Investing in a solar PV system is a big decision. But here comes the caveat! Deciding whether to include an Energy Storage System (ESS), otherwise known as a solar battery system, is something else altogether!
Battery technology has advanced in recent years, with new players on the market making it more competitive. There are a number of different battery technologies out in the market and choosing one really depends on one’s needs and of course budget.
Want to go off grid, have a battery backup system or merely increase your level of self-reliance?
Well, your goal will impact the type of battery system you invest in.
Energy Storage Systems aren’t for everyone though, so here we look at the pros and cons of investing in an ESS.
8 Pros of Investing in an Energy Storage System
Luckily there are probably more pros than cons to investing in energy storage, especially when it comes to solar power! The pros vary and depend on the type of system setup. i.e. grid-tied with battery backup vs off-grid mode.
1. Battery Backup
If you have a grid-tied solar PV system it produces clean energy during daylight hours to power your internal electrical appliances. Any excess power is fed back into the grid. However, should your utility experience an outage then you will be left in the dark—pardon the pun!
Having a battery backup system incorporated into the design of your solar PV system will provide backup power for a limited amount of time.
How much backup power you have though depends on how much power is being drawn from the battery system and for how long. This will also be impacted if it’s day or night as if it’s during the day any power demands will be supplemented by both the PV and battery system.
2. Increased Self-Reliance
Unfortunately, solar power only produces electricity during the day when we aren’t home. Most of the electricity we consume in our homes is in the evening.
Having a slightly larger solar PV system will allow you to store the excess energy produced in the battery system for use later when you need it. A perfect example of this is in the evenings when your lights are on or you are cooking, using the dishwasher etc.
This approach will also reduce the amount of electricity you draw from the grid and will reduce your electricity bill further.
In the absence of an energy storage system, you would feed the excess electricity into the grid for a financial benefit. However, most of the time the feed-in tariff is less than what you pay for energy imported from the grid.
So having a battery system will assist in reducing your electricity bill even further.
3. Load Shifting
The time of use (TOU) tariff quite commonly found in commercial or industrial facilities is increasingly becoming more mainstream for residential utility customers.
The TOU tariff charges different kWh rates depending on the time of day and time of year. Typically kWh rates would be cheaper during the day and more expensive at night based on the fact that demand for electricity is higher during evening time.
Load Shifting is the practice of moving energy consumption from peak tariff hours to either period of the day when the tariff is lower or moving the energy consumption to an alternative source.
A good example of this is using energy stored in a battery system during peak tariff hours.
If you are on a standard flat tariff rate then this wouldn’t apply though.
4. Limit Losses of Reduced Feed-In Tariffs
Feed-in tariffs were originally introduced by governments to promote and incentivise the uptake of renewable energy as a clean source of electricity production. Since then, though, there appears to be an international trend by governments to reduce the feed-in tariffs. As solar PV approaches the cost of grid parity, the feed-in tariff will probably be reduced further.
Many homeowners are not fully benefiting as the feed-in tariff rate ends up being significantly less than the retail utility consumption rate or import tariff rate.
Having a battery storage system allows you to store any excess energy for later use and limit the amount of electricity fed into the grid, thereby reducing any feed-in financial losses.
5. Reduce Your Carbon Footprint
Most if not all utilities rely on fossil fuel to a certain extent to produce electricity. This means the CO2 emissions for the grid electricity you use will vary depending on the energy mix of the utility operating in the state you live in.
Some states have higher grid CO2 emissions factors than others.
Having a solar PV system with an energy storage system will reduce your carbon footprint significantly.
Use the Australian government’s EPA carbon emissions calculator to determine your grid electricity’s carbon emissions.
6. Energy Trading
Fancy being an energy trader and playing with the big boys? Recent advances in AI and blockchain technology have opened a whole realm of opportunities.
Reposit Power is a perfect example of a startup that has developed technology enabling an owner of solar PV and energy storage systems to export excess power into the grid and sell it at a premium. It does this by tapping into the National Electricity Market, taking advantage of what was only available to the big utility players before.
Reposit’s unique software puts your energy storage device in constant communication with the NEM so that it ‘knows’ when to sell electricity to maximise your profits, based on parameters such as your home’s energy consumption habits, weather, grid demand, and future energy prices.
In essence, you are your own mini power station and micro energy trader!
