The Blackout Dilemma
I have been living in my house that came with a solar panel system for about a year, and we recently got a True Up bill from PG&E for about $2,700. I understand we are grandfathered into the NEM2 situation, but I couldn’t help but wonder: is there a reason the bill is this big, or is there something I can do to avoid it? After all, $2,700 is about the cost of power for an entire year. Does it make more sense financially to disconnect my solar power system?
What on earth was happening? I had to get to the bottom of this.
The Great California Blackout
As if the COVID-19 pandemic wasn’t enough to deal with, us Californians had another crisis to contend with this year – fire season. When PG&E, the utility that serves the northern two-thirds of the state, first announced in October 2019 that it would be implementing intentional blackouts across its coverage area as a stopgap against the annual threat of wildfires, the conversation in my household was likely one that was echoed throughout California: “If that’s how it’s going to be, we’re moving,” my wife insisted, with a dead seriousness in her tone that I knew meant I should stifle my instinct to laugh.
Sure enough, PG&E made good on its promise. Our house sat without power for four days, and we were lucky. Others around the state were powerless for more than a week, with some 3 million people ultimately affected. Of course, California’s not the only place where power is janky – storms knock out the power in the Northeast regularly, and Hurricane Katrina in 2005 left many customers without power for weeks. PG&E later said that this year’s blackouts will be “smarter, smaller, and shorter.” So far, that’s been true, though about 87,000 people had their power cut in September, and 100,000 were shut down in October. PG&E has estimated that these cuts could be common in the fall months for another 10 years – and all of that was before COVID-19 changed everything.
As such, our conversation last winter quickly turned from hand-wringing to solution-seeking. “No one really wanted to move,” I recalled, “which took us to plan B. If PG&E cuts the power, why don’t we just make our own?”
Harnessing the Power of the Sun
The obvious solution was to consider solar panels. After all, prices have come down, and efficiency has gone up, and it made good financial sense to consider solar even when the state wasn’t constantly on fire. But when I started looking into it, I quickly discovered that solar wouldn’t help in a blackout. Solar panels paradoxically don’t operate if PG&E is offline. Why? Because when lines are shut down, it’s for safety reasons to stop current from flowing through them. One of the big draws of home solar is that you can sell extra electricity back to the grid, and if solar homes are sending their excess current back through the transmission wires, well, you see the problem.
Fortunately, there’s a workaround to this, and that’s to install a backup battery. Your solar system charges a fat battery in your garage, and if PG&E goes offline, you can draw current directly from the battery. Your solar panels can even keep recharging it while you’re using it. Not only that, but batteries solve one of the big problems of solar by giving you the ability to produce your own power at night. Rather than having to draw from the grid when it’s dark out, you can pull electricity from the battery, then top it back up the next day when the sun’s out.
They call this energy resilience – weaning your home from reliance on the grid. Before I knew it, my wife and I were having a real conversation about whether the investment in solar and battery backup would be worth it. Not only would we survive days of blackouts more easily, we would reduce our power bills the rest of the year. The typical payback period for hybrid solar-and-battery systems is usually pegged at about seven to 10 years, depending on numerous variables – which sounded reasonable to us.
Diving into the Solar-Battery Solution
By Adrienne So, By Simon Hill, By Julian Chokkattu, By Christopher Solomon
Soon, I was speaking to my bank about a home equity line of credit – marking the first time in my career that I’ve taken out a loan in order to write an article. I reached out to Electriq Power, better-known Tesla didn’t return my calls, and the San Leandro, California company said it was game to collaborate on a piece. Its PowerPod hardware includes both a cabinet of lithium-ion batteries and an inverter, the piece of equipment that converts DC power from the solar panels or the battery and converts it into AC power that you can use at home or sell back to the grid.
Electriq doesn’t do the solar panels or the installation, so it connected me with Symmetric Energy, a San Rafael, California installer that could manage the job. The vast majority of my dealings over the months that followed would be with Symmetric, and that makes sense. Most homeowners installing solar or battery power won’t ever need to talk to the manufacturer of the hardware.
