Thinking of getting battery storage for your solar system? Here’s six tips to help you figure it all out.
Batteries can let you keep — and use — all of your solar energy. Depending on its size, a battery storage system installed at your home or business stores all that extra solar energy you make during the day. When the sun goes down, you use the energy from the battery, not the utility.
It’s really cool — and it might make sense for you. The utilities are increasing evening rates, lawmakers just approved a Solar Rights Alliance-backed rebate program for battery storage systems and, in some cases you could also be eligible for a healthy tax credit on top of the rebate.
But as always, it pays to do your homework before making the investment.
1. Figure out if you are affected by the new “Time of Use” evening rates.
One of the great things about going solar is that any extra energy you make but don’t use during the day gets credited when you use it later — such as at night. Many solar users have been able to cover all of their energy use, day and night.
But utilities charge customers different rates, depending on the time of day and amount of usage. This is sometimes called “Time of Use” rate pricing.
Until recently, utilities’ rates were higher during the day than at night. That meant that the extra solar energy you made during the day had a greater value than the energy you would have otherwise purchased from the utility at night. Your solar energy credit could cover a lot of evening electricity that way!
But now the utilities are making evening rates higher at night than during the day. For those affected, that extra solar energy they make during the day has less value than before, and pays for less evening electricity use than before.
That’s the bad news. But whether your bill will actually go up or not depends on several factors, including when you purchased your solar system, who your utility is and where you live. Some solar users may not see a change in their evening rates for a few years. The earliest solar users may not see a change for twenty years. Check with your installer if you’re not sure.
Furthermore, even if your evening rates are going up, it is possible you won’t actually pay more. Even if your credit covers less evening use, the difference may be negligible, especially if you don’t use a lot of electricity at night. The best way to figure that out is to review your monthly statements and annual true-up statement and see if there is a change.
If the increased evening rates will significantly affect your electricity bill, this might be a good time to look into batteries.
2. Determine if you are eligible for the state’s energy storage rebate.
California offers a rebate of 30% – 50% of the cost of a battery storage system. If you are buying a battery for your daily energy use, not as a backup, you are likely eligible for this rebate. Your installer will typically handle the rebate paperwork (see more below on this). Really nerdy details here.
(Shameless plug: this rebate was set to expire and the utilities lobbied furiously to keep it that way. Solar users and our allies in the solar industry overcame the utilities with a fierce campaign. There truly is strength in numbers! Join Solar Rights Alliance now.)
3. Determine if you are eligible for the federal Investment Tax Credit.
You may also be eligible for a federal tax credit worth 30% of the cost of a battery system. If you install batteries with solar at the same time, you are mostly likely eligible for this credit. If you are simply installing batteries, you are eligible only if your battery system is 100% charged by your solar panels. Learn more about how to claim the Federal ITC.
4. Noodle around the internet to get a sense of what kind of battery products are out there.
Solar Rights Alliance does not provide product endorsements, nor are we implying you should go with a big company. We simply recommend this step so you have a sense of what the product is.
5. Get an estimate from three installers.
If you already have solar and were pleased with the work your installer did, give them a ring and ask if they also install battery systems. If they do, have them come out and give you an estimate.
But even if you’re inclined to use your original installer, we still recommend that you always get a total of three bids for any job. It is a little more work, but will give you more options to work from.
Refer to our “Six Tips for Finding a Solar Installer” for finding your three installers to get a bid from. Look for an installer that either has experience with battery storage, or has been doing solar installations for awhile.
6. Know what to expect.
Barry Cinnamon, owner of Spice Solar in Campbell and host of The Energy Show podcast says that installers should provide accurate estimates for the installation of a battery storage system and prepare customers about four uncertainties:
First, interconnecting your new storage system to the grid, and then getting your storage rebate is a time consuming task. It could take 6-12 months, according to Barry. Not only is that annoying, but it increases the cost of your system because your installer has to spend time on it. Even if you already have solar and are simply adding the battery, you will have to go through the interconnection process again, and your net metering tier will reset to the most recent one. You can thank the utilities for throwing all that extra red tape and cost into the process (join Solar Rights Alliance to fight back!).
Second, wiring the backup subpanel and connecting some of the parts to your electric panel can be tricky and expensive depending on the location of circuits in the house and the age of your electric system. Installers should provide an accurate estimate for this work.
Third, many of the most popular batteries are in short supply, so your actual installation may be delayed.
Finally, your actual savings can be hard to predict. They depend on time of use electric rates and when you consume energy in your home or business. These parameters can sometimes be hard to predict, as your energy habits may change over time.
In general, Barry says a residential consumer of a mid-ranged sized home should expect to pay between $6,000 and $12,000 for a battery once the rebate and tax credit are factored in.
Conclusion: we’d love to hear from you!