Solar panels and battery storage: the complete beginner’s guide

After sunset, solar homes get their power from the grid. But with falling costs, battery storage is starting to make a lot of sense.

Photo of the sun against a blue sky.

Just like how solar panels have steadily dropped in price over the past few decades, lithium-ion (li-ion) batteries have gotten cheaper too, driven by their widespread use in portable devices, electric vehicles, and massive grid-scale storage batteries.

Solar homeowners tend to be naturally curious about storage batteries because they’re such a great complement to solar panels: after all, the sun doesn’t shine all the time, but it would be great to run on solar electricity 24/7. Batteries make this possible, and the decreasing cost means that the technology is within reach of more people.

However, even though the price of li-ion batteries has dropped a lot, it still hasn’t quite reached the point where it’s cost effective for most homes.

Still, there are incentives available that help to bring down the cost, and there are situations where a home storage battery can help save money or be an attractive alternative to fossil-fueled backup power. We’ll talk about those in this article, but first let’s cover the basics of home storage batteries.

Home solar systems don’t work in a blackout

One of the things that surprises some new solar homeowners is that your solar system will stop producing electricity during a blackout, even if the sun is shining.

This is because grid-connected solar homes generate alternating current that must be synchronized to the same frequency as the grid - 60 hertz in the case of North America. If a blackout happens, there’s no power signal to synchronize with, and the inverters shut down automatically. This is also done to protect utility workers who might be working on downed power lines. It would be potentially lethal if home solar systems continued to send electricity into power lines that workers expect to be depowered.

When the inverters shut down, the solar panels stop generating electricity because there’s nowhere to send it - unless you have a battery system.

How home storage batteries work during a power outage

During a blackout, a home solar system with a battery can be programmed to run as an island, disconnected from the grid. In this mode, your solar panels send electricity into your home to keep your lights on. If there’s excess electricity that your home isn’t using, it’s used to recharge the battery.

Technical side note: battery systems can either be AC-coupled, which means they receive AC power from your inverter, or DC-coupled, which means they receive DC power from your solar panels via a charge controller. Most small off-grid battery systems, such as RV and marine applications, are DC-coupled, while modern home solar battery systems are often AC-coupled. While there are technical pros and cons to both approaches, from the point of view of keeping your lights on, there’s really no difference. Both types of systems will keep your home running.

If your solar panels generate more electricity than can be used by either your home or battery, the inverter will cut off power from the solar panels. Your system won’t send electricity into the grid until grid power is restored.

However, batteries don’t automatically work in a blackout

Even if you have solar panels and a battery, your home will still remain dark in a blackout unless you have a third component: a transfer switch.

With a modern home solar storage installation, this transfer switch works automatically, sensing when a power failure occurs and then switching your home over to an off-grid, solar-plus-battery mode until grid power is restored. This switchover normally takes just a few seconds, during which your lights will go dark until they flicker back on.

Home battery manufacturers have different names for this component. For example, the Tesla Backup Gateway sits between a utility meter and the Tesla Powerwall battery and automatically handles the switchover.

Here’s a great video from the channel Fully Charged that describes the workings of the Backup Gateway in detail:

Nerdy side note: the host in that video is Robert Llewellyn, who played Kryten in the British sci-fi comedy Red Dwarf.

Other battery manufacturers will have different systems, so be sure to ask your installer about this important component.

Critical loads: You don’t have to run your entire house on batteries

If your electricity usage isn’t that high, the simplest setup is to wire up the battery system to power your entire house. However, some appliances draw a lot of electric current and can rapidly drain even a large battery. A high-end “prosumer” electric oven, for example, can draw in the neighborhood of 10,000 watts. Cooking your Sunday roast with one of these would completely deplete even a Powerwall.

One solution is to buy more batteries, but the more economical approach is to decide which things in your house you want to be able to run on battery. The installer will then install a subpanel called a critical load panel. The electric circuits in your house that you decide are most important to keep powered in a blackout - such as the one that your refrigerator is on - will be moved to that panel.