Solar panels are surprisingly cheap. A single Silfab SIL-320 maxes out at 320 watts and costs only about $250. We installed 20 of these, and Symmetric mapped out where the panels should be positioned to maximize energy production by taking into account the home’s location, the direction the panels are facing, and tree cover. At maximum power, the panels could theoretically produce 64 kilowatts at any moment in time. On a long and sunny summer day, I could expect to see 30 to 35 kWh of energy produced. Leftover energy would either go first to recharge the battery or second back to the grid.
But batteries are expensive. At $10,000 to $12,000 for a 5.5 kW / 13.4 kWh battery and inverter, adding a battery to a solar installation will roughly double your hardware cost. You’ll also need to budget for mounting racks, permits, and all the other arcane line items that go into any big electrical job. Electrical work was separate in my installation and it was not cheap, comprising more than a quarter of the final bill, which was about $30,000 in total.
And what a big job it was. I signed my contract at the end of December, but installation and inspections weren’t completed until April. And thanks to a nightmare of bureaucracy plus COVID-19 insanity, final permission to engage in net energy metering – the formal ability to sell excess power back to the grid – wasn’t received until the end of September. The good news was that my equipment was at least operational for the summer when solar production is obviously at its highest, and even though I wasn’t able to sell excess juice back to PG&E, it didn’t really matter much.
The Economics of Home-Produced Energy
Selling excess power is only part of what makes the economics of home-produced energy work, and it turns out it’s not a very big part. PG&E sells you power at retail rates, 30 to 40 cents per kWh, but buys it back at wholesale rates, 2 to 3 cents per kWh. So, it’s really not in your financial best interest to overproduce energy. If I sold the entirety of the best day’s production of my home’s solar energy back to PG&E, I wouldn’t even earn a dollar.
A much bigger incentive, however, is the fact that the government will pay you to install this stuff. There are two major rebates: First is a federal investment tax credit, and while it once involved a complicated system of rebates, it was recently overhauled. Install solar with or without a battery, and you get a fat credit on next year’s income taxes. Last year, the credit was 30 percent of the total installation cost. This year, it’s 26 percent. Next year, it goes down to 22 percent. After that, the credit goes away completely, unless Congress acts before then. It’s a simple credit – a single form that you file with your tax return – but we won’t see that value until 2021.
The second rebate is from California’s Self-Generation Incentive Program (SGIP). This program is administered by PG&E, and it is really built to encourage energy storage instead of simple production, which for most homes means a battery. The rationale behind SGIP is that there is so much solar power in California that the state can’t use it all. On especially sunny days, PG&E actually has to pay other states to take excess power so as not to overload the grid. But when the sun goes down, the situation changes dramatically. Without all that solar, gas-powered peaker plants have to be fired up and run until demand dies down, which is why most PG&E rate plans charge you more for electricity use in the evening. The upshot? PG&E will subsidize your battery to avoid those off-hour energy production costs. The SGIP rebate is $250 per kWh of storage – $3,350 for my installation – and it’s cash back. The catch? The SGIP, which is outlined in a 139-page handbook, is so complex that your installer has to file all the paperwork for you. The process, I’m told, will take up to a year before I see a check. At press time, I’m still waiting.
Pros and Cons of Solar-Battery Systems
Aside from the up-front costs, which merit serious analysis before you jump into this process, what are the other downsides of installing a hybrid solar-and-battery solution? So far, I’ve found more than a few, and I’ll explain.
During the research phase, I received a detailed, personalized analysis that estimated my average electric bill would drop from $223 to $22 a month. Though my May 2020 bill was just $86, down 54 percent versus the prior year, and my October 2020 bill, which was the first to include net energy metering, was $78, down 60 percent, some of my bills during the hotter months were higher than in 2019. Of course, everyone working and schooling at home has caused us to use more energy this year. That said, I’m definitely not seeing a $22 electric bill, and really don’t expect to get one. If my net savings going forward hold at 60 percent – a very optimistic number – it pushes my expected payback period out considerably, from breaking even in nine years to breaking even in about 17 years. This is a biggie.
