Batteries Included: Transforming Homes into Resilient Power Hubs

I’m fortunate to live in an area of the United States where I’ve rarely worried about power outages beyond an occasional, harmless blip – until recently, that is. After enduring rolling blackouts during a severe cold snap (Winter Storm Elliott) in December 2022 and a multi-day outage arising from violent thunderstorms last August, I now pay serious attention to reliability and backup power. Of course, much of the rest of the country was already in this boat, and the boat seems to grow larger each season.

There are, well, a boatload of reasons why interest in grid reliability and backup power is attracting more attention nationally. In addition to cold snaps and summer storms, power outages have sprung from winter storms, hurricanes, wildfires, vandalism and terrorism, and preventative power shut-offs by utilities. Some of these menaces have become more frequent and more extreme. Others have emerged as new threats – and realities – in areas where they didn’t previously occur, or only occurred very rarely.

Traditionally, onsite backup generators have been powered by fossil fuels. But this is changing. Thanks to mounting interest in decarbonization, robust financial incentives (including tax incentives available under the federal Inflation Reduction Act), technology advances, new market opportunities and industry leadership, behind-the-meter (BTM) solar and battery storage systems are becoming a viable alternative. During an outage, these systems can power critical loads or provide whole building back-up for homes and non-residential buildings.

SEPA published a blog in 2022 describing the use of on-site solar+storage systems for backup generation, with a focus on research findings from Lawrence Berkeley National Lab (LBNL), and SEPA’s own market research and emerging industry opportunities. Now, in a new study, LBNL analyzes how the potential for BTM solar+storage to provide backup power during long-duration outages will evolve as homes become more efficient, flexible, and electrified. (Both LBNL studies address the technical potential – not the economic potential – of these systems to provide home backup power during outages exceeding one day.) The latest LBNL study focuses primarily on scenarios where backup is provided to heating and cooling loads, which tend to account for some of the largest residential loads. Major findings include:

• Building efficiency and load flexibility measures can significantly reduce – by more than half, in some locations – required battery sizing. In general, these measures especially reduced required battery sizing needs for homes in hot locations and homes in cold-winter locations with electric heat.
• Heat pump retrofits can either increase or reduce required battery sizing, depending on climate and existing heating and cooling equipment. For example, efficient heat pumps can significantly reduce battery sizing when replacing inefficient AC units in hot climates or when replacing electric-resistance heating in cold-winter climates.
• Other building electrification measures analyzed have relatively small impacts on battery sizing. These include heat-pump water heaters, induction ranges, electric ovens, and heat-pump dryers. (The report doesn’t consider backup power to EVs, but it does discuss the role of bi-directional EV chargers as a potential enabling technology for solar+storage backup power.)
• Efficiency, load flexibility and (in mild winter climates) heat pumps significantly expand the “addressable market” for solar+storage backup power. Through a combination of thermostat set-point adjustments, building envelope efficiency upgrades and (in mild winter climates) heat pump retrofits, the addressable market rises to 60% of U.S. homes in all regions analyzed. This represents the percentage of homes that could withstand a three-day power interruption with a PV system plus a 30-kWh battery.

What’s happening on the ground

With respect to the actual deployment of BTM solar+storage systems that can provide home backup generation, progress and innovation have been driven primarily by major solar+storage companies, such as Sunrun, in certain states. Policy frameworks heavily influence markets and customer demand, and these frameworks vary significantly from state to state, and even from utility to utility within a state.

Prospects for BTM solar+storage are sunny. Consider these nuggets of U.S. market intel, published in LBNL’s 2023 Tracking the Sun report:

• Increasingly, residential electric customers are installing battery storage along with PV. In 2022, 10% of all new residential PV systems included battery storage. Hawaii had the highest residential attachment rate (96%), with California a distant second (11%), and many other states falling within the 5% to 10% range.
• Storage retrofits onto existing PV systems represented 23% of all new storage installs paired with PV in 2022.
• The U.S. market has been trending toward systems with larger batteries, driven by backup power demand. Of paired systems installed in 2022, 35% included at least 10 kW of battery storage.

