How home batteries revolutionized the solar world in 2015… and what comes next

by Andrew Meyer
January 8, 2016
Home Battery

The past year year was a big one for solar.

In fact, 2015 delivered a record amount of new solar energy capacity in the United States. At the same time, a record number of coal-fired power plants were shut down, signifying a major, monumental shift in the U.S. from fossil fuels to renewable energy. The message is clear: people are ready for a new way to generate energy, and new ways to store it.

Enter… the home battery.

People all around the United States installed rooftop solar, started generating their own energy, and demanded to break free from the grid and keep and use their own generated electricity. The energy storage industry showed up in a big way, with companies like Tesla, Sonnenbatterie, SunEdison, and Panasonic pushing home battery technology into the market, with a number of smaller startups at their heels. The home battery has completely changed the way people think about solar electricity, and the future of home solar energy storage looks bright.

Out with the Coal, In with the Renewables

Throughout 2015, the coal industry was battered with bad news. The first hit came from the United States’ Clean Power Plan, giving a huge boost to natural gas and renewables, and leaving coal in the dust. Over in the UK, climate talks inspired plans to shut down all coal-fired power plants by 2025. The world’s top coal user, China, is also on board with giving coal the cold shoulder, and rolled out a “green dispatch” system that would motivate a growing focus on renewables. With more and more information breaking around coal’s poor treatment of the environment, along with rising concerns about climate change, the record-high number of coal plant closings is expected to continue, with renewables lined up to fill in the gaps.

Though coal seems to be on its way out, many non-solar utility customers are using home batteries to avoid the rising costs of grid-connected electricity. Utility companies around the country are beginning to hit customers with additional fees, rising rates, and peak demand charges that impose a higher price tag on electricity used during the hours that people need power the most, like the early evening. Customers can avoid these fees by hooking up a home battery to the grid, and storing energy earlier in the day, when it’s cheap. Then, when grid electricity hits peak demand, households can power their house with electricity from their home battery. Using this technique, which is referred to as “time-of-use shifting,” households can keep their lights on, and their bills low, all thanks to home battery energy storage.

Grid connected home battery users have seen great advantages this year, but when we talk about the growth of solar energy storage, things get really exciting.

Solar, All Grown Up

Through all of the coal industry’s struggles, renewables were riding high. Solar in particular took its place in the spotlight, chalking up record installation numbers hovering somewhere around a 7.4 gigawatt capacity. Three waves of solar installations hit the country, with the number of individual rooftop solar panel installations rivaling the number of utility-scale projects. Many businesses have also jumped on board, setting up solar panels of their own to take hold of some resilient, reliable energy. An additional wave of installations is now in the works, focusing on offering shares of solar installations to renters and condo community members. “Community solar,” the name given to shared solar projects, is growing rapidly, opening up the possibility of solar power access to those who previously didn’t have any property available to install their own solar panels.

2015 made “solar energy for all” an unprecedented reality. But to truly take advantage of the possibilities of solar for backup power and blackout protection, energy storage, particularly in the form of home batteries, needs to follow. Solar panels generate reliable, free energy during the day when the sun is shining, but many solar panel users, especially individual households, need electricity the most after the sun goes down. Home batteries store solar energy during the day so you don’t need to panic when the skies turn dark. Home battery customers can keep the lights on all night, not to mention keep their heat and refrigeration going during power grid outages. Blackout protection can be especially important for the most vulnerable populations, like the elderly, and those dependent on electrical medical equipment. Home batteries provide seamless energy resilience, so severe weather or the unreliable electrical grid no longer pose a threat. Convenience, independence, and peace of mind; home batteries are ushering solar users into a promising new year.

Energy Storage takes Center Stage

For so long, people mourned the inability to store electricity effectively, forcing the generation and use of electricity from the grid to perform a complicated balancing act. Lack of energy storage rendered solar panels useful, but unable to truly provide the comprehensive, 24-hour power many households and businesses needed.

Not anymore. 2015 was a “breakout” year for energy storage, changing the way people thought about solar energy. Energy storage, like home batteries, makes the widespread use of solar a viable, appealing option, and many households are taking full advantage of this technology and breaking free from the tenuously balanced power grid. 2015 tripled the number of energy storage deployments than the previous year, bringing the storage industry into the spotlight, and encouraging more companies to invest in energy storage technology.

Many utility companies have seen the huge benefit of adding battery storage within the grid, making additional electricity available during hours of high demand, eliminating the need for natural gas “peaker plants,” which were previously doing the job. Utility-scale storage just makes sense… and so does energy storage on a residential, personal level.

Home batteries mean that the electricity produced from solar panels doesn’t have to be used immediately. It sounds like a simple enough concept, but the implications of this are truly revolutionary. Until solar home batteries came on the scene, solar users were at the mercy of the rise and fall of the sun, and when the sun went down, they were at the mercy of the power grid. Now, solar customers can take their power into their own hands, storing the electricity generated by their solar panels so it’s available when they need it, even in the dark of the night. This solves the problem of renewable energy’s intermittency, a major criticism renewables have received in the past. From the predictable rotation of the Earth to the unpredictable range of weather, solar has been historically limited. Not anymore, thanks to home battery storage.

What’s Next?

The Paris summit set the scene for the globe’s energy future, as almost 200 nations agreed to steadily cut emissions, and slow down global warming. This means that countries worldwide are going to have to drastically change the way they generate energy, and the decline of coal will keep on keeping on. Lower-emitting energy forms, namely wind and solar, are going to get a lot of attention in the next decade and beyond, and the United States has already extended incentives, like the solar Investment Tax Credit (ITC), to motivate a country-wide switch to renewables. It’s no longer a question of whether or not we’re going to see continued growth in the solar sector, but just how quickly things will accelerate.

The solar ITC, a federal tax credit that pays back 30 percent of the installation of solar systems for residential customers (think rooftop solar panels) as well as commercial and utility-scale projects, is great for individuals looking to install solar panels. But this policy extension is also fantastic news for the energy storage industry as well. The ITC is valued at around $25 billion spread over the five years, and is likely to motivate $38 billion in additional investment in solar companies from outside sources. This investment is what will continue the momentum in dropping costs, and enable new and more efficient technology to rise. The effect of more accessible energy storage for all, as well as awesome new technology, will have an effect that will last far beyond the expiration of the tax credit program.

The bill has already caused a huge investment in solar companies like SolarCity, SunEdison, and SunPower, with stocks soaring up to 34 percent this week. With the industry about to boom, everyone wants a piece of the bright future forecasted for the solar industry. And as investors give more and more capital to solar companies, they are ramping up their investments in energy storage and home battery technology as well. Solar and storage go hand in hand. So when the solar industry gets a major boost, like one from the ITC extension, home batteries soar right along with it. We can plan on 2016 hosting the continuation of the solar and energy storage boom. We can’t think of anything more exciting.

Welcome to the future of energy.

In 2015, home batteries stole the scene and revolutionized the solar industry, changing the way we think about solar energy. We can’t wait to see the new technology 2016 has in store for the industry.