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Are all Energy Storage Systems (ESS) Created Equal, Savings vs Back-up ESS

While the components of energy storage systems (ESS) have stayed the same over the years, their usages and designs continue to change.  The primary purpose of an ESS systems in residential homes is to store power, usually from solar.  The two primary drivers for ESS have been need and financial savings.  Let’s take a detour and review a brief history of residential ESS.


In 2006 when I started with Synergy Solar, the primary ESS being installed were off-grid.  These systems were based on need for properties in remote areas of Cazadero, the hills of Healdsburg and other Sonoma County areas with no power and/or bringing power to these properties was cost prohibitive.   Starting in 2014 and 2015, we began installing  a few grid-tied solar and ESS’s systems for back-up, primarily to back-up emergency medical equipment, or wells on country properties.   At Synergy we saw the desire for grid-tied batteries start making sense for the average solar customer in 2017.  This was primarily for two reasons, cost was coming down with ESS and the devastation of the Tubbs fire in Sonoma County, demonstrated the need for homes to have back-up.  Many customers began evaluating the value of ESS vs a Generator, with ESS being more financially viable in the long term.  By the time the Kincade fire devastated Sonoma County in 2019, solar with ESS was being installed in abut 25% of the homes vs solar by itself. 


Pre April 2023, PG&E ran under the net energy metering program (NEM) which paid customers at retail, or near retail rates for exporting power to the PGF&E grid.,  The grid was like a financial battery for the customer, storing solar credits when solar was exported to the grid, that could be cashed in during the evenings to cover night time usage.   While there was a financial advantage to store power to the ESS when PG&E Rates were low and use power from ESS  when PG&E peak rates were high “peak shaving”, the driving force under NEM was back-up ESS. 


And then in late 2022, PG&E announce it would be moving all customers to Net Billing Tariff (NBT), reducing the financial benefit of exporting power to the grid by 75%.  This changed the way solar systems were designed for the industry, requiring energy storage systems (ESS) in most cases, solar only systems were all but dead.  This change had a big effect on the solar industry, but it could have been devastating if not for the fact that PG&E rates have increased 46% between 2021-2023, and another 13% in January 2024.  These continue increase are driving more and more customers to look at the alternatives to PG&E like solar with ESS.


With this history behind us, lets delve into the differences of savings ESS vs Back-up ESS.  In general, it is my belief that homeowners who desired solar only under NEM will be adding savings ESS under NBT.  The need to not have back-up ESS can occur for a multitude of reasons.  They could include:

1)    They already have a generator installed for back-up when the grid is down.

2)    The sub-feed they are on is rarely down (shared with a hospital or emergency services.

3)    The homeowner is not concerned with power outages.

4)    The electrical layout of the homeowner’s electrical system makes ESS back-up difficult.


So based on the above, let’s look how a savings battery can work for these customers.


Back in 2017 Enphase released their first generation of savings battery.  My business partner and I both installed a pair of them, and I was happy with the result.  During the mornings when power was cheap, I could charge my savings ESS and then discharge it during expensive peak timeframes, lowing my costs.  Another benefit was it help me minimized my dependence on the grid, storing my power locally instead of importing and exporting it to the grid.  I felt I was doing my part to minimize the need for power distribution to my house during the fires which were often caused by these transmission lines.  And in 2017, most people who were installing ESS were doing so for back-up, so this product was hard to sell, a few years ahead of its time.


And now with net billing tariff and PG&E reducing the rate it pays for exported solar power by 75%, the Enphase savings battery is ready for prime time.  Many ask why, a savings ESS can cost about 40% less than the Enphase ESS for backup.  The reason is we need few components:


1)    We do not need a controller/disconnect.

2)    We need less storage since we do not need backup reserves.

3)    We need significantly less electrical work and no protected loads panel (PLP)


Simply put, when the grid is up and solar is over producing, we charge our ESS rather than exporting it to PG&E for pennies.  Then rather than importing expensive power at night, we discharge from our ESS.  The way we configure ESS for savings is to look at the average nights usage and install enough battery storage to cover it (usually 75-80% utility offset) or we look at maximum nighttime usage to get a higher utility offset (80-90%).  This simplified ESS with solar makes PG&E’s NBT a great savings opportunity for homeowners and allows more control over fixing a home’s utility costs.  The disadvantage of this system is when the grid is down, the ESS does not provide any solar to the home.


A back-up ESS offers all the benefits of the ESS designed for savings with the added benefit of allowing power when the grid is down.  At my home I installed a backup ESS in April of 2020 after the frustration of running a portable generator through the Kincade fires when our power was out for days.  About 6 months after I installed it, a car ran into the power pole near our home.  My wife never new we lost power, and after the power was restored, I walked around the neighborhood advising neighbors the power was up and they could turn off their generators. 


We need a few additional components as mentioned above for backup.  The first is a controller or disconnect, which disconnects the ESS from the utility ensuring we do not back-feed the grid (makes it safe for Utility lineman to repair lines).  We need additional storage since in addition to daily “peak shaving” like with a savings battery, we need battery reserves to cover our needs if the grid goes down and the sun is not shining on the following day (designing for Murphy’s Law).  Installing a protect loads panel or PLP is also offers a good design for backup.  At my house I have most of my homes load on my PLP but have left my hot tub, and electric car off my PLP since the last thing I want to happen in an outage is transfer my home ESS into my car battery or keep my hot tub hot at the expense of running my refrigerator.


At First response Solar due to NBT we are almost exclusively installing ESS with solar these days.  As part of the initial consultation, we work with you to discuss the options of savings vs back-up ESS.  Having both options allows us to provide the proper solution for your home,  without forcing the solution.  With almost 60% increases in PG&E rates over the past 3 years, don’t you think it is time to take control of your energy needs!


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