Powerwall Savings and ROI: How to Get Your Money's Worth
Your Utility May Prevent You from Maximimizing Solar ROI if You Don't Have the Powerwall
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Net Metering Definition
Net metering is a renewable energy technology that lets solar-powered homes and businesses put their surplus solar-generated power back onto the grid and sell it back to the utility company at a predetermined rate for other homeowners to use. Sometimes utility companies institute net metering programs, or they're created by state or city-specific clean energy laws.
Understanding Why Net Metering Matters
Think of a home without solar panels. To use electricity, the home must draw from the utility company's energy reserves. The sun, however, generates a renewable form of energy, meaning it's infinite in its capacity.
With the sun's infinite capacity comes the ability for homeowners and business owners to produce surplus solar power from their solar modules. However, they need a way to store it, so they can use it when the sun isn't out.
For many, the solution to storing surplus solar power has become net metering coupled with battery backup. Through net metering technology and policies, utility customers receive compensation, either through a credit on their bill or a check from the utility for their excess solar-generated power, which offsets the energy pulled off the grid at night and during poor weather.
The Sustainability of Net Metering for Utilities and Customers
While many utilities started their solar net metering programs with net metering, many argue that this metering system isn't sustainable for utilities after a certain amount of homes add solar.
Utilities and power companies typically have two main arguments against net metering, neither of which considers the interests of the homeowner. First, utilities argue that solar customers don't cover grid maintenance costs when they only pay a connection fee. Secondly, net-metered customers put energy on the grid during low demand times and draw power during peak usage times without paying for it.
Net metering, as it stands currently, isn't a sustainable solution by itself. It's a Band-Aid approach to solar power storage. As solar storage options have become affordable, people have started to rely less on the grid for their solar storage needs, turning to battery backup to leverage their solar arrays. Instead, they use the grid as a plan B, should their system fail.
What Is Needed To Maximize Net Metering Benefits?
Leveraging net metering incentives to their fullest extent means much more than adding solar. Fully leveraging the benefits of net metering comes when grid-tied homes use battery backup and highly efficient solar panels, which are properly installed for maximum PV ray absorption.
Why Net Metering Requires Homes Stay Connected To the Grid
Receiving net metering benefits requires having a grid-tied home. Off-grid homes don't have a way to put excess solar power on the grid or pull power from it. While off-grid homeowners can leverage solar power, they cannot benefit from net metering credits and savings, but they can fully own their power and still rely on battery backup.
Why Having Battery Backup Matters With Net Metering
If the utility company offers less than a 1:1 credit (the 100 percent market-rate price) for the solar energy you export back onto the grid, you will want to have a form of battery backup. Battery backup empowers solar homeowners by providing full control over their excess solar power, including how much is stored and when it is used.
What Makes the Powerwall a Good Investment?
The Impact of Time of Use Metering on Savings
We won't candy-coat the truth. The price of storing enough solar energy to power a home isn't cheap.
We realize that the cost of backing up the entire home isn't an option for everyone. As a result, we offer three levels of battery backup. These backup options help people with varying energy needs have access to, and control over, their excess solar power.
While home batteries don't meet everyone's needs, they do make sense in some situations. Consider with us when a home battery, like the Powerwall, makes sense and when it doesn't.
While, ideally, the Powerwall would work for every homeowner, this isn't always the case. Several things can make the economics of installing a Powerwall nonsensical. Some of these include electricity rates, net metering rates, whether the home has solar and the payback period.
Utility rates impact home battery savings. Individuals with Time of Use (TOU) metering get charged varying rates for electricity pulled off the grid at different times. Areas that don't have TOU rates make it so those with a Powerwall can't tune their system to take advantage of the best electricity price.
Net Metering Rates and Solar
While many utilities have transitioned away from favorable net metering, some areas still pay decent rates to those producing excess solar. Utilities that credit, or pay, their customers the same or more for their production than for the power they pull off the grid makes storage options economically nonviable.
Adding a Powerwall to Homes Without Solar
Homeowners can add a Powerwall without adding solar. However, if they do, they miss out on the ITC, which reduces the cost of adding a home battery. They also miss out on the benefits of generating solar power, like avoiding fluctuating electricity rates and decreasing their carbon footprint.
The Cost of a Powerwall Versus Security
If you only want to add a Powerwall to save money, it may not make sense. The savings of a Powerwall come from the price of the Powerwall, the avoided electricity rate and the home battery's life expectancy.
