ENERGY STORAGE AND DISCOUNTED NET METERING…
The combination of a solar array, home energy storage, and a utility grid connection is referred to as a hybrid grid tied system. There are two primary reasons to consider adding energy storage to your solar array; self consumption and as a backup power supply.
The desire for backup power when the grid goes down is fairly self explanatory and many assume that a solar PV system will provide this security. This is not true, a solar system without energy storage must sense grid power to function, and if the grid goes down the solar array must also instantly shut down. This is the law and it is done to protect the utility company linesmen working to repair the power lines. The faulty assumption that simple solar arrays would continue to produce power when the grid is down was brought painfully to the forefront by Hurricane Sandy. Before that storm most solar arrays in the affected area did not have storage incorporated into their design and during the weeks of power outages that followed that monster storm, those arrays were shut down and virtually useless. Adding energy storage and a hybrid inverter to a solar array will allow it to continue to produce power for your home or business even when the grid is down !
Even though having emergency back up power could potentially be a huge benefit for the owner of a hybrid solar system, it is not the only reason to consider adding solar energy storage capacity. The primary financial reasoning for adding energy storage capability to a solar system lies in the ability to be able to retain the excess power generated by a solar array during the day to be used in your home during the evening hours.This is termed “Self Consumption”. To see energy storage and self consumption very well explained in a short video go here
As of September 2017 all of the New Hampshire utilities are permitted by the PUC to discount the amount they credit for the excess power from a privately held solar array that is exported back into the grid. In most cases the discount applied is in the order of 20-25% (varies by utility). There are two ways to accommodate the net metering discount penalty; oversize the solar arrayenough to account for the discounted crediting,or store the excess solar power generated during the day in a battery and self consume itin during the evening. Over sizing the array can be a cost effective way to reach a 100 % annual offset, but adding energy storage has multiple other additional advantages, both for the consumer and the health of the grid. Consider as the example of a recent NH Solar 8.4 kW residential installation using a StorEdge inverter and an LG RESU10H battery. A graph representing a week of this arrays output can be found here.
The homeowners primary motivation was initially to have sustainable backup power after a storm because their home is somewhat remote and their power is sometimes out for days. When the grid goes down the StorEdge inverter will sense this and automatically switch over to powering only their 30 amp essential loads panel. They will be able to feel secure and comfortable with their water, heat, refrigeration, some lighting and a live modem being powered by the array during the day and the stored solar energy from the battery at night. The real payback though is in the daily operation that enables them maximize the power produced by their solar array through self consumption. When the grid is live both the battery and the solar array have the ability to supply power to the entire house (as opposed to just the essential loads). By sometime between 9 and 10 in the morning the array is usually producing more power than the home is consuming and the StorEdge begins to use the excess energy to charge the battery. Only when the battery is full will the inverter begin to export power to the grid. When the house begins to consume more power than the solar array alone can provide that power will first be drawn from the battery and only when that is depleted will it begin to again buy power from the grid. Note that the power stored in the battery is always used at full value, but power exported into the grid through discounted net metering is only credited at 75% …and then bought back from the utility at 100%. The power stored and drawn from the battery avoids 25% net metering penalty entirely.
A second benefit is in the overall health and balance of the grid system. During a hot August day a home equipped with a solar array should be able to run the AC system without problem …until the late day when the sun begins to wane. The problem is that a solar equipped home without storage will begin to draw power from the grid right at a time when the grid is usually at it’s maximum capacity further stressing the grid system. A solar powered home with storage however will begin drawing from the stored energy at that time and not contribute to the over taxing of the grid capacity.
A second method for profitably utilizing home energy storage is termed “Time Of Use optimization” and functions well when a utility company offers differing time of use rates. By installing a properly programmed home storage battery the consumer would be able to purchase their power during the off peak hours, store them in the battery, and consume them during the higher rate peak hours. Can it be justified financially? That depends both upon the consumer’s total consumption and usage patterns, if you can’t avoid consuming a lot of power during the daytime peak hours, then the addition of energy storage, even sans solar array, may make sense.
Higher consumption commercial and industrial users can use storage very effectively through a third technique called “Peak Shaving”. Some of the utilities set a business’s rates according to the peak momentary usage incurred by the business within a given month. Often this peak usage is only needed for a short duration. By using a battery to reduce (“shave”) the high peak, the entire months utility rate can be reduced. The savings generated through peak shaving can be considerable!
So what is the bottom line? What does adding energy storage cost?
Adding energy storage capability requires the addition of a battery(ies) and charge controller, an auxiliary essential loads sub-panel, and a more sophisticated hybrid inverter, Depending upon the level of instantaneous power and long term storage capacity desired the additional cost is generally between 12 to $15,000 for a residential home or small business.
Previously under the Cost and Incentives tab we had priced a typical 24 module 7.2 kW roof mounted solar system at an upfront gross cost of $16,560. The gross cost of an equivalent hybrid installation with a 9.8 kWh LG battery would rise to approximately $31,000, and the net cost after incentives would be $21,700. The payback if you use the battery in the maximize self consumption mode may take 8-9 years and this may be difficult to justify if you look only at the ROI. But in every case you must also consider that you have also gained the security of knowing that you have instantly available backup power for your essential loads, and that a hybrid solar/storage system will grant you benefits 365 days a year, whereas buying a premium quality whole house generator will only benefit you during those few days of a power outage …if it starts ..and as long as you don’t run out of fuel.
The 7.2 kilowatt array in the typical home example was expected to generate 9,600 kWh annually. Without storage only 22% would be consumed directly and the rest would be sent back into the grid during the day at the discounted credit rate and bought back in the evening hours at the full utility rate. The annual cost of the 25% net metering discount would be $336.96 (78% exported and bought back x 9,600 kWh x 25% net metering discount x 18 cent rate).
By adding a battery the amount of power coming from the solar array and being self consumed jumps to 62% and the net metering cost drops to $164.16, an annual savings of $172.80. The system owner has now gained both a very real financial savings and the security of clean silent power after a storm.