Power to the People: Resilience via Residential Solar+Storage

As severe weather events continue to escalate both in terms of frequency and scale around the United States, power outages are becoming more common – and lasting longer. The U.S. Energy Information Administration reports that a typical U.S. resident experienced 16% more outages in 2022 compared to 2013, and it took 33% longer, on average, for utilities to restore lost power.

Many residential electric customers look to backup generators to power their homes during grid outages. However, conventional generators that require fossil fuels can be unreliable. Their use creates localized pollution, which carries adverse health impacts and can cause fatalities (due to carbon monoxide poisoning) when used improperly. Moreover, conventional generators churn out greenhouse gases (GHGs), contributing to climate change which can cause more frequent and severe weather events — and yet more power outages. Increasingly, customers are exploring cleaner options for powering their homes during disruptions, as well as the additional benefits these systems can provide. This is where combining solar PV and battery storage enters the equation.

The Smart Electric Power Alliance (SEPA) is supporting an ongoing Lawrence Berkeley National Laboratory (LBNL) initiative to investigate the use of residential solar+storage systems for home backup generation. At the RE+ 2024 conference in September – the largest energy conference in North America, attracting more than 40,000 attendees this year – SEPA organized a panel to explore this topic from four different angles:  (1) technical capabilities, addressed by Will Gorman of LBNL; (2) consumer and market perspectives, provided by Emily Walker, of EnergySage; (3) a government perspective, provided by Justin Galle, of the California Public Utilities Commission (CPUC); and (4) an installer/vendor perspective, provided by John Woodfield, of Sunrun.

Technical Potential

Will Gorman described LBNL’s technical analysis of the capability of behind-the-meter (BTM) solar+storage systems to provide home backup power for various levels of loads during long-duration outages in a selection of geographically diverse U.S. locations. He also explained LBNL’s new analysis of tradeoffs between the battery’s use for backup power versus bill savings – with a focus on the battery’s reserve level – in several locations and under different types of tariff structures. Notably, for a residential PV system paired with 10 kWh of battery storage during a three-day outage, LBNL’s analysis concluded:

• Solar+storage systems can easily provide full backup to limited critical loads excluding heating and cooling. Examples of such loads include refrigeration, lighting during evening hours, and basic plug loads (e.g., internet, computer, cell phone).
• Backup performance may be significantly lower if critical loads include heating and cooling, depending on the climate and the type of heating and cooling equipment used.
• Performance is lowest in regions of the country where inefficient electric resistance heating is common and in hot-weather climates where large cooling loads are common.

Average % of load served over summer and winter months (for typical homes) by a PV system paired with 10 kWh of battery storage, considering a 3-day power interruption

Source: LBNL

Increasingly, battery storage is being paired with distributed solar, largely due to supportive rate design and to customers’ growing concerns about resilience and prolonged outages. Fresh LBNL data reveals that 12% of all new U.S. residential solar PV installations and 8% of non-residential installations included battery storage in 2023. Hawaii had the highest residential attachment rate in 2023 (95%), with California’s attachment rate reaching 14% – and increasing quickly as the state transitions from net energy metering to a net-billing tariff, which incentivizes solar customers to co-install storage. (Nearly 60% of all residential PV systems installed under California’s new net-billing tariff are paired with battery storage). Attachment rates for most other states in 2023 ranged between 4% and 10%.

Consumer Motivations

Emily Walker, of EnergySage, explained that while residential customers’ interest in battery storage has been high for several years, this longstanding interest is now translating into actual deployment – including solar+storage installations – and EnergySage expects this trend to continue. Reinforcing LBNL’s findings regarding the vector of paired solar+storage installations, EnergySage’s market research found that U.S. residential attachment rates more than tripled from the first half of 2023 (10%) to the first half of 2024 (34%) for systems installed through the company’s platform.

As for consumer motivations, a recent EnergySage survey to gauge consumer interest in battery storage found that maintaining comfort during power outages was the primary reason residential survey participants chose to install battery storage. Other top responses, several of which also relate to backup power, include:

• A desire for energy/grid independence
• Financial savings/benefits
• The threat of increasingly severe storms
• The ability to use critical devices (e.g., medical devices) that require electricity
• Challenges experienced during previous prolonged outages

Walker added that some customers who experienced prolonged outages have suffered hefty financial losses that could have been avoided with battery storage. For example, during severe storms, battery storage can power a sump pump to prevent a basement from flooding.

