Battery storage buying guide
What you need to know about adding battery storage, such as the Tesla Powerwall, to your home's solar panel system.
Saving for a rainy day
Home battery storage is a hot topic for energy-conscious consumers. If you have solar panels on your roof, there's an obvious benefit to storing any unused electricity in a battery to use at night or on low-sunlight days. But just how do these batteries work and what do you need to know before installing one?
In this article:
The concept of home battery storage isn't new. Off-grid solar photovoltaic (PV) and wind electricity generation on remote properties has long used battery storage to capture the unused electricity for later use. It's very possible that within the next five to 10 years, most homes with solar panels will also have a battery system.
A battery captures any unused solar power generated during the day, for later use at night and on low-sunlight days. Installations that include batteries are increasingly popular. There's a real attraction to being as independent as possible from the grid; for most people it's not just an economic decision, but also an environmental one, and for some it's an expression of their wish to be independent of energy companies.
If your solar panel array and battery are large enough, you can run your home substantially on solar power. Using electricity from your battery can be cheaper per kilowatt-hour (see Terminology) than using electricity from the grid, depending on the time of day and electricity tariffs in your area.
See some of our other articles on home batteries:
- A case study of the first Australian home to install a Tesla Powerwall battery
- The best cities in Australia for solar and home battery storage
- The rise of home battery installations in Australia
There are four main ways your home can be set up for electricity supply.
Grid-connected (no solar)
The most basic set-up, where all your electricity comes from the main grid. The home has no solar panels or battery.
Grid-connected solar (no battery)
The most typical set-up for homes with solar panels. The solar panels supply power during the day, and the home generally uses this power first, resorting to grid power for any extra electricity needed on low sunlight days, at night, and at times of high power usage.
Grid-connected solar + battery (aka "hybrid" systems)
These have solar panels, a battery, a hybrid inverter (or possibly multiple inverters), plus a connection to the main electricity grid. The solar panels supply power during the day, and the home generally uses the solar power first, using any excess to charge the battery. At times of high power usage, or at night and on low-sunlight days, the home draws power from the battery, and as a last resort from the grid.
This system has no connection to the main electricity grid. All the home's power comes from solar panels, and possibly some other types of power generation as well, such as wind. The battery is the main power source at night and on low-sunlight days. The final back-up is usually a diesel-powered generator, which may also kick in when there's a sudden high demand for power (such as when a pump starts up).
Off-grid systems are usually much more complex and expensive than grid-connected systems. They need more solar and battery capacity than a typical grid-connected system and may also need inverters capable of higher loads to cope with peak demands. Homes that run off-grid need to be particularly energy-efficient and the load demand needs to be well-managed throughout the day.
Off-grid systems generally only make sense for remote properties where a grid connection isn't available or would be prohibitively expensive to install.
For most grid-connected systems, having a battery doesn't necessarily protect you in the event of a blackout. You may still lose all power to your home, despite having solar panels producing power and a charged battery ready and waiting. This is because grid-connected systems have what's known as "anti-islanding protection". During a blackout, the grid and any engineers working on the lines must be protected from "islands" of electricity generation (such as your solar panels) pumping power unexpectedly into the lines. For most solar PV systems, the simplest way to provide anti-islanding protection is to shut down entirely. So, when it senses a grid blackout, your solar PV system shuts down and you have no household power at all.
More sophisticated inverters can provide anti-islanding protection during a blackout, but still keep the solar panels and battery operating so that the house has some power. But expect to pay a fair bit more for such a system, as the hardware is more expensive and you may need more solar and battery capacity than you think to run the house for a few hours during a blackout. You might choose to allow only critical household circuits to operate in that situation, such as the fridge and lighting. That might require extra wiring work.
These are the key technical specifications for a home battery.
How much energy the battery can store, usually measured in kilowatt-hours (kWh). The nominal capacity is the total amount of energy the battery can hold; the usable capacity is how much of that can actually be used, after the depth of discharge is factored in.
Depth of discharge (DoD)
Expressed as a percentage, this is the amount of energy that can be safely used without accelerating battery degradation. Most battery types need to hold some charge at all times to avoid damage. Lithium batteries can be safely discharged to about 80–90% of their nominal capacity. Lead-acid batteries can typically by discharged to about 50–60%, while flow batteries can be discharged 100%.
How much power (in kilowatts) the battery can deliver. The maximum/peak power is the most that the battery can deliver at any given moment, but this burst of power can usually only be sustained for short periods. Continuous power is the amount of power delivered while the battery has enough charge.
For every kWh of charge put in, how much the battery will actually store and put out again. There's always some loss, but a lithium battery should usually be more than 90% efficient.
Total number of charge/discharge cycles
Also called the cycle life, this is how many cycles of charge and discharge the battery can perform before it's considered to reach the end of its life. Different manufacturers might rate this in different ways. Lithium batteries can typically run for several thousand cycles.
