How to Purchase the Best Solar Battery Storage System

What you need to know about adding battery storage to your property, such as the Tesla Powerwall.

Home battery storage is a popular topic among environmentally conscious consumers. If you have solar panels on your roof, it makes sense to store any unused electricity in a battery for use at night or on cloudy days. But how do these batteries work, and what should you know before you install one?

How do home solar batteries function?

Home battery storage is not a novel concept. Off-grid solar photovoltaic (PV) and wind energy generation on remote properties has long relied on battery storage to capture unused electricity for later use. Storage batteries are becoming increasingly popular with new solar installations, and it’s possible that most homes with solar panels will have a battery system within the next five to ten years.

A battery stores any unused solar power generated during the day for later use at night or on days with little sunlight. Battery-powered installations are becoming increasingly popular. There is a real appeal to being as disconnected from the grid as possible; for most people, it is not only an economic decision, but also an environmental one, and for some, it is an expression of their desire to be independent of energy companies.

You can run your home entirely on solar power if your solar panel array and battery are large enough. Depending on the time of day and electricity tariffs in your area, using electricity from your battery may be less expensive per kilowatt-hour (see Terminology) than using electricity from the grid.

According to Sunwiz, there were approximately 110,000 home storage batteries installed in Australia as of 2020, and approximately 9% of new solar installations in 2020 included a battery.

What is the price of a home solar battery?

Solar battery prices vary greatly, but in general, the larger the battery capacity, the more you can expect to pay.

The following are some typical battery prices for some common nominal capacity sizes (these generally cover just the battery – installation is extra).

• 5kWh: starting at $6000
• 10kWh: starting at $10,500
• 13kWh: starting at $13,000

One of the most popular batteries, for example, is the 14kWh Tesla Powerwall 2. Costings on this particular battery can be on the high side, and with Tesla quite regularly changing their buy price it can be hard to bolt down a price. As a guide though you can expect to pay  +$17000 for a fully installed Tesla Powerwall 2 including the gateway needed for a new Tesla install.

Lower-end prices are typically for a battery pack only (cells plus battery management system). Higher-end prices frequently indicate that the battery system includes a built-in battery inverter as well as other integrated components. When getting quotes, make it clear whether the cost of a new inverter and additional electrical work is included.

It may be more cost-effective to purchase a battery as part of a new solar panel system package rather than retrofit it to an existing system, especially if the existing system is several years old and may require significant upgrading to accommodate the battery.

Recent Solar Battery Installations

Are home solar batteries a good investment?

Batteries are still relatively expensive, and the payback time on the more expensive batteries can be longer than the  warranty period (typically 10 years).

A lithium-ion battery and hybrid inverter currently cost between $8000 and $15,000 (installed), depending on capacity and brand. As the electricity market evolves over the next few years, and (hopefully) battery prices fall, it may become economically viable for the average home to include a storage battery with their solar PV system.

For some homes, a storage battery may make financial sense. Households with high power consumption that are savvy about using solar-generated and stored power can pay for the battery in less than ten years.

And many people are now investing in home battery storage or ensuring that their solar PV systems are battery-ready. Batteries are frequently viewed as being less about pure economics and more about being as disconnected from the grid as possible. This is especially true for homes in areas with frequent blackouts or other power supply issues.

We recommend getting two or three quotes from reputable installers before committing to a battery installation. The trial results show that you need a strong warranty and commitment to support from your supplier and battery manufacturer in the event of a fault.

Subsidies, rebates, and Virtual Power Plants

Government rebate programs and energy trading systems like Reposit can definitely make batteries more affordable for some households. Aside from the standard Small-scale Technology Certificate (STC) financial incentive for Solar installations, that applies across Australia, some states and territories are currently offering rebates or special loan schemes for batteries:

Rebate schemes change from time to time, so it’s worth checking the Federal Government energy website to see what’s available in your area.

Most states also have various Virtual Power Plant (VPP) programs that can help reduce the cost of a battery. By enrolling in a VPP program, you agree to make the stored energy in your home battery available to the VPP operator, who can then use it to supply the grid during peak demand periods.

In exchange, you receive a subsidy, which could be reduced energy bills, a rebate toward the purchase of the battery, or even free solar and battery installation. However, even joining a VPP program does not always guarantee that your battery will pay for itself.

Don’t overlook the feed-in tariff.

