With the rising popularity of residential solar panels, many homeowners are looking to pair storage solutions with their PV systems to maximize solar energy usage and offset electricity costs. But adding energy storage comes at an additional price. This article examines the costs of different storage technologies and the factors that influence pricing.
What are the main types of energy storage for solar panels?
There are three primary options for solar energy storage:
Batteries
Lithium-ion batteries are the most common solar storage solution. Major battery types include:
– Lead acid batteries – Inexpensive but shorter lifespan
– Lithium ion batteries – High performance and long lifespan but costly
– Saltwater batteries – Inexpensive and long-lasting but lower energy density
Hydrogen Fuel Cells
Hydrogen fuel cells convert hydrogen to electricity through a chemical reaction. Excess solar energy is used to split water into hydrogen and oxygen. The hydrogen can then be stored until needed.
Pumped Hydro Storage
Pumped hydro facilities pump water uphill to a reservoir when solar output is high then release it to generate hydroelectric power when solar generation is low. This is mainly used for large-scale energy storage.
What factors affect the cost of solar energy storage?
There are several key factors that determine the costs of an energy storage system:
Storage technology
As mentioned above, lithium-ion batteries are the most expensive while lead-acid and pumped hydro storage are cheaper. The level of technological advancement also impacts costs.
Energy capacity
The larger the energy storage capacity, the higher the overall system costs. Capacity is measured in kilowatt-hours (kWh).
Power rating
The power rating, measured in kilowatts (kW), affects the charge and discharge speed. Faster power ratings are more expensive.
Location and installation
System costs can vary depending on geography and installation requirements like wiring and labor.
Additional electronics
Battery inverters, control systems and battery management software also impact the overall price.
What is the upfront cost of battery storage for solar panels?
The upfront cost of solar batteries covers purchase and installation. Key factors include:
Battery size
Larger battery capacity means higher costs. Batteries are sold based on usable kilowatt-hours (kWh). Common residential capacities range from 5-20 kWh.
Power output
Faster solar battery power ratings result in higher prices. Power output ranges from 5-10 kilowatts (kW) for homes.
Battery chemistry
Lithium-ion batteries cost more than lead-acid. Different lithium-ion formulations have different price points.
Supplemental hardware
Battery inverters, control systems and installation labor add to the overall cost.
Location
System prices can vary across states or regions. California often has higher costs due to labor rates and permit fees.
According to EnergySage, the current average cost per kWh for a solar battery in the United States ranges from $700 to $1,500. So a 10 kWh lithium-ion solar battery for a home could cost $7,000 to $15,000 before incentives.
How much do government incentives reduce the cost of solar batteries?
There are federal and state incentives that can significantly reduce the upfront cost of solar energy storage:
Federal Investment Tax Credit
The federal solar tax credit offers a 26% tax credit for systems installed through 2032. This can reduce the battery cost by around 25%.
State rebates and incentives
Some states like California and Massachusetts offer rebates of up to $3,000 per battery installed. Other incentives can also apply.
Utility company rebates
Many utility companies provide additional rebates for adding energy storage to an existing solar array. These range from $200-$1,000 per kWh.
Net metering
With net metering, excess solar energy fed back into the grid results in utility bill credits. This can offset long-term costs.
In optimal scenarios, total incentives can reduce the net cost of a solar battery by 50% or more. Always check available federal, state and utility incentives.
What factors affect ongoing costs of battery storage over time?
There are recurring costs to consider over the lifetime of a solar energy storage system:
Operation and maintenance
Most solar batteries have 5-10 year warranties. After that, repairs or replacement of defective components may be needed.
Software and monitoring
Many solar batteries include software subscriptions or monitoring fees ranging from $10-$20 per month.
Performance degradation
All batteries lose storage capacity over time. The rate of degradation varies by chemistry and usage.
Replacement
Solar batteries typically last 5-15 years before needing replacement. The new cost must be factored in over the system lifetime.
Insurance and taxes
Some locales may levy taxes or permit fees on battery storage systems. Insurance rates may also increase.
Electricity rates
The long-term value relates to future utility electricity rates. Higher rates make solar + storage more cost effective.
Accounting for these recurring factors is important when evaluating total lifetime costs. Maintenance, degradation and replacement drive ongoing expenses.
How does location impact the cost of solar battery storage?
Installation and equipment costs for solar energy storage systems can vary significantly depending on location. Key factors include:
Solar incentives and rebates
State/local solar battery incentives like tax credits and rebates directly reduce upfront costs. Less generous regions see higher net costs.
Prevailing wages for labor
Regional wages and labor rates affect system installation costs. Higher wages are reflected in battery prices.
Sales taxes
Some localities levy additional sales tax on battery storage system purchases, while others exempt them. High sales tax jurisdictions have elevated pricing.
Permitting and administrative fees
The cost to obtain necessary permits and undergo inspections adds to the overall expense and varies by location.
Electricity rates
Areas with high energy prices make solar plus storage more financially attractive over the system lifetime.
Sunlight resources
Regions with greater solar resources can maximize battery capabilities and value. Less sunny areas see lower cost effectiveness.
Always evaluate location-specific factors when considering solar storage costs for a particular home or property.
What are representative cost examples for home solar battery storage?
Here are some real-world cost examples for adding battery storage to typical residential solar panel systems:
Tesla Powerwall
– 13.5 kWh capacity
– $11,700 installed cost before incentives
– With 26% ITC tax credit applied, net cost of $8,662
Sonnen Eco Compact
– 9.6 kWh capacity
– $9,950 installed cost before incentives
– After state rebate of $1,000 net cost is $8,950
LG Chem RESU10H
– 9.8 kWh capacity
– $10,000 installed cost before incentives
– Net cost of $7,400 after applying $2,600 in combined federal and state incentives
As shown above, incentives can reduce net out-of-pocket battery costs by 20-40% in many cases. Payback and ROI depend on accompanying solar panel system size, electricity costs, and other factors.
How quickly is battery storage for solar panels improving?
Solar energy storage technologies are improving rapidly, resulting in better performing and less expensive battery solutions:
Battery efficiency
Lithium-ion batteries now achieve 85-95% roundtrip efficiencies. Flow batteries can reach 65-85% efficiency. Continuing advances reduce energy loss.
Degradation
Battery storage capacity declines over time. But degradation rates are improving, with some lithium-ion formulas showing less than 10% capacity reduction after 10 years.
Power capabilities
Faster battery charging and discharging enables greater flexibility in solar applications. Discharge rates up to 6 hours are now available.
Costs
Lithium-ion battery pack prices have dropped nearly 90% in real terms since 2010. Per kWh costs are projected to fall from around $1,000 today to $100 by 2030.
Product selection
Homeowners have more product choices as more manufacturers like Tesla, LG, Sonnen enter the market.
Rapid improvements in solar storage tech are driving costs down and opening up new possibilities for residential energy independence.
Conclusion
The costs of household solar energy storage are dropping quickly but still entail a significant upfront investment. Key price factors include battery size, power rating, technologies used, and location. Total costs for a full solar plus storage system currently range from $15,000 to $40,000. However, federal and state incentives can reduce the net outlay by 20-50% in many cases. With ongoing advances in storage technology and cost reductions, return on investment for solar batteries will continue to improve dramatically in the coming years.
