Widespread power shut-offs across the Golden State during peak wildfire season have spurred demand for what’s called “solar-plus-storage” as a way for customers to keep their lights on.
“Calling it an ‘uptick’ would be an understatement,” said Barry Cinnamon, CEO of Cinnamon Energy Systems, a Silicon Valley-based solar company. Cinnamon said the level of inquiries has more than doubled and his company “had just about the best month ever” in its seven-year history.
“There’s a lot of people who said, ‘I’ve been hesitant to put in solar, and now, I want to put in solar and a battery, too.’ And there’s a lot of people who have existing systems, but now, they want to add a battery.”
California leads the nation in the number of rooftop solar installations, thanks to abundant sunshine and aggressive programs passed by state policymakers. But while solar panels can provide electricity when the grid is running, customers need battery storage systems to allow their residences to power themselves, at least for a time, when the lines are closed.
And that happened multiple times last month when investor-owned utilities deployed what is called “Public Safety Power Shutoffs” when high winds and weather conditions increase the risk of power equipment (such as fallen power lines) igniting a wildfire. Pacific Gas & Electric in recent weeks de-energized lines for more than 2 million people in its service territory in Northern and Central California.
For short-term outages, a single battery can power a typical home for about four to five hours without needing a recharge. For longer duration, multiple batteries can be employed.
While pairing solar installations with batteries can work smoothly, they come at a price.
A single battery unit typically costs between $7,000 to $9,000, after counting the federal government’s 30% tax credit for solar.
For a homeowner looking to install solar and batteries, Cinnamon said a robust system that includes installing an inverter that allows a solar system to act as its own “island” and operate when the grid is down can cost about $30,000 after federal tax incentives for a “medium-end” home that does not use much air conditioning or does not have a swimming pool (pool pumps use a lot of electricity).
Cinnamon said if the home has a solar installation, adding a battery system would come to about $21,000 after the tax credit.
The California Solar & Storage Association had lower estimates — from $15,000 to $22,000 for solar plus storage and $5,000 to $10,000 to add storage to solar, after tax credits and rebates from the state’s Self-Generation Incentive Program.
The most inexpensive option is simply going to a home improvement or hardware store and picking up a portable generator for $400 to $1,100.
They typically run on gasoline or diesel but can only power individual appliances, can be difficult to manage and can be loud and smelly.
Backup generators running on natural gas or propane can do an effective job, provided you remain connected by a fuel line. They run from $7,000 to $16,000, according to the association.
One of the nation’s largest makers of backup generators, Generac Holdings, has seen demand surge in the wake of PG&E’s wave of power shut-offs. In the past month, Generac’s stock price has risen from $76.83 to $92.90, a 20.9% increase.
“This caught us totally off guard,” Generac CEO Aaron Jagdfeld said recently on CNBC. “We didn’t see the largest utility in the U.S. coming out and saying, ‘Look, our only solution is to turn the power off.’”
PG&E chief executive, Bill Johnson said it could take a decade for his company to improve its electrical system sufficiently to significantly reduce the number of customer blackouts.
Solar panel company Sunrun out of San Francisco reported one-quarter of its California customers are opting to add batteries to their existing systems.
Solar-plus-storage can also save customers money as San Diego Gas & Electric and the state’s two other investor-owned utilities transition, via mandate from the California Public Utilities Commission, to time-of-use rates. Under time-of-use, customers pay more for electricity during the peak hours of 4 p.m. to 9 p.m. when the grid is under more stress.
An installation’s battery can absorb solar energy when time-of-use rates are low and sunshine is plentiful. Then, when the 4 p.m. to 9 p.m. period comes, the battery can be activated so the customer doesn’t have to use the high-priced electricity charged by the power company.
“When you run the economics on that, customers may be able to save $1,000 or more a year because they’re offsetting that really expensive afternoon and evening electricity,” Cinnamon said.
The solar-plus-storage movement figures to get another boost Jan. 1. That’s when a new rule passed by the California Energy Commission requires every new home constructed in the state be equipped with solar panels.
“The ability to produce power from your rooftop is going to be the home of the future and it’s not that much more difficult if you want to add on storage,” commission chair David Hochschild said.
But given the expense, there is concern people who can’t afford storage will buy polluting generators or not buy any power backup at all.
The utilities commission in September approved transferring $100 million from the Self-Generation Incentive Program that helps pay nearly all the costs for residential battery installation for low-income customers, vulnerable households and critical service facilities where the threat of fire is high.
The 30% federal solar tax credit steps down to 26% in 2020, then drops to 22% in 2021. In 2022, it is scheduled to go away completely for residential customers. For commercial solar installations, the credit will drop to 10% in 2022, where it is scheduled to remain.