You don’t have to install a critical load panel. The decision of whether to have one depends on what your main goal for having battery storage is. If it’s most important to be able to last as long as possible through a blackout, then a critical load panel is probably a good idea.

However, if you are getting a battery mainly to avoid peak time-of-use rates and backup power is a secondary consideration, you might skip getting a critical load panel even if you have large appliances like a central air conditioner. (Read more about power arbitrage and time-of-use rates below.)

Lithium-ion batteries dominate the home storage market

In the early days of solar electricity, when it was more of a hippie-in-a-cabin sort of thing, lead-acid was the go-to battery technology - and it still is for small off-grid applications such as recreational vehicles and boats.

Lead-acid batteries are the type used for golf carts, mobility scooters, and for the starter battery in cars. Lead-acid has the advantage of being a cheap and mature techology, but with significant disadvantages, especially weight and durability.

You can check out my article on powering an RV with solar panels for detailed information about the different types of lead-acid batteries and how to charge and maintain them, and also my article on charge controllers.

These days, the dominant technology for large-scale battery storage is lithium-ion. This is the same type of battery found in your laptop, smartphone, and newer electric vehicles such as Telsas.

Li-ion batteries normally cost more upfront than lead-acid, but they are less toxic, have higher energy density (ie. they can store more electricity), are physically more durable, can be deeply depleted without damage, and can withstand a greater number of charge-discharge cycles. In other words, they’re superior in almost every way, which is why they’ve taken over in markets such as electric vehicles and even utility-scale energy storage.

All of the batteries mentioned later in this article are li-ion.

Some nitty-gritty but important technical terms to know

A battery is an electrical device, so there’s a few terms that you’ll need to know to fully understand the product you’re buying. Here’s a gentle introduction to them.

Kilowatts and kilowatt-hours

If you’re reading the specifications for any home storage battery, there are two numbers that you should pay particular attention to: capacity and power output.

Capacity is expressed in kilowatt-hours, and is a measurement of how much electricity the battery can store. For example, the Tesla Powerwall has a usable capacity of 13.5 kWh, which means that it could run a 1,800 watt hair dryer continuously for 7.5 hours. You calculate that simply by dividing 13,500 watt-hours by 1,800 watts. (There are 1,000 watts in 1 kilowatt.)

The output is the amount of electricity the battery can supply at any point in time. That same Powerwall has a continuous output capacity of 5 kW, which is enough to run two hair dryers, but not quite three.

With these two numbers, you can start to understand how much battery capacity you’ll need to run your home from battery power. A solar installer can do this calculation for you, but if you want to estimate it yourself, you can start by doing an inventory of the major appliances in your home. The best way is to read the label on your appliances, but this chart will give you some approximate numbers.

Your battery might not be able to fire up your appliances (continuous versus startup power)

As you can see from that chart a lot of things in your house, such as LED lights and even televisions, don’t use very much electricity. Instead, the appliances that will quickly drain even a big battery are the ones with resistance coils for heating (such as space heaters or ovens), or things with motors: air conditioners, central heating, refrigerators, and clothes washers and dryers.

But there’s an important wrinkle when it comes to electric motors: starting current.

You might read the energy label for your air conditioner, compare it with the maximum output for your battery, and determine that you’ll be okay to run your A/C during a blackout. However, starting current - also known as inrush current - is a brief surge of electricity needed by an electric motor when it’s switched on. Once the motor is spinning at full speed, the appliance will draw the electric current its rated for.

This means that if your central A/C draws 5,000 watts when it’s running, a storage battery with a 5,000 watt output rating might not actually have enough juice to start it up.

How much electricity is needed to start a motorized appliance? Look on the label for locked rotor amps (LRA). Here’s an explanation of LRA and a way to calculate it if you don’t have the LRA rating.

If the LRA is higher than the maximum output of your battery, the appliance might not be able to run on that battery.

What to do about about starting current

If you want to be able to operate a large appliance like a pool pump or central air conditioner but a battery doesn’t have the output capacity to satisfy the starting current, don’t despair. There is a solution.

