Are Solar Batteries Cost-Effective? We Break It Down

Are Solar Batteries Cost Effective? We Break it Down

So, you’ve already made the decision to add a solar energy system to your home – or you have one already. That’s great! Now the decision comes on whether you should have a method of storing the excess energy produced by your panels or simply to return it to the grid. Here we give an overview of the factors influencing the cost efficiency of different types of solar batteries for energy storage.

Are solar batteries cost-effective? Depending on the type of battery you choose to add to your system, solar batteries can be extremely cost-effective. Lithium batteries are the most cost-effective out of the four main battery types: lead-acid, lithium, nickel-cadmium, nickel-iron.

The cost-effectiveness of solar batteries is very much based on the reason behind your need. For most residential uses, solar batteries are another way to ensure reduced electric bills by storing energy that would otherwise be returned to the grid. However, the different chemical compositions of batteries pose a variety of advantages as well that may make them more or less suited for your needs.

How Much Does a Solar Battery Cost?

Naturally, one of the most intimidating things about going solar is the overhead cost. We all know good and well that the long-term benefits are exceedingly worth it – every salesman, environmental scientist, and even layperson pushing for sustainable energy has repeatedly shown that the ultimate financial relief provided by solar energy will far outweigh any price you pay to switch over to it.

Still, not many people are in a position to make that kind of payment in a short – or even long – period of time. Because of this, many would be the wiser to begin planning very early on if their ultimate plan is to go off-grid, or at least, live a more eco-conscious lifestyle.

Solar batteries are estimated to cost between $5000-7000 or more, and if priced by the energy produced per hour, they can be about $400 per kilowatt-hour (kWh) to $750/kWh. These prices indeed sound scary, however, do remember that you have a bit of wiggle room based on the materials you choose and the mode of installation. (Consider that the installation is an entirely separate cost.)

The prices of solar batteries, as implied by the pricing per kilowatt-hour, are also very strongly influenced by the amount of energy they are capable of producing. This is an important factor to keep in mind for those who plan on going solar to live fully off-grid since your overhead cost is likely to be a lot higher than someone who is only supplementing their energy consumption.

Caveats to Solar Battery Pricing

Surprise! There are even more things to consider when planning to buy a solar battery. Besides materials, power capacity, and installment fees (and, likely, manufacturer as well), another aspect to be aware of is the possibility of “time-of-use” (TOU) fees hiking up the cost of your solar battery. Other forms of utility charging are “demand charges” and “reduced/no net metering.”

Generally, you need to be aware of the logistics of your utility charges. This is because there may be different rates based on energy use at the time of day, monthly, or standard charges. These factors will directly influence not only the cost of your solar battery but also determine whether or not the purchase of a solar battery is ultimately the right choice for you at all.

Time of Use Rates

Utilities that are charged by TOU rates will result in you paying more per kWh used during the hours of the day’s peak energy use (these rates can get up to twice as much as standard rates). Californian homeowners or renters need to be especially aware of this, as prices reached as high as $0.46/kWh during peak energy consumption in the summer.

Demand Charges

Alternatively, there are “demand charges:” these are determined either by the amount of electricity consumed during peak hours or the amount consumed during an entire month. With demand charges, the solar battery can help you to reduce your costs by supplementing your energy consumption either during peak hours only or throughout the entire month.

Reduced or No Net Metering

This is another circumstance in which purchasing a solar battery would potentially be a helpful option for reducing not only your carbon footprint but your electricity bill as well. In a reduced/no net metering system, the utilities are offered at what is referred to at a “wholesale” rate, where credits are offered for the amount of solar electricity sent back to the grid by your solar panel.

In this case, your battery would be immensely more useful than in the other two scenarios because the energy you may have returned to the grid can simply be used at your home instead. Additionally, you’ll reduce the amount of electricity you would otherwise purchase at standard rates.

How Does a Solar Battery Work?

The standard solar system is composed of…

  • A solar panel
  • An inverter
  • Mounting equipment to support the solar panels on your roof or elsewhere
  • Performance monitoring system

As you know, the function of the solar panels is to bring in energy from the sun and convert it into electricity. This electricity is then passed through the inverter, and then further converted into the appropriate form to be used in your home.

