On-Site Storage, the Great Equalizer

We are now in a world where decentralized electricity production, such as rooftop solar, is more viable than ever for the public and more threatening than ever to utilities. The public is more willing to adopt in-home renewables thanks to reliable technology, solid performance, declining costs, and the growing availability of loans. Utilities are threatened by uncertainty about how to integrate thousands of new decentralized energy sources into the existing network. And ratepayers without rooftop solar are fearful that their rates will rise. On-site energy storage is one new technology that promises to address all sides of this dilemma.

The Need for On-site Storage Technology

As companies such as Tesla/SolarCity and Mercedes produce more affordable batteries for electric vehicles, energy storage technology is spilling into the housing sector. Grid connection is essential for zero energy buildings which need to bank excess production from sunny times to use at night and on cloudy days. The disconnect between when energy is produced by solar panels and when it is needed to meet peak demand remains a problem. On-site battery storage offers a solution.

While utility-scale, grid-based storage is coming online in California and Hawaii, battery products can now be installed behind home electric meters and intelligently integrated with the grid. Tesla’s new Powerwall 2 includes a built-in inverter that converts the direct current from panels into alternating current for household use and exports power to the grid when energy is most in demand. Thinking big, every one of California’s  “million solar roofs” could easily contribute to the overall energy mix making the energy grid more efficient.

On-site storage allows solar owners to store excess energy for later use, even during a power outage. Residential scale batteries hold between 5 and 20 kWh of electricity. This is in the same range as the 15 to 20 kWh used per day by a typical newly-constructed American home. Batteries currently available will help a typical zero energy home even out the peaks and valleys of daily energy fluctuation.

The Challenge of Net Energy Metering

Most utilities have reluctantly agreed to “net energy metering” arrangements when negotiating rate cases with state regulators. Net metering means that utilities accept energy from decentralized sources, although contract terms vary widely around the U.S. The phenomenal growth of these systems shows huge promise for addressing climate change, pollution and national energy security. When there were few decentralized producers, mostly rooftop photovoltaic arrays, there wasn’t much problem for the grid. Unfortunately, electric utilities are largely dealing with an electricity grid that doesn’t look much different from the days when George Westinghouse and Nicola Tesla installed the first large-scale powerhouse at Niagara Falls. The grid is in desperate need of a 21st Century upgrade in order to better meet peak demand and integrate decentralized energy production.

Benefits for Owners and Utilities

Utilities benefit from on-site storage in two ways. First, they don’t have to supply power to the home during peak hours. Second, with smart integration and a fair net-metering agreement, utilities could pull stored energy into the grid to meet a short-term need. Later, when demand subsides, batteries could be recharged with grid power or the customer could be paid a fair price for the amount of energy he or she supplied.

On-site storage is good for solar panel owners, because it allows power shifting from daytime production peaks to evening consumption peaks. Few zero energy homes use as much energy at midday as they produce. But when evening arrives, families begin to use lights, appliances, and energy-sucking devices like game consoles. On-site storage allows them to use banked energy to offset evening use when demand and utility production costs are higher.

Whether specific customers benefit from on-site storage depends on how they are credited for power returned to the utility under their net metering agreements. One factor is the timing of credit expiration. Some agreements generously set an annual expiration, usually each Spring. This allows credits to accumulate over the sunny months to be used during the cloudy winter months. These customers don’t have much to gain from on-site storage other than as an emergency back-up, because they gain full value for the excess energy they return to the grid. In other agreements, credits may expire each month. During sunny months that could mean leaving hundreds of kWhs on the table. For these customers, batteries allow the excess energy from each day to be used that same night. This reduces the amount that would be lost each month, and saves the customer money.

Under some net metering contracts there is a difference in the customes’ buy price and their sell price. These customers receive a lower price when selling excess power than it costs them to buy power from their utility. The sell rate is often based on the utility’s wholesale power costs, which can be anywhere from 20% to 50% of the retail price. Solar owners may generate excess power during the day and sell it at the wholesale rate, but buy power later the same day at the full retail price. Batteries store excess power on-site, so customers use it themselves. This replaces power that they would have purchased from the utility at the higher retail price. In essence, on-site storage allows owners under these types of net metering contracts to capture the full retail value of the energy they produce.

Time of Use Pricing

There is a third possible scenario that would benefit a solar/storage setup most of all and it involves time-of-use pricing. Although uncommon, this rate structure changes prices to reflect the actual cost of utility power. The most expensive energy coincides with the highest demand for electricity, which usually occurs in late afternoon or early evening. Retail customers would save money if they used batteries to carry them through the high-priced peak. This would be true even if the batteries were charged with grid power rather than solar.