A device called a soft starter moderates the brief surge of electricity when a motor starts up. By spreading out the electric surge over a longer time, a soft starter can make it possible to operate an appliance that otherwise couldn’t be powered by a battery. Talk to your solar installer or electrician about getting one of these installed.

It’s worth nothing that the Enphase Ensemble battery has a soft starter component built into it, eliminating the need to install a separate device.

Price arbitrage: using a battery to avoid time-of-use charges

One of reasons why you might want to have a storage battery is what’s called price arbitrage. This is a fancy way of saying that you charge your battery when electricity is cheap to avoid using grid electricity when its expensive.

Many solar homeowners have a time-of-use (TOU) plan that causes the price of electricity to be low during off-peak hours (such as during the night) and expensive at peak hours. This is especially true in California, where it’s now mandatory for new home solar installations to have a TOU plan.

Peak hours (or even super-peak hours) occur when electricity demand is highest. This is usually the early evening on weekdays, typically from about 4 pm to 9 pm. This also happens to be the time of day when solar power generation starts to drop off, which means that if you have solar panels without a battery, you’ll probably be cooking your dinner at least partly with expensive peak-hour grid electricity.

How does a battery help in this situation? On a clear day, solar power generation is greatest for a couple hours on either side of noon. This period usually isn’t peak hours for utilities, and because the average homeowner is also often away at work or school during this time, their solar panels may be generating excess power that is sold into the grid.

If you have a battery, the homeowner can instead store that excess electricity. When early evening comes around and homeowners begin to return home, they start to use electricity. The walls of the building may have been baking in the sun all day, so if the home has A/C, it might be running continously. And because it’s now late in the day, solar panels are generating excess electricity just when peak rates kick in.

Fortunately, if your battery was recharging earlier in the day, it can now discharge that electricity to power your home. If you have enough capacity, the battery could allow you to keep your home powered without using grid electricity until after peak rates end.

If you have a big enough solar and battery system, you could avoid ever using grid electricity at all. But even with a smaller battery with only enough capacity to get you through the peak hours, the savings from price arbitrage might make possible for the battery to eventually pay for itself.

I wrote an article all about solar homes and time-of-use rates that goes into this topic in a lot more detail.

Smart home battery storage

Earlier we talked about the evolution of battery chemistry, and how lithium-ion is an improvement over lead-acid in nearly every way.

But battery chemistry isn’t the only thing that’s improved. The 12 volt battery in your car is just a dumb block of lead and sulphuric acid, but modern lithium-ion home storage batteries are much smarter. In most cases, you can monitor and control your battery from your smartphone.

Every manufacturer has their own software, but it’s common to have a choice of three automatic modes:

  • Self-consumption. In this mode, the battery will store as much of your excess solar electricity as possible, then use that stored energy at night to avoid using the grid as long as possible - up to the battery’s capacity. With the Tesla Powerwall software, you can even set a reserve level of electricity in case of a blackout. Or, if you don’t care about backup power, you can configure the Powerwall to let your home use all of the battery capacity and have it charge when the sun starts shining again.
  • Time-of-use (ie. arbitrage). If you have a time-of-use plan, this mode will configure the battery to charge and discharge according to utility peak hours, saving you money and also helping to provide the maximum environmental benefit from your solar panels. This is because peak-hour electricity also happens to be the dirtiest. So-called “peaker” power plants are powered by fossil fuels, and are often older equipment that is kept on standby. You can check out the non-profit WattTime to learn more about grid emissions intensity.
  • Backup-only. You would choose this if you have frequent power outages or have critical equipment - such as medical devices - that absolutely must be kept running. In this mode, the battery will only supply electricity to your home during a blackout. This will maximize the running time you get from your battery, but you won’t get the financial or environmental benefits that the other modes provide.

Shopping tip

If you’re thinking about getting a home battery, the quality of the software will have a big impact on the product experience. One way to research this is to visit the Google Play or Apple’s App Store and check out their reviews.