Most residential solar systems maintain a direct connection to the electricity grid, making them “grid-tied.” When there is an excess amount of energy produced by your solar panel, the panel automatically returns this excess to the power grid (this is the process that determines the price of the reduced or no metering system mentioned above).

Alternatively, when your solar panels do not produce as much energy as you need, this process is essentially reversed, wherein power is drawn from the grid. How this typically works on your end is: The credits you’ve earned by the excess energy being returned to the grid can then be used for the additional energy you are then consuming.

The Solar-Plus-Storage System

Now, you add a battery. How is the energy stored in this battery? Sometimes solar batteries have their own inverter and can convert the energy when appropriate. Of course, the higher the battery’s capacity, the more energy that can be stored. As previously mentioned, this storage cuts the process of returning and “withdrawing” excess energy to and from the grid and allows you to simply keep it for later use.

Instead of the excess energy being later drawn from the grid when your panels are, for some reason, not producing enough on their own, they can instead draw energy stored in your battery. Keep in mind that your panels are still fully capable of returning energy to the grid. However, this happens only when the battery is fully charged and can no longer take in excess energy.

This is especially useful in seasons where there is a shortage of sunlight (i.e., rainy or winter season). Additionally, you’ll have additional insurance of available electricity in the event of a power outage. Now that you know the basics of how the battery works consider how possible accessories would influence the price and efficiency of your solar battery.

Solar Battery Components

The battery that works in tandem with the solar panel has a few components of its own: the charge controller and inverter. With these additional components, a 12-volt solar battery can take approximately five to eight hours to charge (to give you an idea of just how quickly and efficiently these batteries can store excess energy for you).

The charge controller is an optional component to your solar battery and directly influences the maximum amount of power your battery can store. The addition of the charge controller also depends greatly on the size of your solar system, as the maximum power point tracking (MPPT) circuit maximizes the transferred energy of the system. It also helps by disconnecting the solar panel when it reaches full capacity.

The inverter, on the other hand, is not optional, however, having the same function as it does for the panels – converting the electricity to a form that is usable in your home.

Different Types of Solar Batteries

There are four main types of solar batteries: lead-acid, lithium, nickel-cadmium, nickel-iron. By far, lithium-ion batteries have had the greatest cumulative capacity of all types of solar storage batteries between 2003-2016. They also account for over 80% of power and energy storage methods, while nickel- and sodium-based batteries accounted for about 10% collectively, and lead-acid at 1%.

Lead Acid

Lead-acid batteries are commonly used as automobile batteries. Their electrodes are grids of metallic, lead oxides whose composition changes based on whether it is charging or discharging. This battery’s electrolyte is sulphuric acid. Recent technological developments have made the lead-acid battery one of the best batteries for application in solar systems.

Industrial-grade lead-acid batteries can endure for up to 20 years with moderate care, whereas intermediate batteries can last for an average of 7-12 years.

The lead-acid battery is inexpensive but built quite dependably. Technological developments have continued to improve on this battery type and come along with longer warranty agreements as well.

Lithium

Lithium batteries offer many advantages over traditional battery choices: With an extremely long life cycle and high discharge and recharge rates, these batteries offer a bit more durability and functionality to the solar user who is not afraid to spend just a bit more on quality.

Lithium batteries are particularly great because of their high energy density and relatively low cost per cycle. (Do keep in mind, however, that “lithium battery” is a very general term, and there are six main types of lithium batteries, each with their unique strengths and weaknesses in the application.)

Particularly, lithium iron phosphate (LiFePO4, or LFP) is an extremely stable lithium chemical makeup when compared to other lithium battery types. They can withstand extreme charging conditions and offer plenty of charge cycles due to chemical stability over time.

Something that will particularly come in handy for this battery type is its resilience to harsh environments – perfect for solar users who may just find themselves in a bind regarding energy production or general availability one day due to harsh weather or natural events. They also do not suffer from deficit charging (when the battery cannot be fully charged before being discharged again the following day).

Their efficiency is typically around the 95-98% range, so this alone is a reason to opt for the lithium – specifically the lithium iron phosphate – batteries in terms of economic benefits. Although it may just be a bit pricier at face value, the lithium battery is certain to give you more than your money’s worth due to its longevity and endurance.