A Win-Win-Win Solution

The grid will still be needed to address the bigger seasonal fluctuations from sunny seasons to cloudy ones. However, on-site storage can be valuable to consumers and utilities as it balances daily supply and demand variations. In the future, successful grid integration will require each zero energy building to capture excess production on site for later use and make that stored energy available to the grid as needed. Properly done, it will make the grid more efficient and keep energy prices lower for everyone. On-site energy storage will be a benefit for homeowners with solar collectors, for electric utilities, and for ratepayers without solar. It’s the kind of win-win-win solution the world needs to make the shift to mainstream zero energy living.

Solar Prices Keep Dropping

Prices for installed solar electric systems dropped again in 2015. Residential systems are 5% cheaper and commercial systems are 8% cheaper than the previous year. Tracking the Sun, an annual report published by Lawrence Berkeley National Laboratory, follows upfront cost before incentives. Prices for residential scale installations in the U.S. have dropped consistently from $12/Watt in 1998 to about $4/Watt in 2015 with some leveling off in the last few years. From 2008 to 2012, the main driver was a steep decline in photovoltaic (PV) module prices. Since 2012, module prices have remained relatively flat, while other components (inverters, mounting) and soft costs (labor, administration, marketing) have dropped faster. As system prices have declined, governments and utilities have deliberately reduced incentives, which now stand at less than $1/Watt in most areas.

Of particular interest is the relationship of price in the U.S. compared to other countries. While hardware costs are similar across countries, the authors assign the higher costs in the U.S. and Japan to soft costs, which might include business models, interconnection standards, labor rates, and incentive levels, among others.


Not surprisingly, larger systems cost less per Watt. A typical 4,000 Watt system comes in around $4.50/Watt, while a 20,000 Watt system drops to $3.60/Watt. The report notes significant differences between states with Minnesota and New Mexico at the high end. Nevada and Texas cost the least. Most states are below the median price, but large numbers of installations in higher-cost states, such as California, New York and Massachusetts, push the national median higher.

While high-volume installers showed lower prices in Arizona, that wasn’t the case in other states where there was no apparent relationship between sales volume and price. Of particular interest to zero energy builders, installation prices were substantially lower in new construction than in retrofits. This may be due in part to the economy of scale in housing developments. Tax-exempt customers, such as schools, government, nonprofit and religious organizations, paid more than residential buyers, although the price has declined for all customers over the years.

The steady decline in the price of PVs, has supported the growth of zero energy buildings. Although module prices have probably reached their low, other hardware components still have room to drop. More importantly, soft costs still offer substantial opportunities. Incentives are likely to target these areas in the near future. Continued growth and evolution in the solar industry is good news for the zero energy movement.

Induction Cooks Better than Gas

Induction cooktops have been dropping rapidly in price. I recently acquired two, single burner induction units plus a set of stainless steel cookware for $100. At those prices, you might want to consider retiring the old electric or gas range. There is no doubt that induction uses less energy than an electric resistance burner, but comparing it to a gas burner is more complicated. Thanks to Paul Scheckel, author of Home Energy Diet, we now know that induction cooking is 74% efficient while gas is only 32% efficient. Other sources show the efficiency of induction even higher, making 74% a conservative figure. Induction also heats faster. In Paul’s test, water boiled in 5.8 seconds using induction, while it took 8.3 seconds to boil the same amount of water with gas.

If you live in a zero energy house and power your electric cooktop and oven with solar it is, in Scheckel’s words, “fossil-free cooking.” If you’re living in a conventional home and want to chip away at your carbon footprint, you’ll want to consider the carbon emissions of your fuel choices. Burning natural gas directly to get 1 million btus releases 117 pounds of CO2. Burning coal directly for the same amount of energy would release just over 210 pounds. There aren’t too many people burning coal in the cookstove these days, so it makes the most sense to compare the total system efficiency of electricity with that of gas.

In Scheckel’s experiment the electric induction cooker released 0.29 pounds of CO2 to heat the water, while burning natural gas released 1.16 pounds. (CO2 emissions from propane are even higher than natural gas). So, even taking into account the gross inefficiency of coal-fired electricity, induction cooking dramatically reduces carbon when compared to gas (or to less efficient standard electric cooktops).

In addition to reducing energy use and increasing cooking speed, induction cooking has several more advantages. The electronics allow a wide range of programming. You can start, stop or change temperatures at pre-programmed times. You can precisely set the temperature by degrees. The durable glass top doesn’t get hot, so fingers don’t burn and neither does spilled food, making cleanup easy.

Induction cooking works by creating an electromagnetic field (EMF) that excites the molecules in cookware. So, you need pots and pans made with ferrous metal, i.e., stainless steel or cast iron. If you don’t have those, then you may need to buy new cookware. Those issues aside, induction cooking is safe, efficient, and a perfect addition to a zero energy lifestyle.