While adding a Powerwall isn't a good fit for everyone, there are situations where it makes sense. Some of these situations include when the homeowner values security, when the utility offers TOU metering and when the area has Powerwall incentives.
Investing in Security
It's hard to put a price tag on the peace that being prepared brings. Those who value comfort and protection will meet this need with a home battery.
With a home battery, homes can continue to run during a power outage. While most power outages only last a couple of minutes, others can last hours or days, making it harder to keep frozen and refrigerated food fresh, keep life-saving machines working and the A/C or heater running.
In 2018, power outages in the United States came to an average of 5.8 hours throughout the year. These numbers increase when natural disasters and hot summers put extra stress on the power grid.
Optimizing Benefits of Solar and TOU Metering
If the utility company has a TOU metering program, then those with a Powerwall can use their stored power when utility-generated power costs more. If they also have solar, they can power their home and charge the Powerwall during the day at no extra cost. If the TOU program has an EV powering rate, they can save even more by filling their electric vehicles at the lowest rate.
Home Battery Incentives for Powerwalls
Home battery incentives also make adding Powerwalls far more affordable. Depending on where you live, some areas have both federal and state home battery incentives.
When homeowners purchase a home battery with, or in addition to, an already existing solar array, they can use the ITC on their energy storage system. Those running a business from their home may also benefit from the savings that the MACRS provides.
Powerwall Payback Period and Longevity
To calculate your Powerwall payback period, divide the price of the Powerwall installation by the yearly savings. To calculate your yearly savings, subtract your annual costs to charge the Powerwall from your on-peak usage savings. These figures will differ for various system setups and utility rates.
For instance, a home that uses solar for charging will not have any Powerwall charging costs to subtract. Utilities with various rates at different times of the year and day will also complicate the on-peak usage savings.
After determining the ROI, comparing it with the warranty length will help customers know if the cost of the Powerwall will pay for itself before needing a new one. Powerwalls have 10-year warranties, so an ROI longer than 10 years wouldn't make financial sense.
How Many Powerwalls Do You Need?
To determine how many Powerwalls will meet your needs, first decide what it will power. Some people want the Powerwall to cover all their nightly electricity needs. Others plan on using the Powerwall only for emergency use.
What these needs look like will vary from one person to the next. Energy habits, appliances and the efficiency of the home all play a role.
However, in 2019, the average energy usage in the United States equaled 877 kWh a month. If we divide this number by the average days in a month, and hours in a day, we get 29.23 kWh per day and 1.22 kWh per hour.
877 kWh / 30 days = 29.23 kWh per day
29.23 kWh per day / 24 hrs. =1.22 kWh per hour
Then we can look at the number of hours we want the home powered by the Powerwall. If we used the Powerwall from 5 p.m. to 7 a.m., we would need it to run for 14 hrs., which would equal 17.08 kWh.
14 hrs. * 1.22 kWh per hour = 17.08 kWh per night
The Powerwall can store up to 13.5 kWh of usable energy at a max continuous rate of 5 kW, which means the average American home would need at least two Powerwalls to power a full night of usage. However, interested parties should note that this estimate isn't accounting for energy use fluctuation, so one Powerwall may work for your situation.
Powerwalls and Solar Homes
Adding a Powerwall to a solar house means homeowners can use their excess solar production to charge the Powerwall. However, if the home's array isn't large enough to power the house and the Powerwall, this home battery will need to draw power from the grid to charge.
How Many Solar Panels Does It Take To Charge a Powerwall?
Because solar companies typically size systems to meet the home's yearly energy needs, the solar panels should charge a Powerwall without any problems. However, increased energy consumption, or an array sized to offset a portion of the utility bill, will not produce enough to fill the Powerwall.
The number of solar panels needed to charge a Powerwall depends on the wattage of the modules and the time you want to charge it in. An average residential solar panel will produce between 250 and 400 watts per hour. One of these solar panels can charge a Powerwall in 35 to 56 hrs, which isn't ideal for daily use.
14,000 watts / 250 watts = 56 hrs.
14,000 watts / 400 watts = 35 hrs.
If you wanted a solar array to charge a Powerwall within five hours, it would take between seven and 12 solar panels.
14,000 watts / 5 hrs. = 2,800 watts
2,800 watts / 250 watts = 11.2 solar panels
2,800 watts / 400 watts = 7 solar panels