The promise of a battery that powers your home is that you can sock away energy for a rainy day as easily as putting money in a savings account.
Around the world, more homeowners are experimenting with residential batteries, which grab energy when it is generated and store it for later use. The excess power can be tapped if the grid goes down—in a storm, say—or during high-demand periods when electricity is more expensive.
Thanks to a big push by solar vendors and battery providers such as
Inc., Samsung Electronics Co., and Sunverge Energy Inc., homeowners in the U.S. now have a choice of off-the-shelf home batteries, or they can get them through pilot programs hosted by local utilities and companies that install solar systems. The batteries are getting increased attention as solar power becomes more affordable and common in the U.S.
Today, however, the financial benefits for most Americans are still as meager as the interest generated on that savings account. Batteries typically cost thousands of dollars, and one may not be large enough to power an entire home. Tesla, for example, sells its Powerwall residential battery on its website for $5,500, plus $700 for hardware. Installation costs can add up to another $2,000. The 14 kilowatt-hour battery can provide one day of backup power to lights, sockets and a refrigerator in a three-bedroom home, according to Tesla’s website.
While it’s difficult to make a direct price comparison due to fuel costs and power limits, household generators are typically cheaper than their battery counterparts. A 16-kilowatt generator that can run on natural gas or liquid propane sells for less than $4,000 at
And a generator theoretically can run indefinitely as long as it is supplied with fuel.
In the U.S., traditional electricity is plentiful, cheap and usually reliable. U.S. homeowners paid an average of 12.82 cents a kilowatt-hour in February, or about $110 a month, according to the Energy Information Administration. That compares with household prices of 29.7 cents a kilowatt-hour in Germany, 24.1 cents in Italy and 19.5 cents in the U.K., according to 2016 data from the European Union.
“Across much of the U.S., residential storage doesn’t make economic sense,” says
an energy-storage analyst at GTM Research in Boston. As a result, many Americans are dabbling with batteries for “emotional rather than economic reasons,” he says.
Off the grid
Much of the nascent demand for batteries in the U.S. comes from energy-conscious homeowners who want to get off the grid and from those who live in states like Hawaii where electricity is expensive and local regulators have set restrictions on the sale of solar power back to the grid. That means homeowners who have solar power have to either consume it or store it.
“Even though you have the added expense of the battery, it is still less expensive to go this direction than stay on the grid and pay regular rates,” says
owner of Hawaii Energy Smart, which sold 14 batteries in a five-week period earlier this year. Hawaiians pay more than double the average U.S. rate for electricity.
But even homes that don’t have solar systems can store power from the local utility in a battery and use it instead of a generator during blackouts.
doesn’t have solar panels yet on his three-bedroom home in Richmond, Vt., but he has a Tesla Powerwall battery in his garage that kicked on four or five times this winter when the power went out. He got the unit as part of a program offered by Green Mountain Power, his local utility.
“I don’t know if the Powerwall is saving us money, but it’s a great load off our minds to know that if the power goes out, we are fine,” says the 49-year-old computer programmer who plans to install solar in his home this summer. He pays $40 a month for the battery and receives a $30 monthly credit for allowing the utility to store excess power for use in the neighborhood during periods of high demand.
More than one million U.S. homes have solar power systems, and the country now has enough solar installed to power 8.3 million homes, a study released in March by GTM Research and the Solar Energy Industries Association showed. Last year alone, U.S. homeowners installed 2,583 megawatts of solar power.
IHS Markit estimates that U.S. homeowners installed 30 megawatts of battery storage capacity in 2016. It expects demand to rise to 78 megawatts by 2020 and grow significantly after that.
In coming years, battery prices are expected to drop swiftly, as Americans and utilities explore renewable fuels. Also, a recent sharp price drop in the cost of solar installations is expected to make batteries more cost-effective for homeowners who are overhauling their energy sources.
“Over the next two or three years, you will see a continued decline in the cost of batteries and solar installations, therefore improving the economics,” says
co-founder and chief executive officer of Sunverge, which is based in San Francisco and Brisbane, Australia. Batteries have become increasingly popular in Australia, where high electricity prices make them more cost-effective.
For homeowners, there are many variables in determining if a home battery makes sense, such as local electricity prices and the number of power outages in the area. If a local utility is subsidizing the cost of solar and/or a battery through a pilot program, it could make more economic sense—as long as the homeowner knows if those costs will change when the pilot comes to an end.
Finally, if a homeowner has or plans to install solar panels, one of the key determining factors is whether the local utility allows the sale of solar-generated power back to the grid. If not, the battery may be a good option.
Ms. Sidel is a writer in Jersey City, N.J. She can be reached at [email protected]
Appeared in the May 22, 2017, print edition as ‘Home Batteries Aren’t Broadly Economical—Yet.’