Lifespan (years or cycles)
The expected life of the battery (and its warranty) can be rated in cycles (see above) or years (which is generally an estimate based on the expected typical usage of the battery). The lifespan should also state the expected level of capacity at the end of life; for lithium batteries this will usually be about 60–80% of the original capacity.
Ambient temperature range
Batteries are sensitive to temperature and need to operate within a certain range. They can degrade or shut down in very hot or cold environments.
The most common type of battery being installed in homes today, these batteries use similar technology to their smaller counterparts in smartphones and laptop computers. There are several types of lithium-ion chemistry. A common type used in home batteries is lithium nickel-manganese-cobalt (NMC), used by Tesla and LG Chem.
Another common chemistry is lithium iron phosphate (LiFePO, or LFP) which is said to be safer than NMC due to lower risk of thermal runaway (battery damage and potential fire caused by overheating or overcharging) but has lower energy density. LFP is used in home batteries made by BYD and Sonnen, among others.
- They can give several thousand charge-discharge cycles.
- They can be discharged heavily (to 80–90% of their overall capacity).
- They're suitable for a wide range of ambient temperatures.
- They should last for 10+ years in normal use.
- End of life may be a problem for large lithium batteries.
- They need to be recycled to recover valuable metals and prevent toxic landfill, but large-scale programs are still in their infancy. As home and automotive lithium batteries become more common, it's expected that recycling processes will improve.
Lead-acid, advanced lead-acid (lead carbon)
The good old lead-acid battery technology that helps start your car is also used for larger-scale storage. It's a well-understood and effective battery type. Ecoult is one brand making advanced lead-acid batteries. However, without significant developments in performance or reductions in price, it's hard to see lead-acid competing long-term with lithium-ion or other technologies.
- They're relatively cheap, with established disposal and recycling processes.
- They're bulky.
- They're sensitive to high ambient temperatures, which can shorten their lifespan.
- They have a slow charge cycle.
One of the most promising alternatives to lithium-ion, this type uses a pumped electrolyte (such as zinc bromide or vanadium ions) and chemical reactions to store charge and release it again. Redflow's ZCell battery is the main flow battery currently available in Australia.
- They can be discharged to 100% of their capacity and have no residual discharge so they won't lose charge over time.
- They don't lose capacity over time.
- They operate well in high ambient temperatures.
- They're relatively easy to recycle.
- They should last for 10+ years.
- Being new technology, they're relatively expensive compared to lithium-ion.
- They don't tolerate cold well (below 15°C).
- They require frequent maintenance which takes them temporarily out of service.
Battery and storage technology is in a state of rapid development. Other technologies currently available include the Aquion hybrid ion (salt water) battery, molten salt batteries, and the recently announced Arvio Sirius supercapacitor. We'll keep an eye on the market and report on the state of the home battery market again in the future.
For most homes, we think a battery doesn't make complete economic sense yet. Batteries are still relatively expensive and the payback time will often be longer than the warranty period of the battery. Currently, a lithium-ion battery and hybrid inverter will typically cost between $8000 and $15,000 (installed), depending on capacity and brand. But prices are falling and in two or three years it may well be the right decision to include a storage battery with any solar PV system.
Nevertheless, many people are investing in home battery storage now, or at least ensuring their solar PV systems are battery-ready. We recommend you work through two or three quotes from reputable installers before committing to a battery installation.
When you're doing the sums to decide whether a battery makes sense for your home, remember to consider the feed-in tariff (FiT). This is the amount you're paid for any excess power generated by your solar panels and fed into the grid. For every kWh diverted instead into charging your battery, you'll forgo the feed-in tariff. While the FiT is generally quite low in most parts of Australia, it's still an opportunity cost you should consider. In areas with generous FiT such as the Northern Territory, it's likely to be more profitable to not install a battery and just collect the FiT for your surplus power generation.
Watt (W) and kilowatt (kW)
A unit used to quantify the rate of energy transfer. One kilowatt = 1000 watts. With solar panels, the rating in watts specifies the maximum power the panel can deliver at any point in time. With batteries, the power rating specifies how much power the battery can deliver.
Watt-hours (Wh) and kilowatt-hours (kWh)
A measure of energy production or consumption over time. The kilowatt-hour (kWh) is the unit you'll see on your electricity bill because you're billed for your electricity usage over time. A solar panel producing 300W for one hour would deliver 300Wh (or 0.3kWh) of energy. For batteries, the capacity in kWh is how much energy the battery can store.
BESS (battery energy storage system)
This describes the complete package of battery, integrated electronics, and software to manage the charge, discharge, DoD level and more.
Our thanks for the assistance of ITP Renewables in producing this guide. We'll be working with them again on a future product review of storage batteries.