When calculating whether a battery is a good investment for your home, keep the feed-in tariff in mind (FiT). This is the amount you are paid for any excess solar power generated by your panels and fed into the grid.

You will lose the feed-in tariff for every kWh diverted instead into charging your battery. While the FiT is generally quite low in most parts of Australia, it is still an opportunity cost to be aware of. In areas where the FiT is generous (such as the Northern Territory’s FiT for legacy solar installations), it may be more profitable to skip the battery and simply collect the FiT for your surplus power generation.

Insurance for your home

Because your solar panel system (panels, inverter, and battery if you have one) is a component of your home, it is covered by your homeowners insurance. However, you should ensure that your home’s insurance coverage is increased to cover the cost of replacing the solar panel system.

Off-grid vs. grid-connected

There are four main ways to connect your home to the power grid.

Grid-connected (no solar)

The most basic configuration, is in which all of your electricity comes from the main grid. There are no solar panels or batteries in the house.

Solar on the grid (no battery)

The most common configuration for solar-paneled homes. The solar panels provide power during the day, and the home generally uses this power first, relying on grid power for any additional electricity required on low-sunlight days, at night, or during times of high power usage.

Solar + battery on the grid (aka “hybrid” systems)

Solar panels, a battery, a hybrid inverter (or possibly multiple inverters), and a connection to the main power grid are all included. During the day, the solar panels provide power, and the home generally uses solar power first, with any excess used to charge the battery. When there is a high demand for power, such as at night or on cloudy days, the home draws from the battery, and as a last resort, from the grid.

Off-grid

This system is not linked to the main power grid. Solar panels provide all of the home’s power, and possibly some other types of power generation as well, such as wind. At night and on days with little sunlight, the battery serves as the primary power source. The final backup is typically a diesel-powered generator, which may also be activated if there is an unexpectedly high demand for power such as when a pump starts up).

Off-grid systems are typically more complex and costly than grid-connected systems. They require more solar and battery capacity than a typical grid-connected system, as well as inverters capable of handling higher loads to meet peak demands. Off-grid homes must be particularly energy-efficient, and load demand must be carefully managed throughout the day.

Off-grid systems are typically appropriate for remote properties where a grid connection is either unavailable or prohibitively expensive to install.

What happens during a power outage?

Having a battery does not necessarily protect you in the event of a blackout for most grid-connected systems. Despite having solar panels producing power and a charged battery ready and waiting, you may still lose all power to your home.This is because grid-connected systems have “anti-islanding protection.” During a power outage, the grid and any engineers working on the lines must be protected from “islands” of electricity generation (such as your solar panels) unexpectedly pumping power into the lines. The simplest way to provide anti-islanding protection for most solar PV systems is to completely shut down. As a result, when it detects a grid outage, your solar PV system shuts down and you lose all household power.

During a blackout, more sophisticated inverters/batteries can provide anti-islanding protection while still keeping the solar panels and battery running so that the house has some power. However, expect to pay significantly more for such a system because the hardware is more expensive and you may require more solar and battery capacity than you think to power the house for a few hours during a blackout.

In that case, you should probably only allow critical household circuits to operate, such as the refrigerator and lighting. This may necessitate additional wiring. A storage battery will be quickly depleted if it also has to power things like a pool pump or underfloor heating, both of which consume a lot of power.

Specifications for batteries

These are the primary technical requirements for a home battery.

Capacity

The amount of energy that a battery can store, usually expressed in kilowatt-hours (kWh). The nominal capacity of a battery is the total amount of energy it can store; the usable capacity is how much of that energy can actually be used after the depth of discharge is taken into account.

Discharge Depth (DoD)

This is the amount of energy that can be safely used without accelerating battery degradation, expressed as a percentage. To avoid damage, most battery types must maintain a charge at all times. Lithium batteries can be safely discharged to 80-90% of their rated capacity. Lead-acid batteries typically have a discharge capacity of 50-60%, whereas flow batteries have a discharge capacity of 100%.

Power

The amount of power (in kilowatts) that the battery can provide. The maximum/peak power is the maximum amount of power that the battery can deliver at any given time, but this burst of power is usually only sustained for short periods of time. The amount of power delivered while the battery is fully charged is referred to as continuous power.

Efficiency

How much the battery will actually store and discharge for every kWh of charge applied. Although there is always some loss, a lithium battery should be more than 90% efficient.

