Batteries for Residential PV Solar Electric Systems? Do They Make Sense?

stock abstract:

Batteries on Solar PV on small scale do not currently make economic sense in terms of saving money.    This can change and there is a long way to go.    The current tax incentives can make a huge difference in the initial system cost though, with up to 65% discount due to tax credits or utility incentives.


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Engineering.com does their analysis based on the 10kWH Powerwall, which no longer exists, it was $3500.   The 7kWH Powerwall is $3000....so the pay backs are even less good, in fact there is no "pay back".

from the article
http://www.engineering.com/ElectronicsDesign/ElectronicsDesignArticles/ArticleID/10057/Teslas-Powerwall-by-the-Numbers.aspx

If a person spent $3500 on the Powerwall and another $1500 on the inverter, it would take ten years (simple payback) for the unit to pay for itself. Since it has a 10 year warranty (and so do most inverters), it’s a break even situation at best.

*In reality, completely draining the battery every day shortens its life. A battery under those conditions would lose about 30% of its initial capacity after 500 charge-discharge cycles - not even two years of daily use. (Good thing there’s a ten-year warranty!) At a friendlier 80% depth of discharge, a Li-ion battery will survive about 1900 cycles (about five years) before losing a significant amount of its capacity.
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This back of the envelope simplified analysis is using only material costs. 

• It ignores the project development, cost of sales and sales fees, permitting, local utility compliance devices testing and programming and probably a whole new meter socket or meter as well as disconnect.    
• It ignores "quick disconnect" combiner boxes at the rooftop to disconnect the DC flowing down to ground level and mitigate fire risk/fire fighter risk.    
• It ignores the rewiring necessary in the structure, the PV installers labor, overhead and profit and sometimes also an additional electrician with their labor, overhead, and profit, and of course the "balance of system" miscellaneous materials.
• It ignores the permitting process, drawings, plot plans, one line diagram, permit fee, permit compliance, and permit inspection, and now quite often witnesses electrical inspection and testing with a licensed journeyman electrician paid for by the owner to carrying out instructions as issue by the local utility standing there. 

So they are pretending that a system can be done for $5000 and has a 10 year payback, but the batteries will only last 5 years at reasonable depth of discharge.

But the reality is that the simplest of battery backup systems will add $15,000 to the cost of a PV system.   So at $5000 cost, there is no payback because you are replacing your batteries at 5 years.

So at $15,000 the "no pay back" is 3 times worse.

My estimates are that battery backup costs around $.40 per kWH just in battery replacement costs.    The average residential rate in USA is around $.13 per kWH.   

Wishful thinking does not get it done.  

I only sell these systems to people who want it for emergency backup power.   That requires smart inverters that are capable of making their own sine wave, and you best make sure it is a true sine wave, not a modified sine wave.     Because a modified sine wave may blow up some of your devices, or not allow them to function or decrease their service life.