NiCad (Nickel Cadmium)

These are alkaline storage batteries, where the positive active material is nickel oxide and the negative contains, of course, cadmium. Although this battery type can offer slight advantages over other battery types, this one may be a bit harder to obtain because of their relatively high purchase price. Additionally, because of the highly hazardous nature of the cadmium, they are also pricey to dispose of.

They can also be difficult to match to your solar system’s needs, because their voltage does not typically match common standards of many solar systems, and its charging curves increase the difficulty of use with certain standard equipment like inverters and chargers. They are also quite inefficient in the conversion of energy at only 65-80%.

Their positives lie in their extensive battery life: however, there is an important distinction to be made. Their battery life is in terms of time and not necessarily a reflection of the number of charge cycles it is able to endure. Because of this, they are excellent batteries for emergency and backup purposes, but not for the solar user who will be regularly producing excess energy to store.

This makes the nicad worth the buck only if you live in an area with lengthy, dark winters and rainy seasons, prone to outages due to storms or similar phenomena, or even if you will be taking your battery with you somewhere where there is no other source of power (i.e. extended RV camping or something similar).

NiFe (Nickel Iron)

The NiFe battery is the original “Edison Cell,” and has a very, very long lifespan. It is an alkaline-type electric cell that uses potassium hydroxide as the electrolyte, anodes of steel wool substrate with the active material, and nickel-based cathodes (also with steel wool substrate) with active nickel material.

Right off the bat, the primary disadvantages of the NiFe batteries are

  • Very low-efficiency rates, typically around 60-65%, but it can even drop to 50%. (They also suffer from high rates of self-discharge.)
  • They have high gassing and water consumption.
  • High internal resistance which can result in significant drops in voltage across series cells.

The weaknesses of this battery can ultimately reduce the overall efficiency of your solar system by up to 25%, so it is important that you seriously consider your reasons for needing this battery if you are leaning toward purchasing a NiFe.

NiFe batteries would be a very costly choice to add to your solar system, ultimately functioning to cost you money than save anything at all. It is highly inconsistent in energy production, as its output voltage varies largely with load and charge, and – due to its overall inefficiency – will require an increase in the size of between 25-40% of your solar panels.

Honorable Mention: Flow

These are a relatively new innovation in the world of solar storage batteries. Specialized for residential solar systems, flow batteries contain a water-based solution of zinc-bromide and are ultimately one of the best battery options for long-term storage. They can last for decades with very little maintenance.

Some of the strongest advantages of the flow battery are

  • Their tolerance for extreme weather conditions (they can withstand temperatures up to 50˚C or 122˚F).
  • The zinc bromide used in the flow batteries is naturally fire retardant.
  • The physical separation of the battery components protects against the hazard of thermal runway (risk of explosion).

Flow batteries are also relatively cheap to refurbish due to their simple construction – this means that you can restore a dead battery simply by swapping the electrode! This simplicity and resulting flexibility essentially cut the price of the battery in half.

It is important to consider, though, that despite these strong advantages, they do offer fewer cycles than other battery types and so can be seen as slightly less efficient when compared to lithium batteries, for example.

Best Solar Batteries of 2019

So, with all this said, how are you supposed to know which battery to choose when most of them offer such unique advantages, and several are extremely long-lived? First, it is important to recognize that the addition of virtually any of these battery types (primarily with the exception of the NiFe battery) to your solar system is likely going to be a tremendous help to both your electric bill and energy consumption.

Solar-storage systems are beginning to gain significant momentum in the industry, particularly in residential systems. This translates to a high rate of innovation, producing better options that even the newest solar users can appreciate.

Especially as we continue to see the increasingly devastating impacts of climate change (such as the recent fires and related energy reductions in California), the energy security provides by the use of a solar battery is a particularly attractive option to those who live in vulnerable areas.

Clean Energy Reviews recently tested two products of one of the leading solar (and, in general, sustainable-) energy producers, Tesla. The two batteries tested for this review were the Tesla Powerwall 2 and the LG Chem RESU lithium batteries, and they were ultimately compared to the BAE gel lead-acid battery and the lead-carbon battery by Narada.

Overview: Battery Cost per kWh Over a 10-Year Period

In general, over the 10-year period, lithium batteries performed significantly better than any other battery in the lineup (all types being lithium LFP, lithium nickel manganese cobalt oxide [NMC], lead-carbon, and gel lead-acid):

The LG Chem RESU and the BYD B-box Pro both cost just about USD 50/kWh/year, whereas the Tesla Powerwall 2 and PylonTech US2000B (both lithium batteries as well) came up close behind around USD 61.37/kWh/year, and the rest were up to USD 75/kWh/year.