Number of charge/discharge cycles totaled

This is the number of charge and discharge cycles the battery can perform before it is considered to have reached the end of its life. This may be rated differently by different manufacturers. Lithium batteries typically have a lifespan of several thousand cycles. You can expect to use about 1.5 cycles a day for the average home.

Lifespan (years or cycles)

The battery’s expected life (and warranty) can be expressed in cycles (as mentioned above) or years (which is generally an estimate based on the expected typical usage of the battery). The lifespan should also include the expected capacity at the end of life; for lithium batteries, this is typically 60-80% of the original capacity.

Temperature range in the environment

Batteries are temperature sensitive and must operate within a certain temperature range. They can degrade or shut down in extreme heat or cold.

Solar battery types

Lithium-ion

These batteries, which are the most common type of battery installed in homes today, use similar technology to their smaller counterparts in smartphones and laptop computers. Lithium-ion chemistry is classified into several types. Lithium nickel-manganese-cobalt (NMC) is a common type used in home batteries and is used by Tesla and LG Chem.

Lithium iron phosphate (LiFePO, or LFP) is another common chemistry that is said to be safer than NMC due to a lower risk of thermal runaway (battery damage and potential fire caused by overheating or overcharging) but has a lower energy density. LFP is used in home batteries made by companies such as BYD and Sonnen, among others.

Pros

• They can perform thousands of charge-discharge cycles.
• They can be heavily discharged (up to 80-90% of their total capacity).
• They can withstand a wide range of temperatures.
• In normal use, they should last for 10 years or more.

Cons

• Large lithium batteries may face an end-of-life issue.
• They must be recycled in order to recover valuable metals and avoid toxic landfills, but large-scale programs are still in their early stages. As lithium batteries become more common in homes and automobiles, recycling processes are expected to improve.

Lead-acid, plus lead-acid (lead carbon)

The same technology that powers your car’s starter is also used for larger-scale storage. It’s a well-known and efficient battery type. Ecoult is one company that manufactures advanced lead-acid batteries. However, without significant improvements in performance or price reductions, it’s difficult to see lead-acid competing with lithium-ion or other technologies in the long run.

Pros

• They are relatively inexpensive and have well-established disposal and recycling processes.

Cons

• They’re big.
• They are susceptible to high ambient temperatures, which can reduce their lifespan.
• They charge at a slow rate.

The flow battery

This type, one of the most promising lithium-ion alternatives, uses a pumped electrolyte (such as zinc bromide or vanadium ions) and chemical reactions to store and release charge. The main flow battery currently available in Australia is Redflow’s ZCell battery.

Pros

• They can be discharged to 100% capacity with no residual discharge and will not lose charge over time.
• They do not degrade over time.
• They perform well in hot environments.
• They are relatively simple to recycle.
• They should last for at least ten years.

Cons

• Because they are new technology, they are more expensive than lithium-ion batteries.
• They are sensitive to cold (below 15°C).
• They require frequent maintenance, which causes them to be temporarily unavailable.

Other kinds

Battery and storage technology is advancing at a rapid pace. Hybrid ion (salt water) batteries, molten salt batteries, and graphene supercapacitors are currently available technologies. At the moment, none of these are commonly used.

How long will a solar battery last?

In general, most solar battery types should last 10 years or more under normal conditions and if not subjected to extreme temperatures. That is, they should be able to last as long as their warranty period, which is typically 10 years for most models.

However, there is insufficient market data to determine whether modern solar batteries typically last that long in real-world home installations – recent generations of batteries have only been available for a few years.

The results of lab tests on battery durability and lifespan have not been encouraging. A recent solar battery trial in Australia revealed a high failure rate. Only six of the 18 batteries in that trial worked without incident. The remaining 12 batteries either had operational issues, failed and had to be replaced, or failed and could not be replaced (for example because the manufacturer was out of business or would no longer support that product).

However, based on consumer reviews on a variety of websites, it appears that most households with storage batteries are satisfied with them so far, particularly with the major brands. Some customers report issues with battery failure or customer service from the supplier, but the batteries appear to be performing as expected in the majority of cases.

Future Electricity Market Changes

The Australian electricity grid was not originally designed to handle large numbers of homes exporting solar power into it. There are proposals for modernizing the grid and managing it more effectively and fairly, including a possible surcharge – or “solar tax” – on owners of solar PV systems who want to sell excess power to the grid. What is the significance of this, and does it imply that a storage battery is now a better option?