State Support

Among U.S. states, California has long been a clean-energy trailblazer – and especially with respect to distributed solar and distributed battery storage. The state’s long-running, ratepayer-funded Self-Generation Incentive Program (SGIP) provides incentives for BTM distributed generation and energy storage that meets all or some of a customer’s electricity needs. Justin Galle, of the CPUC, noted that SGIP has provided more than $2.3 billion in incentives, contributing to 1.5 GW of capacity, installed across more than 52,000 residential and non-residential projects, with battery storage accounting for half the capacity. (Residential battery storage capacity supported by SGIP from 2018 through 2023 totals 364 MW / 914 MWh.)

Galle described how SGIP has evolved since its launch in 2001, with program goals expanding from peak-load reduction to include GHG reductions, bill savings, and resilience. During summer weekdays, battery systems installed under SGIP are primarily used for self-consumption (70% of systems) and time-of-use (TOU) rate arbitrage (26% of systems). Importantly, he explained that value is being left on the table, which could be captured by optimizing storage dispatch (e.g., dispatching storage to optimize for utility avoided costs vs. actual dispatch, optimizing for GHG emissions reduction, or customer bill savings).

The CPUC is proactively pondering how SGIP might evolve in the future, bearing in mind the unique (i.e., among distributed energy resources) benefits that battery storage contributes, including site-specific resilience, as well as the appropriate role of state government in a rapidly shifting market.) Primary considerations include:

• How should California – or any jurisdiction – support BTM residential storage?
• Should socialized costs (via utility customers and/or state budgets) support privatized benefits (e.g., customer bill savings, resilience)?
• Are point-of-installation incentives paired with strict program rules the best mechanism for achieving “optimal” dispatch?

Surging Market Growth

John Woodfield, of Sunrun, a leading U.S. installer of distributed solar and battery storage, also discussed the rapid growth of solar+storage installations. Earlier in 2024, Sunrun eclipsed 1 million residential solar installations, with 116,000 solar+storage systems. Significantly, in just one year – spanning Q2 2023 to Q2 2024 – Sunrun’s attachment rate for new installations tripled, from 18% to 54%. (Notably, all new solar PV systems installed by Sunrun in Puerto Rico are paired with battery storage, due to chronic outages in the U.S. territory.)

Woodfield offered several explanations (from “the field”) for the market surge in residential solar+storage. First, considering mounting threats posed by regional wildfires, severe weather events and grid instability, customers are seeking the peace of mind that backup generation provides. Second, certain states are approving new utility rates that are designed to encourage battery storage. California – historically a state leader in deployed distributed solar and distributed battery storage – has done so via its aforementioned net-billing tariff, and Illinois is planning a storage-friendly rate transition in 2025. Third, some states are establishing programs that support battery storage programs. And fourth, several states, such as California, Colorado, Connecticut, Massachusetts, Texas, and Vermont, are creating or authorizing virtual power plants (VPPs). (SEPA partner N.C. Clean Energy Technology Center recently published a helpful roundup of how states are supporting VPPs.)

Problem-Solving and Future Planning

There was general consensus among panelists that because solar+storage systems are more complex than stand-alone systems, it is more difficult for customers to understand the uses and benefits of these systems, including how they can or should be optimized – and trickier for installers, utilities, and government agencies to explain. Thoughtful and effective customer education is, therefore, critical. Education should be as clear as possible and, ideally, tailored to different customer segments.

Panelists generally agreed that policy support, expanding consumer interest in resilience and distributed clean energy, and a clearer understanding (among customers) of the benefits of solar+storage systems will help drive residential deployment of paired systems further forward. Innovative thinking will be needed to sort out how to allocate the benefits of solar+storage and stand-alone battery storage to residents (including renters) of multi-family housing units. Furthermore, planning for the future includes designing (or reconfiguring) programs and rates that embrace or accommodate dynamic grid conditions.

Correctly sizing battery storage is important to ensuring that a system is both economic and capable of navigating typical outages, panelists asserted. However, utilities, installers, and customers must consider the ongoing growth of home electrification and EV charging (as well as potential policy and rate evolution), how such changes would impact an existing individual system’s performance, and whether resizing the system is necessary and/or beneficial.

Learning More

To learn more about LBNL’s work addressing the use of solar+storage for backup generation, contact Galen Barbose. To get involved in SEPA’s work in this area and related areas, consider joining SEPA’s Customer Programs Working Group, Energy Storage Working Group, and/or Microgrids Working Group. (Participation is limited to SEPA members.)