Can Solar Residential Storage Systems Save Money?

How can solar energy be stored in batteries?

Pairing batteries with solar panels eliminates the biggest challenge of using solar energy: its variability. Additionally, the time of day with the highest electricity demand is usually when the sun sets. Solar panels are most efficient during midday when electricity demand is low. Most solar energy system owners use the grid as their battery: when they generate more electricity than they consume, their panels send the excess power to the grid. In most states, their utility companies provide credits for the excess power through net metering programs. Then, this credit is used to offset the excess power used by the homeowner when their consumption exceeds their production.

How can solar energy be stored with batteries?When integrated with battery storage, solar panels can send the electricity they generate to the house, grid, or battery storage device. Part of this process involves one or multiple inverters that convert alternating current (AC) to direct current (DC) and vice versa. For new installations with solar panels and batteries installed concurrently, only one inverter is needed - to convert DC power from the solar panels for household use and then send it to the grid, both of which operate on AC power. The battery directly stores energy in DC form from the solar panels. For existing homes with solar panels but adding storage capability, the system already has one inverter that converts DC power to AC, so a second inverter is needed to convert the AC power back to DC for storage - a less efficient process.

Can solar storage systems save money?

Although the upfront cost of a solar + storage system is higher, the return on investment can be higher depending on the scale of the system. Solar battery backups not only provide peace of mind but also save money for homeowners and generate income. Different utility companies have different rate structures: some charge a flat rate per kilowatt-hour consumed; others charge surplus for high-demand customers; some have time-of-use plans where electricity is cheaper during off-peak hours. How can solar energy be stored? Solar + storage systems can leverage any of these rate structures by reducing the demand for grid electricity (including during peak demand times), or storing energy from the grid when it is cheapest and using it from the battery during the most expensive grid power times.

For residential customers, earlier studies by RMI predicted that solar + storage systems will become cost-effective in many parts of the U.S. by 2025 to 2030. However, the cost-effectiveness equation for residential customers is changing at a faster pace than anyone anticipated, with the continuous reduction in the cost of solar systems and lithium-ion batteries.

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