Keep in mind that these comparisons are highly general in nature, as the different chemical compositions lend themselves to highly specific advantages and disadvantages based on these differences. The bottom line here is that lithium batteries have been shown once again to have very strong benefits over other battery types to the residential solar system – one of them being a strong price point and savings potential.

How to Choose a Solar Battery

As you can see from this wealth of information, there are many different factors to consider when choosing a battery to add to your solar system or choosing an entire solar-plus-storage system in general. One of the highest priorities in making this decision is the battery’s energy storage capacity and its voltage.

The capacity of the battery is to be considered when you’re determining the purpose for which you are buying a battery to begin with. Do you consistently use more energy than your panels produce? Or are you buying a battery specifically as a backup for power outages or darker seasons? The voltage is crucial, rather, because it needs to match the solar system requirements.

Additionally, you need to be clear on the battery’s cycle life: how many charges and recharges can the unit achieve before it is no longer able to sustain minimum production? This is an aspect that varies greatly by manufacturer.

Detailed Information to Consider

In the words of Tin Hat Ranch: “You can only spend what you make. [With batteries, however,] you can only save so much, and you can never spend all that you save.” The message of this is that you can only save as much energy as the battery capacity you have (one of the critical factors to keep in mind when purchasing a solar battery).

For the average residential solar user, it was recommended that the best “entry-level” solar battery to use was a lithium golf cart battery – why? The standard battery type used in many residential solar-storage systems is the car battery. Even though they are one of the cheapest options, this is truly not the best choice because they…

  • Deliver high amounts of energy over a short period of time, then take an extended period to then recharge.
  • Are very poor at delivering low currents for long periods, such as powering the lights and appliances in your house overnight.

Be careful of a low upfront cost, because this may ultimately translate to a battery that is lower in its efficiency of energy production over time for the sake of a quick jolt of power every now and then.

Buying a Solar Battery – Is It Worth It?

So, in the end, is the solar battery worth the time, money, and overall trouble it takes not only to simply learn about the different types, but take the time to compare manufacturers, battery specifications, and consider the needs of your system? The answer is a resounding yes! Why is that? If you have already taken the step to install a solar system in your residence, you are clearly committed to a more sustainable, energy-secure lifestyle.

Although it can be quite intimidating to begin considering the addition of a solar battery to your system, consider the long-lasting benefits of this addition. As we briefly discussed earlier: the effects of climate change are swiftly becoming more powerful. Communities are seeing power outages all around the world and having a battery to face the possibility of such an event will put you at ease.

Not only that but for those who live in areas that are inclined to harsh environmental fluctuations or seasons with relatively low (or no) sunlight for extended periods, having a backup energy storage option can help to get you through tough times. These reasons alone are enough to begin seriously considering adding a solar battery to your system.

Lastly, remember that the benefits offered by different types of solar batteries offer highly specific advantages over one another: some are suited to use exclusively as an emergency or backup option, while others are recommended for regular use as a supplement to your daily, weekly, or monthly energy consumption.

The Best Solar Battery Option for Your Home

Based on recent reviews and continued innovation, the lithium batteries are looking like the best option for residential solar users everywhere (at least, those looking to supplement regular energy consumption – which is the average use of the home solar system). They have been shown to be the most cost-effective, despite overhead costs, and one of the most long-lived options available.

Additionally, they lend themselves for the strongest uses for homeowners who find themselves in particularly harsh environments, and because there are so many different variations of the lithium batteries, they are by far the most versatile. In addition to regular, basic energy supplementation, they can also be used as an emergency backup system. When considering the type of battery you want to add to your home solar energy system, think of your reasons for needing to add this storage option: for emergencies, frequently-produced excess energy, or general cost reduction? These factors will ultimately greatly assist you in determining the most cost-effective solar energy storage system for your home.


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spgenie

Hi I'm Harris the spgenie! As an engineer, I found myself doing tons of research about solar power, the types of panels, how to store the energy and the best way to finance the project. I thought I'd start this blog to share my findings. I hope you find this useful.

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