Time-Shifting Your Energy
Save money and reduce your carbon footprint
The cost of our electricity depends on Time and Location. In this post I discuss how energy storage and Time of Use Tariffs (TOU) tariffs can help reduce our energy costs.
I know Northern California best but I use examples from other places in the USA. Any and all feedback, corrections and/or additions, is appreciated.
Time Shifting Using a Battery
This note was prompted by this question:
Is it financially feasible to time-shift significant portions of a household electrical consumption with a battery that is charged from the grid at Off Peak rates and then discharged during the Peak period?
I thought this might be possible because:
The prices of batteries continue to decrease,
New modular batteries are very flexible,
The electricity rates continue to raise,
The spreads between Peak and Off Peak rates in many TOU tariffs are 2x, 3x or even higher.
A time-shifting battery could be charged from the grid and would help with electrical affordability. Such a battery would provide other benefits, like improved resilience, but the main goal would be to make electrification more affordable to a larger set of households.
To do a financial analysis we have to consider the costs of adding a battery and then the financial gain. Let’s start by looking at a modern modular battery.
Modular Batteries
The new modular batteries are organized around stacks with a control module, one or more storage modules, and optionally a bidirectional charger. The stacks are connected to the rest of the house through some controller or switch.
These batteries are very flexible. A installation can start with planning, permitting and electrical wiring, and with an initial stack with a control module and one storage module. That installation can later be expanded with more modules, a bidirectional charger, or more stacks.
Three modular batteries currently available in the US are Anker Solix X1, PointGuard, and EP Cube (not yet approved in California).
Below is a PointGuard stack; from the top: 1 controller module, 1 V2X Module (Vehicle to Grid/House), and 3 storage modules.
Flexible Controllers
The controllers in these batteries can work as Solar Inverters, they can charge the battery from the grid or from solar, and they can discharge from the battery to the house, or export to the grid. As a Solar Inverter they can replace standalone string inverters w/ or w/o power optimizers, or microinverters.
Lighter Modules
Another benefit of these batteries is that each module is significantly lighter than a traditional all-in-one batteries and can be installed quicker and with fewer people. A PointGuard 5kWh module weights 125 lbs, while a PowerWall 3 weights 280 lbs.
Battery Costs
To check the practicalities of a time-shifting battery we need to make some estimates for the cost of the battery.
Ballpark numbers (DIY)
I poked around online and asked some distributors for sanity check. The numbers listed below are for unit of 1, with no special discounts.
Zendo Solar lists a Anker Solix 5kWh stack for $5K. That includes a Power Module, a 5kWh storage Module, and a Backup Controller. A 10kWh stack using a second battery module totals $7K.
The other brands are available at similar prices: PointGuard ($5.9K at Self2Solar), and EP Cube Lite ($5.7K at NAZ in Arizona).
Installation Cost
Unless you are DIY, you need an electrician / installer. An installer will have special discounts but they will also add labor cost, overhead and profits. The modular structure of the batteries should mean a lower installation cost but I don’t have any quotes I can share at this time.
Since I’m just looking for a very rough ballpark, I’ll use the DYI value for most of the discussion below: $6K for a 5kWh stack and $8K for a 10kWh stack. This is an optimistic number but it helps provide a reference point.
Battery Financials
Operations
One way to get a rough estimate for the operational benefits of a time-shifting battery is to assume that the full capacity of the battery is used daily to shift the cost from Peak rate to Off Peak rate. i.e. Capacity * (Peak - OffPeak) * 365 days.
My post on TOU Tariffs includes multiple examples of TOU rates. The EV2-A PG&E Tariff we use in our household has spreads as high as $0.30 which would translate to 547.5 $/year for a 5kWh battery. The EV2A rates vary through the year, and a more accurate number is $400/year.
In Hawaii, the spread for the new TOU Pilot is $0.43,\ year around so that same 5kWh battery would yield a significantly larger value of $780/year.
A larger battery yields bigger numbers. For PG&E’s EV2-A, the savings for a 10kWh battery would be $800/year, and for Hawaii, $1,560/year.
Caveat on Demand
The energy demands of any household vary through the year. In our case, in the winter our HVAC regularly uses more than 10 kWh in the EV2-A Peak/Partial Peak periods but 5kWh is enough in the summer. On the other hand, a hot region like the Central Valley needs A/C in the summer and that consumes a lot of energy.
We now have all the data to do the financial analysis.
Payback Analysis
Using the DIY cost number, the $6K cost of a 5kWh stack would need 16 years to be paid back in California, while a 10kWh ($8K) would need 10 years. Hawaii’s financials are better, payback for a 5kWh would be 7.5 years and that for a 10kWh just a bit over 5 years.
