Battery-First or Solar-First
Should we focus on batteries for a better local grid?
The Goal
Many of us share these goals:
The Transmission and the Distribution Grid are equally important
Large Generation sources deliver energy through the Transmission Grid
Smaller Generation sources leverage the Distribution Grid
Consumers are active and empowered participants
Consumers can own assets that will help the grid, themselves and other consumers
Until recently, I used a Solar-First approach towards these goals: start by adding photovoltaic (PV) panels to a property.
Solar-First
In the Solar-first approach, the energy from the solar panels in a property reduces the electrical load and extra overflow goes to their neighbors in the local distribution grid. In this approach, customers can later add batteries to store the surplus from their solar panels, mostly to maximize their self-consumption.
A Solar-first approach is hinted in the California Energy Code (Title 24, part 6): earlier versions emphasized Solar Panels, while later versions added batteries. Reach codes in different jurisdictions also follow this approach, and so does the California Public Utilities Commission (CPUC) when it created the transition from the old Net Metering program (NEM 2.0) to the new Net Billing Tariff (NBT, though often abbreviated as NEM 3.0).
Battery-First
Solar-first seemed natural when solar panels were cheaper than batteries and solar penetration was low, but there is another approach: emphasize installing batteries first, and add solar later if and when it is appropriate. This approach is enabled by reductions in the cost of batteries, a reduction of the export value of electricity, safer batteries, and improvements in battery installation and permitting.
Batteries have several advantages over solar panels: they do not require access to a solar-friendly roof, they can be charged even when its not sunny, and they can be discharged on demand. Batteries can even be useful if the customer does not own their residence!
Scenarios
Here are some scenarios where a battery can be leveraged:
Customer has an interconnect with the distribution grid through which it can export up to a given amount. The interconnect could be inherited from a Solar Panel value (NEM or NBT), or it might be a battery-native agreement. A typical battery product in this scenario would be a Powerwall.
Customer has a battery but cannot export to the grid. The battery just serves the local load. This is a variation of the old electrical generator setup, except that the battery can be charged (no need to get fuel). Traditional residential battery vendors (Tesla, Enphase, LG, Franklin, etc, etc) can do this but I’ve recently seen more advertisements for new vendors like EcoFlow, or Anker Solix.
Customer has a battery with electrical outlets; individual loads/appliances have to be connected manually to the battery. EcoFlow and Anker have products for this.
Note: In this note I am ignoring the role of the car’s ability to do Vehicle-to-Grid (V2G) and Vehicle-to-Load (V2L) to simplify the presentation.
Benefits
A Battery-based approach provides some of the same benefits as a Solar-first approach, but also additional ones:
Batteries can time-shift the load. This can be used maximize the use of renewables, or balance the load on the grid, or reduce the cost.
Batteries can save money by using energy previously self-generated, or one generated earlier elsewhere, when the cost was cheaper.
Batteries can provide resilience when power fails. This is very important in some markets, and it becomes more important over time due to extreme weather events.
Batteries can be aggregated. A customer that owns a battery can participate in a Virtual Power Plant (VPP) and gain financial benefits; no need to own a roof with sun exposure.
Batteries can provide a glide to Solar Panel. The inverter in a battery might be reused. Some of the battery products mentioned above already support input from PV panels.
A battery is an asset owned by the customer. A portable battery can even be moved when the customer changes residences!
Supporting a Battery-First Approach
A Battery-First approach can be supported in different ways:
Jurisdictions can simplify permitting and inspection of batteries. Most notably are inspections by Fire Departments.
Different groups can simplify and support financing of batteries. Community Choice Aggregators (CCA), Cities, Counties, non-profits, they can all help here.
Utilities can recognize the value of this unique dispatchable resource. A rate can be tailored to the properties of a battery household and it can compensate for exporting at the most desireable time for the grid.
CCAs control the generation side of their customers, while the Investor Owned Utility (IOU) controls the delivery side. Traditionally, CCAs try to mimic the rate structure of the IOU to avoid confusing the customer but, under NEM 3.0, the export delivery credit is so low that the customer can ignore it. Within a battery-first household, the questions facing the customer would be: when to charge the battery and when to discharge the battery. That might free the CCA to design its own side of the rate to maximize whatever properties it wants to encourage.
Final Readings and Credits
At our house we have been following a Solar-first approach: we added solar panels last year and we have been considering adding batteries next year. We are benefiting from our Solar Panels but I’m very aware that not all of my neighbors can replicate our approach and I’ve been a strong advocate of different efforts to spread these benefits more widely.
Two specific tools to spread the benefits of Solar PV are self-consumption by consumers with multiple meters in their properties (e.g. schools and multi-family residences) and Community Solar. The CPUC took action against the first tool last year but it is looking better this year (SB-1374, see this roundup of bills) but the CPUC just acted against Community Solar (see my comments); we will see if the legislature can do anything there.
Even if the above efforts were to succeed, the situation is unfair. VPP might help (I’ll write a note on VPPs at some point) but only if a consumer has significant assets. So, back to the properties of Solar Panels as assets.
I have been tracking the prices of batteries cells for a while, and my Facebook feed has been showing me more portable batteries recently. Last week I listened a couple of podcasts in the “Catalyst w/ Shayle Kann” show; one was an interview with Ahmad Faruqui on Rate Design, the other an interview with Jigar Shah on “Can VPPs save rooftop Solar“. Those two interviews made several things click in my head…
I wrote this post to try to clarify in my head how all these things interact with each ohter. It’s just a first version but it helped me; hopefully you will also find it useful.
My thinking is that solar first in California has almost reached saturation point in terms of usefulness to the grid.
It is only useful to the consumer if on NEM 2.0 (that’s where you get almost retail price for electricity you sell back to the grid).
NEM 3.0, where you get a few cents for what you sell, a solar first is hard to justify. Batteries are needed to absorb the excess solar generated during the day to self consume that energy in the evening.
Owning an EV and charging from the solar panels could make solar first viable, especially if you could use the substantially larger battery of an EV as a substitute for a home battery.
Many of us are not really interested in the technical aspects of solar power - we only are involved because it's the sustainable thing to do.
I bought my own solar panels in 2002, then hired my own contractor to install.
Please the first time you use an acronym in each post (CCA, VPP) please spell it out. I have to look them up every time!
I'm still not sure that batteries are a sustainable option. They are still not recyclable, use heavy metals mined far away, and don't last long enough. We also need to push for more reusable, sustainable materials. And alternatives to solar, such as local wind (where it is common) and small water turbines where water is already moving by gravity (pipes and streams.)