Creating Energy Independence With Solar Panels & Storage Battery Systems In The Home

When designing a house, one of the most important issues is energy efficiency. That means there needs to be the right amount of insulation in the foundation, walls and roof, energy efficient windows, and well placed on the periphery of the house. The house also should be placed on the property for optimal solar orientation. With these factors covered, the house will require minimal energy for heating and cooling.  

A perfect solution for efficiently providing the energy for electricity is to install photovoltaic (PV) solar panels on the roof or next to the house. The house can get energy from the grid when there is no sun or inclement weather and feed energy back to the grid where this is allowed. 

Some houses are totally off the grid because connecting to the grid would be too expensive or unavailable in that area. These houses require photo voltaic (PV) panels to provide energy and batteries to store the energy for periods when there is no solar energy and/or inclement weather. When a household stores solar energy produced on site and uses that energy when solar production is less than than the energy requirements in the house – it is called “self consumption.”

The house may also be connected to the grid and return excess energy to the grid when the battery is full or during peak periods of the day when the grid is overloaded.

I interviewed Lior Handelsman, VP of Marketing & Product Strategy and Founder of SolarEdge, a global leader in smart energy technology to get very up-to-date information on solar energy. The interview with Handelsman follows:

1. How have the batteries improved in the last several years?

The past decade has seen impressive improvements in battery technology, in areas such as performance, lifespan, charging and discharging rates, efficiencies, energy densities, and more. This all means that batteries provide consumers with more value. There are a number of drivers influencing technology improvements, such as the large demand from the mobile market this past decade and the expected demand from the electric vehicles (EV) and solar market in the coming one. We will likely see increasingly specialized batteries for the different markets, such as faster discharge rates for the automotive market so that EVs can accelerate more quickly.

2. Have they come down in price? Is that due to new technology.

Over the past decade, Lithium-Ion batteries prices have globally declined nearly 90% in manufacturing prices according to Bloomberg NEF. This is in all sectors, not just in photo voltaic (PV) or residential PV panels. The same report by Bloomberg NEF forecasts another 50% drop in Lithium-Ion battery prices by 2023. This decline is due to a variety of reasons, such as improved technology, advancements in manufacturing, and economies of scale. For instance, the burgeoning EV market is one of the sectors driving the growth of batteries. Fortunately, the solar energy storage market is benefitting from this, making it more cost-effective for consumers and businesses to generate and store their own solar energy.

3. Can you give me a simple explanation for how inverters works?

At their most basic level, solar inverters are responsible for converting solar energy into energy that can be used in the home and the grid. However, inverters are becoming much more than that; they are turning into smart energy managers. They still manage solar energy, but they can now also manage energy storage in a battery, how energy is consumed in the home, EV charging, and can also support grid stabilization. They are becoming both the brain for smart energy management in the home and the point of contact to manage a smart grid.

4. Is there a simple explanation for a virtual power plant?

The energy grid is beginning to transition from one based on centralized, polluting power stations to an interconnected, distributed network of solar energy and battery systems. A virtual power plant can manage, in real time, all of these distributed sites, in a neighborhood, as one large, virtual power station. So how does this work in reality? When a network operator sees that there will be an energy demand peak at a certain time and day, the virtual power plants (VPP) can be used to send a signal to all the inverters to start storing energy in the distributed network of batteries. Then when the demand peak is reached, these inverters discharge the energy from the batteries into the grid in order to supply enough energy.

5. What are the factors that determine how large the system should be? What are the subsidies offered in the United States?

The main factors in designing a solar-plus-storage energy system are energy needs, roof size, and subsidies. The energy patterns are important for understanding how large of a solar energy system is needed to offset or minimize energy bills. The roof size will determine how much power can be put on the roof and how much energy can be produced. And the type of subsidies can also impact system size and the type of system. For instance, there are some subsidies that limit how much solar energy can be fed into the grid, so this will impact system size. In a market that focuses on feeding as much energy into the grid as possible at a high price point, then the solar energy system size can be maximized. But there are markets that don’t allow any solar energy feed-in to the grid. It is these types of markets that batteries are the most useful, since batteries allow consumers to produce solar energy during the day, and then store that energy for use in the evening and mornings. The size and amount of batteries are determined based on household energy patterns. There is an investment tax credit (ITC) of 26% for solar and storage installations throughout the US. However, this is only applicable to batteries if, and only if, the battery is charged exclusively from solar. Additional incentives for solar energy varies widely based on the state. However, in general, the US market offers a solar subsidy called net metering. This is when the cost of the electric energy consumed from the grid is offset by the electric energy generated by the renewable source. There are some larger and more advanced solar markets that offer time of use. This is when the price of electricity varies based on the time of day and week it is used or produced. An example of this would be California. While Hawaii has the highest penetration of solar energy, it now has zero export, in which solar energy systems with storage are not at all allowed to export energy to the grid at any time. Some other types of battery-specific subsidies include California Public Utility Commission’s Self-Generation Incentive Program (SGIP) that offers a direct subsidy from the State for batteries. There are of course some specific requirements to quality for this program. Another example is the Solar Massachusetts Renewable Target (SMART) Program. This program offers a generous incentive for batteries as part of its overall solar program. Incentives to install batteries are also being provided by utility companies, such as National Grid’s Connected Solutions program in Massachusetts and Rhode Island, in which participants receive financial incentives for battery access.

6. Do you have any idea what percentage of homes today have PV panels? Batteries? – compared to 5 or 10 years ago?

According to PEW research, only 6% of homeowners already have solar panels on their homes. So, while the residential PV market in North America is at its early stages, it is quickly growing. Wood Mackenzie data put the PV residential market in 2013 at only 799 megawatts (MW), but by the end of 2018 it was already reaching 2,422 MW, showing more than 200% growth. The solar battery market seems to be following the same path of the PV market, but is in its early stages. According to Wood Mackenzie, in 2015 there was less than 10 MW of solar storage deployed in the US residential market, and by mid-2019, this ballooned to nearly 70 MW. In fact, the increased demand in the second quarter of 2019, which was 35 MW of new residential storage, represented a new benchmark in terms of quantity and was nearly a 33% increase over the previous record. Also predicted by Wood Mackenzie is that 20% of residential solar installed in 2020 will be paired with storage. A main driver of the demand for solar-plus-storage installations is the power “shutoffs” (Power shutoffs are power outages, but unlike all power outages, power shutoffs are intentional. Some power outages can be unintentional, i.e. caused from a storm. that have occurred during the past few months in California.)

7. What is driving the sale of PV/ battery sales?

There are two major trends driving the sale of solar energy and battery systems: Grid parity and grid independence. Grid parity means that the cost of producing solar energy is lower than the cost of buying energy from the grid. There are many states in the U.S. that have already reached grid parity. So, financially, it makes sense for people to generate and consume their own solar energy. Grid independence is when consumers want to use the energy that they themselves produced. This can happen in areas where the grid is unstable and suffers from frequent black outs.

I hope this clarifies a good many terms and info on solar energy and batteries. I believe this is the future for homes around the world because of the consequences we are seeing from global warming. For additional information on PV and backup systems check the website of the Office of Energy Efficiency & Renewable Energy.

This post first appeared on Forbes.com. To see the original, click here.