Tesla, in particular, is simply better at writing software than the other companies listed here due to the in-house skill they retain for autonomous driving and vehicle software. Their app, which is also the same app drivers use to manage their Tesla vehicle, gets a 4.3/5 on the Play store.

Sonnen’s software, used to manage the Sonnen Eco battery, does much worse: it gets only a 2.9 and also has many one-star reviews.

There are now several batteries on the market, from the relatively well-known Telsa Powerwall to lesser-known products such as the Sonnen Eco.


Special note about about the Sunrun Brightbox: it’s a rebranded version of the LG RESU. I’m not sure if the software is the same, but the LG software gets a pretty low rating, so this is something to keep in mind if you’re thinking of getting the Brightbox.

Here’s a quick rundown of the four most popular batteries in the US market:

Enphase Encharge

Usable capacity13.5 kWh
Output power 7 kW peak, 5 kW continuous
Warranty10 years
App rating4.0 out of 5

LG Chem RESU 7H / 10H

Usable capacity6.6 kWh / 9.3 kWh
Output power 5 kW peak, 3.5 kW continuous / 7 kW peak, 5 kW continuous
Warranty10 years
App rating2.6 out of 5

Sonnen Eco

Usable capacity5 to 20 kWh (in 2.5 kWh steps)
Output power3 to 8 kW
Warranty10 years
App rating2.9 out of 5

Telsa Powerwall

Usable capacity13.5 kWh
Output power 7 kW peak, 5 kW continuous
Warranty10 years
App rating4.3 out of 5

Prices aren’t listed because installation costs will vary, so ask your installer for a quote.

Bottom line: Should you get a home storage battery?

Despite the steady drop in prices for lithium-ion batteries, the cost still hasn’t quite reached the point where it makes financial sense for many solar homeowners to install a battery. A single Powerwall will cost approximately $7,000 to $8,000 to install, but many homes will need two (or even more).

Meanwhile, you can walk into your local big box home center and buy a natural gas-fired home generator with 20,000 watts of output for around $5,000.

Still, there are several reasons why a solar homeowner might decide to add battery storage in spite of a financial benefit:

Incentives can push the cost down.

The 26% federal tax credit can be applied to home battery storage, but only if the battery is charged exclusively from your solar panels. There are also state-level incentives in California, Massachusetts, and New York. Read my article on battery rebates to learn more.

You don’t want the inconvenience of a home generator.

While generators are cheaper upfront, they require maintenance and are noisy when running. Just like car engines, home generators need oil changes, and periodic spark plug and air filter replacements. Li-ion batteries, on the other hand, are dead silent and don’t require any maintenance at all. They also come with 10 year warranties, while home generators often come with only a 5 year warranty.

You have a time-of-use plan.

As described in the price arbitrage section above, it is possible for a battery to save you a little money every day by letting you avoid peak utility rates. Will it be enough for you to pay back the investment? There’s no general answer I can give, because it depends on your personal electricity usage patterns. If you tend to use a lot of peak-hour electricity and also generate enough excess solar power during the day, it could be a wise investment. To figure this out, you can work with your solar installer, or break out the spreadsheet and do the calculation yourself.

You really want to avoid fossil fuels.

Helping the environment is a big reason - if not the main reason - that many homeowners choose to go solar. If that’s the case for you, the financial payback might be less of a concern than knowing that a battery can help you reduce your carbon footprint. Even if you don’t have a time-of-use plan with your utility, you can make the general assumption that late afternoon and early evening is when power generators are working hardest, and fossil plants are often called into duty to generate more power. By using a battery to reduce your load on the grid during this time, you can lower your carbon footprint.

You’re really into tech.

Are you a nerd? I’m a nerd. Having a giant battery in your house that you can control from your phone, and being able to tweak the energy flow to and from the battery exactly according to your needs is just really cool. If you love tech, having a solar + battery system will give you lots of graphs and other nerdy things to obsess over.

Rebates and next steps

I wrote a separate article about state and utility rebates for batteries. Be sure to check it out, and then use the link below to be connected with local contractors who are qualified battery installers.

Save 26% or more on home solar with current incentives

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