So you have a solar system and you’ve heard how great it will be if you add a battery to it. Perhaps the sales company told you your system was battery ready but the prices on batteries aren’t quite there yet. Are we nearly there yet? Let us show you the financials of a battery and you can better decide if they will work for you.
There are different types of hybrid battery systems out there. Some will provide emergency backup when the grid fails and some provide other tangible economic functions but most are there simply to help you use the energy you generate rather than exporting it to the grid. We will focus purely on the latter.
But first, can you even add a battery to a system you bought years ago? It’s not battery ready is it?
Actually, batteries can be added to nearly any solar PV system. They are simply added in parallel with a measuring device put in your switchboard. In most cases, you can add a battery.
We could go on and on about sizing the battery appropriately and how to do that. We will just focus on the economics and leave that for another post.
It is probably easiest to start with the perfect scenario where the battery completes a full charge and discharge cycle in one day. We’ll use a perfect 10kWh battery for our example.
If your solar system has the capacity to completely charge this battery and you use all the energy stored then you avoid paying 10kWh of electricity per day. People pay different rates of electricity so lets assume that it’s 25c/kWh. It looks like the savings are simple:
10kWh / day x 25c/kWh = $2.50 / day
Fortunately however, you were likely to have been paid something for that energy had it just been sent to grid. This varies a bit so we will work on 10c/kWh. Simply sending the solar energy to the grid instead you save:
10kWh / day x 10c/kWh = $1.00 / day
This means, the saving due to the battery is only:
$2.50 – $1.00 = $1.50 / day
This ideal battery will save no more than $550 a year to someone who has a solar system with the capacity to use it effectively. You must remember that this is with an ideal battery being utilised to capacity every single day.
Unfortunately there are days like this, when even a 10kW system only exports 7kWh so wouldn’t get through a complete cycle. The only way to make sure you can charge it every day is to undersize it, in which case you probably wouldn’t notice the savings at all.
Furthermore, even if you produce the extra 10kWh, your charging device might be limited to how much it can handle at one time. For example, if you are producing 6kW but can only charge at 2.5kW, you’ll export 3.5kW. You will lose storage potential if the charging is restrictive.
You will be lucky to get 90% utilisation from the battery if it is well sized to your solar PV system. A battery that is too big could easily be down to 30% utilisation. That brings the savings down to less than $500 a year.
Batteries also have inefficiencies. A lithium battery will typically only return 90-95% of the energy put in to it. That 10kWh battery is really only giving 9kWh (or needs 11kWh to charge 100%). Yearly savings are now only $450 a year.
Batteries also degrade. A Lithium battery with a 10 year warranty, might only be producing 60% – 80% of it’s rated capacity by that time. We’ll be generous and assume nearly 90% of total energy throughput of the 10kWh/day advertised. Yearly savings are now only averaging maybe $400 a year.
A good quality 10kWh battery can cost more than $10,000 when fully installed with the required electronics. Over it’s 10 year warranted life, it will save you perhaps $4,000. Probably doesn’t sound that attractive does it?
You could shop around for a cheap battery but if you’re not careful, you might get lower capacity, lower charging rates, lower quality (degrades faster or fails) or lesser warranty. They’ll see you coming and sell you on the good feelings you’ll have when you join the battery owners club.
In conclusion? It’s expensive, but you can add a battery to your existing solar system. There are plenty of other reasons to get a battery, just don’t expect it to make economic sense until battery prices drop significantly.