by Energy storage is poised to transform the residential energy landscape. Battery technologies that can store energy produced by rooftop solar panels or that help homes operate independently of the electric grid are gaining popularity among homeowners. In this article, we examine the growing residential battery market and explore the benefits these systems provide.
The Residential Battery Market is Growing Rapidly
According to industry estimates, over 500,000 residential battery systems were sold globally in 2021 representing nearly 50% growth over the previous year. Battery manufacturers like Tesla, LG Chem and Panasonic now offer entire home battery solutions tailored for the residential solar market.
Major drivers of residential battery adoption include the ability to use solar power when the sun isn’t shining, provide backup power during outages, and lower electric bills by optimizing self-consumption of rooftop solar. As these values propositions become clearer to homeowners and utilities embrace new rate structures, annual shipments of residential batteries are projected to continue rising rapidly over the next decade.
Benefits of Residential Battery Storage
Energy Independence and Backup Power
During Outages
Perhaps the greatest allure of residential battery storage is the promise of energy independence and resilience. Paired with solar panels, a battery system allows a home to operate completely off-grid using only the energy it produces or stores. This is highly valuable as batteries provide backup power when utilities experience outages. Major weather events like hurricanes or wildfires that knock out power grids have been a major driver of residential battery sales in recent years as homeowners seek backup energy security.
Lower Electric Bills Through Self-Consumption
For solar owners, a battery strengthens the ability to self-consume the power generated by their solar panels during peak daylight hours. Without storage, excess solar is typically exported to the grid for little or no compensation via net metering. By charging the battery from midday solar and discharging this stored energy in the late afternoon/evening, a greater proportion of power can be directly used onsite rather than exported. This enhances the bill savings potential of a solar investment. Battery systems have been shown to increase the amount of solar self-consumed by homes to over 90% compared to around 50% for solar only setups.
Time-of-Use Rate Optimization
Some electricity providers are transitioning from simple net metering policies to more complex time-of-use (TOU) pricing structures. Under TOU rates, the price of power varies depending on demand – usually being most expensive during late afternoons and early evenings on weekdays. Battery systems can be automatically controlled to discharge stored solar power during these costly TOU periods, thus offsetting power drawn from the grid when it’s at its peak price. This optimization of battery use helps lower bills for solar customers on TOU rates.
Enhanced Energy Management with Home Integration
Beyond enabling energy independence, residential batteries are increasingly doubling as smart energy management devices. Many new Residential Batteries solutions feature advanced control technologies and integration capabilities that empower homeowners leverage their storage investment.
Home Energy Management
Top battery manufacturers are releasing sophisticated control apps and energy monitoring dashboards. Homeowners can remotely view battery status, remaining charge levels and power flows into/out of the storage system. With many units, users can define daily energy usage and self-consumption targets for optimal operation. These management features bring greater visibility and control over home energy usage.
Integration with Home Automation
Leading batteries are also compatible with smart home protocols like Zigbee, Z-Wave and Wi-Fi for seamless integration into home automation ecosystems. Through control hubs, batteries can power smart devices and appliances or automate them to draw power during optimal charge/discharge windows. Voice assistants Alexa and Google bring intuitive voice control of energy storage into the mix as well. This two-way communication between batteries and smart systems paves the way for new home energy services on the horizon.
Growing Adoption Despite Higher Upfront Costs
While the benefits of residential battery storage are numerous, higher upfront equipment and installation costs have posed an adoption barrier compared to solar-only systems. A typical home battery ranges between $10,000-$15,000 installed depending on unit size and manufacturer. Generous rebate programs and new financing options have helped curb these expenses.
Government and Utility Incentives
Many state and local governments now provide cash rebates or tax credits for battery retrofits ranging from $2,000-$5,000 per home. Utilities confronting capacity issues sometimes sponsor residential battery rebate campaigns as well. With these utility and public sector incentives layered on top of federal tax credits, the effective upfront cost of batteries is reduced by 20-40%.
Innovative Financing Options
Equipment financing programs are also gaining acceptance. Through Property Assessed Clean Energy (PACE) financing, battery system costs can be recouped through property tax assessments over 5-20 years. Solar financing providers now offer battery add-on loans at attractive rates. Even equipment leasing and battery-as-a-service subscription models have emerged where homeowners pay a monthly fee for access to storage capacity rather than facing a large upfront bill. Financing mitigates the initial high battery costs and makes residential storage an affordable new energy solution.
As the benefits of residential battery storage become clearer and the technology matures, adoption rates should continue growing strongly this decade. Coupled with solar panels, batteries provide homeowners energy independence and utilities a distributed flexible load resource. Meanwhile innovative applications and control features are laying the groundwork for an integrated smart energy future. With each installation supported by new incentives, financing models are lowering the barriers to entry. As scale increases, battery costs will fall further cementing energy storage as commonplace in homes across regions.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
