Home battery storage is being installed in more and more homes with the rise of solar companies.
(TNS) -- Bill Coleman needed to replace the roof on his Los Altos home. The tech entrepreneur decided to package new roof tiles with a solar power system and a battery unit to store electrical power.
The solar panels have dropped his electric bills to nearly nothing, and the rechargeable battery pack from Sunverge has kept the power on at his house during blackouts. It’s quiet and, so far, hassle-free, he said. The extra expense was worth the peace of mind.
“The lights don’t even blink,” Coleman said. “They stay on.”
Coleman is part of a small but growing group of homeowners coupling solar panels with rechargeable energy storage systems. These battery units provide power during emergencies and can potentially reduce power usage and bills.
But it’s also a new technology, which means it can be expensive and unreliable.
“At this stage of the game, energy storage isn’t quite for everyone,” said Cory Klausmann, vice president of sales at Simmitri. “There’s a select demographic that it works really well with.”
A typical home battery storage unit is a collection of rechargeable, lithium ion batteries, connected to power-generating solar systems.
Home storage systems vary widely in capacity, complexity and price. Battery units range from as small as 2 kilowatt hours to nearly 20 kilowatt hours; by comparison, a typical home uses 30 kilowatt hours of electricity per day.
Residential storage costs between $1,300 and $2,000 per kilowatt hour or about $8,300 to $12,800 for a 6.4 kilowatt hour system, according to Greentech Media. Installation prices vary, too.
Federal and state incentives can reduce the sticker shock. Battery storage for solar systems are eligible for the federal 30 percent investment tax credit. California offers the self generation incentive program (SGIP), which grants customers rebates based on the size of battery storage. The greater the storage, the bigger the rebate.
The rebates make larger storage a better deal, Klausmann said. Incentives programs can drop the cost of a 19.4 kilowatt hour system from $32,000 to around $12,000. By contrast, a 7.7 kilowatt hour system costs about $10,000 after the rebates.
In coming years, however, a few things might change to give home storage a better return on investment, including dropping battery prices and regulatory changes. For example, utilities have explored charging residential customers more for peak-time energy — in the morning and evening — that would encourage users to draw less from the grid.
Michelle Mapel, spokeswoman for German battery maker Sonnen, said storage is both an investment in energy independence and an insurance policy. “No one knows what the utilities will be doing,” she said. “It helps you future-proof.”
Storage has other advantages, particularly during emergencies. Solar panels are cut off from the grid during power interruptions — utilities don’t want panels feeding current over wires while repairs are being done. A battery system can take the solar generated power and store it, allowing a homeowner to live off the grid, at least temporarily.
But for most consumers right now, battery storage systems won’t pay for themselves.
You might shave a few dollars off your utility bill by drawing battery power at night. But even in the long run, experts say, the savings won’t cover the cost of a storage system.
“You’re not doing this for the economics of it today. You’re doing it as an early adopter,” said Randy Zechman, CEO of solar installer Clean Solar. “You’re doing it to push the industry forward.”
Besides cost, there’s another reason to think twice before purchasing an energy storage system: the technology is anything but bulletproof right now.
Jim Petersen is CEO of PetersenDean, a Fremont-based company that installs about 1,000 solar panels systems a month. Only about 5 percent of customers choose battery storage, he said.
His company gets called back on about 10 percent of the battery storage it installs because of flaws in the systems, he said. That’s too high for his liking, he said, and indicates the technology is still maturing.
Petersen recommends established companies with proven technology and stable finances, in case problems arise during the warranty.
Even though the economics of home storage don’t make sense for many homeowners, the market has a growing buzz. Solar industry insiders point to one main reason for the uptick in interest — Tesla.
“This market is 90 percent driven by Tesla,” Zechman said.
The Palo Alto green tech company, which recently acquired SolarCity, introduced home storage last year with the Powerwall. A new, updated version, Powerwall 2, is due out next year. With the promise of advanced, high volume production at its Gigafactory in Nevada, company CEO Elon Musk expects the company to be a big player in the market.
Petersen believes storage will eventually reach most homes. “Within 10 years,” he said, “it’s going to be like any other appliance.”
Players in the Home Storage Market
– LG Chem – A leading manufacturer of auto batteries, the South Korean company has residential-sized lithium ion storage systems. It teamed up with solar installer Sunrun in October to go deeper into the residential market.
– Sunverge – The Bay Area company, founded in 2009 and backed by French energy giant Total, offers eight choices for solar energy storage. The range of AC and DC storage systems from 7.7 to 19.4 kilowatt hours.
– SimpliPhi – The Ojai-based company has been in the battery business for about 15 years, longer than many rivals, with a client base that includes Whole Foods, Hollywood studios and the military. It offers a range of storage products. It says its inventive, stable battery chemistry – lithium ferrous phosphate – runs cooler and more efficiently than lithium ion cobalt batteries.
– Sonnen – The German company arrived on U.S. shores this year. It’s been successful in its home country, where regulations for renewable energy make battery storage economical. The company has a wide range of lithium ion storage and has installed more than 10,000 systems worldwide.
– Tesla – The Palo Alto electric vehicle maker jumped into the residential market with the Powerwall and also offers the commercial-sized Powerpack. Although Tesla is a newcomer to home storage, it’s teamed with Panasonic and brought a marketing fever to the industry. Next year, the company will release Powerwall 2, a 14 kilowatt hour package selling for $7,100, including installation and additional hardware. The new product has been placed in some Tesla stores.
– Mercedes – The German auto maker has moved into direct competition with Tesla with a sleek battery-pack design. Products are expected to come to the U.S. in 2017.
– Orison – The San Diego start-up has introduced 2.2 kilowatt hour panels for home use. The company says the batteries’ design lends itself to home decor as well as storage. Starting at $1,600, it’s aimed at urban dwellers and simple to install – just plug it into a wall and smart software adjusts power usage. Its first products – a panel and tower – are expected to ship early next year.
©2016 the San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.