Expect to see more developments in this space in the near future!
7. Become Part of the Smart Grid Revolution
The electricity grid hasn’t changed much in the past 100 years, but that’s all about to change!
Enter the smart grid!
Currently, the grid is old and antiquated and doesn’t cater for today’s digital economy.
The smart grid will allow bi-directional flow of information between the utility and its customers. It will be the grid of the future, more efficient, have self-healing properties, provide a bi-directional flow of data real time, and include automated and interactive technologies that optimise the physical operation of electrical appliances.
Morgan Stanley has predicted that over one million battery systems will be connected to the grid before the end of the decade.
These battery systems will form an intricate part of the smart grid, allowing consumers of electricity not only to import energy but also sell, generate, and distribute their own clean energy into the grid from their solar PV and energy storage system.
By having an energy storage system, you can be a part of the smart grid revolution!
8. Become Energy Independent
There’s something about going off-grid that brings a feeling of inspiration and freedom. Not relying on your local utility to provide power but generating your own clean electricity—100% of it!
In the past, one would require a large battery bank to provide enough juice to power your house for when the sun ain’t shining. Nowadays though, with Lithium-ion battery technology, you no longer require a whole room dedicated to batteries!
One does need quite a large solar PV system, however, to cater for all your electrical loads plus a bit extra to charge the battery system.
You also need to cater for a certain number of days autonomy for when weather conditions are poor so you aren’t able to maximise your solar power output.
Going completely off-grid also means you no longer have to be subjected to ever-increasing electricity costs!
Now for the Cons!
As with everything in life, there are advantages and disadvantages.
Let’s look at some of the disadvantages of implementing a Solar Battery System.
1. High Cost
The cost of energy storage is quite high and can quite easily increase the cost of your solar PV system substantially.
So it doesn’t always make financial sense to install an energy storage system—it really depends on your consumption tariff rate. Therefore it’s worth calculating what your return on investment would be if you had to invest in a solar battery system.
Costs are coming down and technological advances are being made in the energy storage space. At some point, energy storage will likely achieve the same cost reductions as solar PV did a few years back, putting it into financial reach for more people and also improving the cost effectiveness.
Designing and installing an energy storage system increases the complexity of the solar PV system.
This also means more things can go wrong, in both the design, installation and operation of the battery system.
During the design phase, it’s crucial that the battery system is sized correctly for the requirements, and the right size cables and switches are installed.
Solar battery systems also need to be located in a cool environment with adequate ventilation as they don’t like heat!
The right type of environment or enough space might not always be available.
3. Increased Maintenance
Whereas solar PV systems are relatively easy to maintain, including a battery system does increase maintenance requirements, although the level of maintenance depends on the type of battery technology you are using.
With deep cycle lead-acid batteries, the water levels need to be periodically topped up and the terminals kept clean. One can’t use normal water either—it must be distilled water.
The chemicals in batteries are normally highly toxic and corrosive, so care also needs to be taken.
However, other more modern types of energy storage batteries such as lithium-ion are generally maintenance-free.
This also depends on the type of solar battery being used and the level of battery discharge.
Lead-acid batteries can only be discharged to a maximum of 50%. Discharging these type of batteries more than that decreases the lifespan of the batteries considerably.
Lithium-ion batteries can be discharged up to 80% though.
Expect to replace your battery system at least once during the lifespan of your solar PV system.
Deciding on whether to invest in an energy storage system is not an easy one.
One really needs to do their homework and weigh up the pros and cons.
Is the extra expense worth it?
If you are on a TOU tariff or in an area that is prone to blackouts then it could be worth the extra investment. Or if your utility supplier has a high carbon emissions factor due to excessive use of fossil fuels and this keeps you up at night, then an ESS would be ideal.
Take into account the extra maintenance that might be required and if you have the right environment for storing your solar battery system.
Also be aware that you will more than likely have to replace the battery system at least once during the lifespan of your solar PV system.
There are many pros and cons, but now that you’re informed you can make the right decision.
If you want to see how much solar or battery storage could save you over the next 5 years, then take our solar saving calculator quiz below!
Or talk to an Instyle Solar expert about the best solutions for home energy storage or PV-panels.
Otherwise, head back to the solar blog to find even more great educational content.
Photo credit: Depositphotos, EnergySage