Utilities are taking notice, with many launching customer programs that focus on BTM battery storage. Significantly, utilities increasingly view customer programs as a pathway to help themselves and their customers decarbonize, while also boosting resilience and enhancing grid flexibility. In addition, some utilities are strongly motivated to expand carbon-free and resilience options to their customers, recognizing that if they don’t offer attractive programs, then their customers may look elsewhere for them – effectively turning an opportunity into a threat. Utilities are also keen on tapping customer-sited batteries to provide broader grid services and benefits.

Examples of utility programs that offer incentives for BTM residential battery storage that’s commonly paired with PV – and which allow the customer’s system to provide backup generation, when needed – include:

Green Mountain Power’s Bring Your Own Device (BYOD) program in Vermont offers residential customers up to $10,500 to buy a battery system that GMP may access and discharge to benefit the grid. Participants choose a qualifying battery, an installer, and the amount of energy they’d like to enroll. GMP will “make adjustments when possible to avoid completely discharging a battery for the purpose of achieving grid benefits during or prior to a pending weather event that could create outages.”

Rocky Mountain Power’s Wattsmart Battery program in Utah offers an upfront incentive and annual bill credits to customers (including residential customers) who install approved BTM battery systems. In return, RMP manages and dispatches participants’ batteries for grid support. RMP does not discharge batteries below 10%, so that participants may use their batteries during outages. Customers with paired solar+systems – including existing PV systems – are welcome to participate.

Hawaiian Electric’s Battery Bonus program offers an upfront cash incentive and monthly bill credits to customers (including residential customers) on Oahu and Maui who add battery storage to an existing or new rooftop PV system. Participants must use and/or export electricity from the battery at a committed kW amount for a duration of two consecutive evening hours set by Hawaiian Electric daily, including weekends and holidays, for a 10-year period. During a grid outage, participants may use all stored electricity for their own needs. Battery Bonus was fully subscribed in December 2023 and will be replaced by a new grid services incentive program – deemed Bring Your Own Device (sound familiar?) – beginning in March 2024.

The federal government is also getting in on the act. As part of a $1 billion federal initiative to improve energy resilience in Puerto Rico, the U.S. Department of Energy is providing up to $440 million to install rooftop solar and battery storage at homes in highly vulnerable communities. These systems will be designed to lower electric bills, improve household energy resilience, and provide backup generation during extreme weather for up to 40,000 single-family households that either: (1) are located in areas with a high portion of very low-income households, and experience frequent and prolonged power outages; or (2) include a resident with an energy-dependent disability. These systems will be installed beginning in spring 2024 by Generac, Sunnova, and Sunrun (pending award negotiations).

What’s next?

LBNL’s new report, Solar+Storage for Household Back-up Power: Implications of building efficiency, load flexibility, and electrification for backup during long-duration power interruptions, is the second in a series of studies, developed in collaboration with the National Renewable Energy Laboratory (NREL), to analyze the use of solar+storage systems for backup power.

LBNL continues to conduct work in this area, with plans over the coming year to explore the tradeoffs customers face between reserving their storage capacity for backup power applications and other uses, such as utility bill savings. Through that work and other recent studies, the team has extended its analysis to consider not only long-duration power interruptions, but also the shorter, but more frequent and unpredictable power interruptions customers often face. To learn more about LBNL’s future work or to offer input into research design, contact Galen Barbose.

SEPA recently launched the 5×25 Initiative, a coordinated effort to focus on five important areas by 2025 to align utilities, industry, regulators, legislators, customers, and other energy stakeholders toward a carbon-free energy future. SEPA believes that solving the challenges around these five areas – which include both energy storage and resilience – can drive industry progress toward shared climate goals. SEPA also operates topic-specific industry working groups that offer opportunities to meet, learn from, and work with peers. (Participation is limited to SEPA members.) If you’re interested in utility programs, battery storage or resilience, we invite you to join SEPA’s Customer Programs Working Group, Energy Storage Working Group, and Microgrids Working Group.