Updated: Jun 16, 2020
As a solar installer in Denver, Colorado, we receive a lot of questions about solar batteries. With the name-brand storage devices making enormous splashes in the industry, many people are wondering whether or not solar batteries are worth the investment.
Are Solar Batteries Worth It?
In this article, we will outline the different kinds of installations, the cost of batteries, and the factors that influence a solar storage system’s return on investment.
Types of Solar Installations
Before you can decide if a solar battery is worth it, you must first decide if you even need a battery in the first place. Your residential solar installation is likely going to be in one of these three categories:
Grid-Tie Solar Panel Systems (No battery)
Off-Grid Solar Panel + Storage Systems (Battery backed, but not interconnected to the power grid)
Hybrid Solar Panel + Storage Grid Tie System
In most cases, homeowners are able to save money on their electricity costs by installing a grid tied solar panel system. Solar panels will “pay for themselves” as an investment into clean, onsite electricity in place of rising utility costs. Whenever the sun goes down, grid tie systems essentially use the power grid as a battery, drawing electricity as it is needed.
In other instances, like in cabins and RVs, off grid solar batteries are the only choice for storing the energy produced by your panels. For more detailed information about the types of solar installations, you can read our article here.
The Initial Cost of a Solar Battery
Although the cost of solar panels has dramatically decreased in the last ten years, solar batteries still have a lot of catching up to do. Solar storage is one of the most exciting industries to watch as new technologies and products are being continuously developed and released.
With that said, small residential solar batteries cost anywhere between $5,000 and $10,000. This includes the price of the battery in addition to installation costs. Of course, some systems may be eligible for the Federal Investment Tax Credit to reduce the total cost of the installation. Batteries this size are able to run home appliances until they are completely discharged, which is typically between 1 and 4 hours of extra power.
Do solar panels work when the grid goes down?
The most common complaint about grid tied solar panel systems is that they do not work when the power goes out. In the case of a power outage (like during extreme weather conditions) solar panels and inverters connected to the grid are no longer be able to produce electricity for the safety of the workers repairing the power lines.
This is true both for grid-tie and hybrid solar systems with low end components. Although national companies do a good job of marketing misinformation, serious upgrades are needed in order to continuously run an off-grid residential solar setup. Basic batteries and inverters still use utility power in order to function.
In reality, the most basic equipment to have a true grid-tie/off-grid hybrid system will cost between $20k and $30k (plus the cost of the panels and labor). Additionally, if you want a battery with enough capacity to store an entire day's worth of home electricity, they typically cost upwards of $50,000.
How to Calculate if a Solar Battery Backup is Worth It
For some, having a source of backup power ready when the grid goes down is priceless. With cost not being an issue, many homeowners rest assured knowing that their solar battery unlocks the potential of a completely self-sustaining electrical system.
For most, however, the cost of a solar battery is simply too high to make sense financially. The most prominent factors in solar storage ROI are:
Net Metering Availability (Check your utiliy’s solar policy)
Current System Compatibility
Frequency of Grid Blackouts
Utility TOU Metering
When net metering is available (as it is for most Colorado residents), homeowners are only charged by the utility for the electricity they use if it exceeds their solar system’s production. Likewise, the utility company may even credit your account for months in which your panels produce more electricity than your household consumes.
Because of this, it is very difficult to say that solar batteries are worth it for grid tie systems. Sure, your system will go down in the event of a blackout, but the extra $10,000 spent on storage may not be worth it if it is only used a few times per year.
With that said, solar batteries are worth it for people looking for absolute grid independence. If your utility instills costly time of use metering, where you are charged more money per kWh during peak periods, homeowners can avoid extra costs with a solar battery. Optimizing your solar’s self-consumption is known as “load shifting” and is particularly valuable if your utility does not offer full net metering.
Ultimately, the decision to buy a solar battery lies on a case by case basis. For most of our residential solar installations here in Colorado, we do not feel as if backup batteries are worth it at this time. However, with new "grid agnostic" technologies on the way from companies like SolarEdge and Enphase, we are still very excited for the future of solar storage.
If you are interested in learning more about solar batteries for residential systems, feel free to contact us today.