Tesla home batteries could boost rooftop solar

When Tesla founder Elon Musk said last week that his electric car company would move into the home energy business, no one was surprised. Analysts had predicted the announcement for months, especially as Tesla ramped up construction on a massive battery factory near Reno, Nevada.

But that didn't stop rooftop solar advocates from celebrating.

Tesla's plan to power homes with batteries is the latest sign of a coming energy revolution, experts say. That revolution will take the form of rooftop solar paired with battery storage, a combination that could allow homeowners to reduce their dependence on utilities — or abandon utilities entirely.

"The solar industry is growing really fast, and storage isn't an absolute necessity in the next few years," said Shayle Kann, a vice president at GTM Research, a clean-tech consulting firm. "But in the long term, it's very important."

The rooftop solar industry is already booming in California, with about 250,000 systems now online. The state's solar industry employed nearly 55,000 people last year, according to the Solar Foundation, and 73 cities in Southern California alone installed at least one megawatt of rooftop solar capacity in 2014, per GTM Research.

But the industry's long-term growth is limited by a fundamental flaw: Solar panels only generate electricity when the sun is shining. That's less of a problem in sunny Southern California than it is elsewhere. But even in the desert, solar panels don't do much good in the evening, when people use the most electricity in their homes.

That's where the batteries being produced by Tesla and other companies come into play. If we could store the excess energy that solar panels generate during the middle of the day — and then use that energy to power our homes at night — well, that would be a big deal.

"Solar right now is an open loop, where we use the grid for storage," said Vincent Battaglia, CEO of Renova Solar, a Palm Desert solar installer. "Batteries close the solar loop."

Some advocates believe that combined solar/battery systems — known as "microgrids" — are the key to protecting consumers from a utility industry that is increasingly threatened by solar technology.

In California, for instance, Southern California Edison and other utilities have been pushing new electricity rates that critics say would make it harder to save money through solar. And state officials will decide next year whether solar customers should be paid substantially less for the electricity they feed into the grid.

"All of those issues that they're trying to create that are impediments to the formation of a renewable energy economy, we are able to circumvent with storage," Battaglia said. "A microgrid solves the problem by allowing the customer complete control over their energy."

Tesla isn't the only company getting into the home battery game.

HELIOPOWER, RENOVA

In the Coachella Valley, a region east of Los Angeles whose best-known city is Palm Springs, Calif., at least two solar companies — Renova and HelioPower — are marketing their own storage systems. HelioPower complements its commercial solar systems with batteries produced by Sharp Electronics, and Renova will install its first two residential solar/storage systems later this month, using batteries produced by a German company, Sonnenbatterie.

That said, it will probably be a few years before homeowners start buying batteries en masse, because the technology is still so expensive.

Tesla, for instance, is charging $3,500 for a 10 kilowatt-hour battery, which could power the average California home for about half a day. That price doesn't include installation and some equipment.

SolarCity, the powerhouse solar installer chaired by Musk, has said it will sell Tesla's "Powerwall" home battery systems for $7,140, including installation and equipment. The company will also offer a nine-year prepaid lease for $5,000.

"For some commercial customers, it's an economically preferable move. That's generally not true for residential customers yet," Kann said.

Some solar companies, meanwhile, are skeptical of the battery prices Musk announced last week, pointing out that Tesla's systems won't be available for at least a few months.

"Yes, it's cool. Yes, it's sexy. Yes, it's ... but Tesla's announcement was a pre-release," HelioPower president Scott Gordon said in an email to company staff earlier this week. "As of now, there's no information about how these batteries will integrate with existing systems or whether they will require an entirely new inverter or other power electronics."

Still, Tesla's battery prices are lower than what analysts expected, and lower than what other companies are offering. Renova will sell its 16 kilowatt-hour battery systems for about $20,000, before state incentives are applied.

And Tesla's prices could drop significantly in 2017, when the company's "Gigafactory" is expected to start producing large quantities of batteries in Nevada.

"I'm not surprised that Tesla — with their market share, and with their ability to think big — is going to be able to come out with moderately priced technology," said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association, a trade group.

The other problem with Tesla's home energy systems is that they're not powerful enough for battery-powered consumers to abandon the grid, a major goal of some battery advocates. That's likely to change as technology improves, but for now, most homeowners who buy batteries will look for protection against blackouts, experts say.

And even in the long term, some experts are skeptical that electricity consumers will ditch the traditional electric grid. Kann, for instance, called himself a "grid defection skeptic," predicting that most customers won't want to give up the reliability provided by the grid.

"If you want to go off-grid entirely with solar plus storage, and maintain anything close to that level of reliability, you have to oversize your system — and that ends up being pretty expensive," Kann said. "I just think it doesn't make sense for most customers to cut the cord."

For most people, Kann said, batteries will make more financial sense as utilities start to charge residential customers more for electricity when demand is highest. In California, residential customers can already opt into so-called "time of use" electricity rates, but state officials are considering whether to make them the default in four or five years.

Under time-of-use rates, homeowners with solar/battery systems would be able to cut their bills substantially by generating their own electricity during the day and then using it at night, when rates would be highest.

Sammy Roth covers energy for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.