla have created home battery systems capable of storing energy from solar panels and releasing it in the home when needed.
Solar-powered home battery backup systems have a number of advantages. For one thing, unlike solar panels alone, they give homeowners control over their energy output. Homeowners can take advantage of variable utility prices to lower their energy bills. Backup battery systems also provide temporary protection in case of power outages, giving homeowners and their families comfort and security.
If you are considering installing a home battery backup system or backup generator, the first step is to consider your household’s energy consumption. At AlltimePower®, we’ve created a backup power calculator to help you better understand your energy needs. Using this information, you’ll understand the kind of battery you’ll need and how much it will cost.
Why solar energy storage requires battery backup
Solar panels collect energy from the sun and convert it into energy, but they cannot store it on their own. Once photons, or particles of light and energy from the sun, hit the solar panel, they knock electrons loose from atoms. The electrons then flow through an electrical circuit in each silicon cell of the solar panel, generating electricity. The electrical current must then flow through an inverter outside of the panel, converting the electricity into a kind of energy that can be used by electrical appliances in your home.
Normally, once electricity goes through the inverter, it connects directly to the electrical circuit of your house. When the panels produce more electricity than your home needs, excess solar energy automatically flows into the electrical grid, generating power other homes can use. Homeowners who contribute solar power receive credit for this added energy. They can use this credit to offset the cost of electricity from the electrical grid when the solar panels are not producing enough electricity to power the home.
Home battery backup systems provide an alternative solution. Instead of allowing power from the solar panels to flow into the electrical grid, the excess energy charges the home battery instead. When the solar panels no longer produce electricity, the home battery uses the stored energy to power appliances in the home. Most confiugrations give the homeowner the ability to control whether they receive power from their home battery or the electrical grid.
Can solar energy storage lower your utility bill?
Whether solar energy storage can lower your utility bill depends on how you use the backup battery. Most utilities fully compensate homeowners who contribute solar energy to the electrical grid, meaning you’ll receive one credit for every kilo-watt hour of excess energy your panels produce. This credit will offset an equal amount of energy usage drawn from the electrical grid. This means you may not see a significant difference in energy prices when comparing solar energy without battery backup to solar energy with battery backup.
In many areas, however, utility prices vary based on the time of the day or week. This is called time-of-use rates, and utility companies use it to charge higher prices during times of peak demand. Solar energy backup gives homeowners control over when they take energy from the electrical grid. Savvy homeowners with battery backup systems can use this to their advantage by only charging their batteries with electricity from the grid when prices are low.
Additionally, not all utilities offer full net metering, meaning some of the electricity solar panels send back will not be compensated. If your utility offers credits at a “wholesale” rate or offers no net metering, your solar energy will be more valuable if you store it using a home battery system. When comparing solar energy storage to no solar energy at all, utility savings are much more significant. The average American homeowner spends $1,408 per year on electricity. Depending on how much energy your solar panels produce and how much energy your battery stores, you could save upwards of $1,000 per year.
How much does solar energy storage cost?
Of course, when calculating how much solar energy storage can save you, it’s important to understand the upfront cost. Home battery backup systems cost about $10,000 to $20,000 for a medium-sized home, but battery systems powered by both electricity from the grid and solar energy can cost $20,000 to $40,000. This does not include the cost of installation or, if necessary, rewiring the home, which can add up to several thousand more dollars.
Installing solar panels also has a fairly high price, depending on the electrical output of the panels. On average, solar panels cost about $2.96/watt in the United States, which translates to about $10,000 to $15,000 for a medium-sized home. In addition to the savings on utility bills, the cost of solar panels is offset by tax credits. The U.S. Federal Government offers a 26 percent tax credit, and some states or local governments may offer additional tax credits.
If you choose to install a home battery backup system at the same time you install solar panels, the backup system may be eligible for tax credit as well. This may help reduce the overall cost of your battery backup system; however, installing solar energy storage is a significant investment and should not be taken lightly. Certain contractors provide different financing options, including leasing options for batteries.
Battery backup without solar energy storage
If you’re looking for energy storage, solar battery backup is not your only option. Home battery backup systems can run purely on energy from the electrical grid, saving you the hassle and cost of installing solar panels. Like solar energy storage, battery backup systems from the electrical grid can keep your home running in the event of a power outage. Additionally, they can save you money on your utility bill if you charge them when utility prices are low then disconnect when prices are high.
Upfront prices for battery backup systems without solar energy storage range from $10,000 to $20,000 for a medium-sized home. Unfortunately, since they cannot be charged separately from the electrical grid, these batteries will not last as long during an outage. If you want to run your home separately from the grid for more than a few hours, you may need to reduce your house’s energy usage. For example, you may want to avoid taking long showers or running the washing machine during an extended outage in order to avoid draining the battery.
Solar energy and traditional backup generators
Another alternative to solar energy storage is a fuel-powered generator. Whether you buy a generator that runs on diesel, natural gas, propane, or gasoline, fuel-powered generators are relatively inexpensive and effective. The upfront cost ranges from $7,000 to $15,000 for the generator and about $5,250 to $11,250 in installation costs, plus about $165 to $485 per year in maintenance and repair costs.
Unlike solar battery backup systems, fuel-powered generators can be noisy and require yearly maintenance by a qualified professional. Additionally, they are less environmentally-friendly than solar-powered batteries. If you live in an area that experiences extended outages or is prone to natural disasters, however, fuel-powered generators tend to last longer than battery backup systems.
Solar energy and fuel power don’t have to exist separately. Some battery backup systems combine power from the solar panels, the electrical grid, and a fuel-powered generator to create the ultimate protection against power outages. In fact, in some cases, these powerful batteries can allow a home to function entirely off-grid. Prices range from $30,000 to $50,000, but for some homeowners, the added security and independence offered is worth the high price.
Evaluating your energy needs
Whether you want to buy a solar-powered battery backup system, a fuel-powered generator, or a mix of the two, the first step in the process is understanding your home’s energy needs. Check your energy bill to see how much energy you and your family typically use in a month. Then consider how much of your electrical usage you want your battery or generator to cover.
It’s also worth considering the primary function of your generator. Are you trying to save energy on your electric bill and reduce your carbon footprint? If so, a solar-powered battery backup system might be the right choice for you. If you are worried about power outages, you may want a battery backup system with a higher energy storage capacity, or you may want to consider buying a fuel-powered generator instead.
Whatever the case, use online resources to help you find the right backup battery system or generator based on your preferences, energy usage, and budget. At AlltimePower®, we’ve created a backup power pricing tool that will help you evaluate energy needs. Learn how much you’ll need to spend and have independent dealers compete to give you the best price!