16 years may be too long for a pure financial ROI. 5 years is probably fast enough.
Hawaii is a fertile place for batteries. EP Cube has multiple examples of installations of their systems in Hawaii; this one shows a crew of 3 installing two systems a day!
Installers and Financial Help
The price of a battery installed by a contractor will almost certainly be higher than the numbers I’ve been using. That means the payback period will be longer.
On the other hand, there are financial plans to help install batteries, some from the states and the feds, some from the electric utilities themselves, like this program from San Diego Community Power. Our own CCA, Peninsula Clean Energy, has been working on a DER plan that should include batteries; I’ll report when the information is available.
Battery-Ready Construction
The California Energy Code (CEC) from 2022 code requires new residential stock to be Battery-Ready. This means that installing a battery will be faster and cheaper. There are several electrical panels that specifically advertise compliance with this requirement; Span panel was an early example and now Schneider Pulse, from one of the biggest names in the industry.
Beyond Financials
A battery also provides other benefits beyond pure financial benefits. Below I cover GHG and Resilience and hint at Solar Panel and VPP.
Reduced GHG Emissions
A household can reduce their GHG load by charging from the grid at a time that it is cleaner, and discharging it later, displacing “dirtier” grid energy. Below is the CO2 produced by the California grid through a recent day.
Resilience
A TOU battery can also provide some resilience. Depending on the size of the house loads and the battery, you may need to place some circuits on a separate panel, which means extra electrical work, or just manually turn off circuits through breakers. Or, even better…
Bidirectional Charging Support
A small battery can be complemented with the much larger (+80 kWh) battery in an EV through V2G/V2H can provide multi-day resilience.
The EVs in USA EVs are catching up with the European EVs and we will see more bidirectional charger offerings as Standards are finalized. An appeal of the PointGuard solution stack is its V2X module capable of 25kW DC in/out.
RoofTop Solar
A battery in a house with rooftop solar can be charged using “surplus” PV, no need to import. This can be used to maximize your self-consumption, or to maximize export credits by exporting at the highest possible rates.
Here in California, we have a dichotomy. On one hand, under NEM 2.0, exports gets full retail credit, so there is little financial benefit in adding a battery (aside - NEM disallows exporting non-self produced energy, so you can’t first import, time-shift, and later export).
On the other hand, NBT (aka NEM 3.0) export rates are very minimal. This means that there is a big incentive to time-shift for self-consume, but minimal incentive to export, even when the grid needs the energy.
Solar export tariffs are controversial and varied. Other locations have different export tariffs to what we have in California; look for examples here.
Virtual Power Plants
Yet another way to leverage a battery is through VPPs. Our own CCA, Peninsula Clean Energy, posted an RFP for VPP software last year; results should be “soon”. The details of the VPP will impact what type of battery is best suited for these programs. The batteries used by Base Power in Texas are fairly large, 25 kWh and 50 kWh; the modular batteries can expand to that size.
Recap on TOU Batteries
I started this exercise to get a ballpark idea of the cost/benefits for a time-shifting battery. My “intuition” was that, as battery costs kept going down, and systems became easier to install, at some point, it would be “cheaper” to install a TOU battery and avoid Peak/OffPeak rates. The bottom line is that, with some exceptions like Hawaii, it is hard to justify adding a TOU battery on pure financial grounds.
As mentioned above, there are other benefits from time-shifting consumption: Resilience, GHG Reduction, potentially VPP, and, in my opinion, adding all of them tells a fairly compelling story. Whether it is enough for anybody depends on personal decisions.
Coda
Counterpoint - Portable Batteries
An alternative to stationary batteries are portable residential batteries. These batteries are cheaper, sold directly to customers, and are easier to install, but they are designed mostly for basic resilience, not necessarily for daily time shifting.
As I’m typing this, an Anker Solix F3800 + Home Backup Kit is $3K. An F3800 is 6kW, 3.84kW (expandable to 26.9kWh), able to manage 2.4KW solar. And, if your interest is only resilience, you can even save some more money just go with an interlock switch.
Other Ways to do Time Shifting
There are other ways to time-shift energy consumption:
An appliance like the Copper range has an embedded LFP battery. The appliance can charge, on a 120V/15A circuit, at Off Peak rates, and it can discharge on demand, avoiding importing at Peak rates.
A Heat Pump Water Heater is a thermal battery. When configured properly, it will heat/charge at Off Peak rates and will discharge (the hot water) on demand. That is what our HPWH does.
The Harvest Thermal solution is another smart HVAC solution leveraging a thermal battery. The system charges with Off Peak rates and delivers hot water on demand.