You’ll also have to pick and choose which circuits your battery can provide power to, both after hours and during a blackout. The main reason for this is an amperage limit. My inverter can handle only 23 amps of draw, and our refrigerator alone pulls 5 amps. We ended up having to install a second electrical panel – the “critical load panel” – which has just eight circuits out of the 40 from the main panel connected to it. After hours, these circuits, and only these circuits, run off the battery. The rest of the circuits in the house have to draw from the grid, and in an outage, they go totally dark. The good news is that I could pick the eight circuits I wanted to back up, though one of them had to supply the inverter’s electronics, leaving just seven to play with. This wasn’t too difficult. Most homeowners choose to back up circuits that power their refrigerator, wireless router, garage door openers, and a smattering of lights and small appliances, and that’s what we did. In a blackout, the circuits I picked would still provide a comfortable living situation. The major home conveniences that the system doesn’t back up are the air conditioner, ovens, washing machine, and dishwasher. Our water heater and furnace are powered by natural gas.
In the summertime, there’s so much sun that my battery is usually recharged before noon. As of November, there’s so little sun that it takes most of the daylight hours to recharge, and on cloudy days, it often doesn’t recharge fully at all. Instead of the 35 kWh I produced on June 25, I’m now producing about 11 kWh per day. That means more reliance on the grid and, of course, higher energy costs.
The Electriq power management app and website dashboard are sexy, with all their charts and graphs – some of which I’m including here. On most days, I see a big rush of solar production and a spike of grid export in the afternoon, with my battery kicking in after hours. From the looks of these graphs, I’m not using any power from the grid at all. But the app doesn’t tell the whole story. The catch is that it measures power usage to just the critical load panel and not the other 32 circuits in the house, which include the air conditioner and a number of other major electricity suckers. The usage here is dramatically higher than those circuits on the critical load panel, which is why PG&E’s data paints a much different picture of my energy usage. For example, on October 7, my Electriq dashboard says my home consumed 86 kWh and provided a net 16 kWh to the grid, but PG&E’s data says I imported 13 kWh from the grid that day. I’ve never gotten a clear answer on why the system doesn’t measure your entire home’s energy usage, other than that just isn’t how it’s designed.
All the California fires dropped a ton of ash on my panels, which decreased their output noticeably. I hosed them down the best I could, but I’m told professional cleaning is recommended about once a year at a price of about $200 – which further eats into your payback. The batteries require cooling fans that run at a healthy clip when the system is recharging. During the middle of a sunny day, the sound is equivalent to a small motor running. During the original planning, there was considerable discussion about where to place the system, but I never took noise into account. Fortunately, the system ended up in the garage, which is common, so sound is not really an issue most of the time.
Our first outage came randomly in the middle of a summer afternoon. I didn’t even notice the power had gone out because the battery kicked in so quickly. There’s about a one-second delay, which made my cable modem reboot, but otherwise, the system fires up immediately. The battery had been topped up already and was at 100 percent when the outage hit, so it was no problem to keep our critical circuits running for the hour that the power was out.
The second time the power went out was again unexpectedly, at around 5 in the morning, and since the battery had been set to provide power when the sun was down, it was already down to its 20 percent minimum reserve when the electricity died. With no juice left, the entire house was quickly plunged into the dark for hours until there was enough sunlight to start topping the battery back up. If I’d known an outage was coming, I would have switched the battery mode from “self-supply” to “backup,” which keeps it topped up at 100 percent to maximize availability in the event of an outage, though you’ll draw power from the grid overnight. If outages frequently hit your area at random, you’ll probably want to raise that 20 percent minimum threshold in order to hedge.
For what it’s worth, PG&E has yet to intentionally shut off our power this year.
Solar panels and batteries both degrade over time, but more slowly than you might think. My panels are warranted for 30 years, with a guarantee to produce at least 80.3 percent of today’s power at that time. In other words, in 2050, the system should still be able to produce 28 kWh or so in a day. The inverter and batteries are both warranted for 10 years, and the batteries are guaranteed to hold 60 percent of today’s charge by that time. That tends to vary a lot based on usage and temperature. Electriq says it’s more likely they’ll be at around 80 percent of their maximum capacity come 2030.
Since installing the system, I’ve often been asked if I’m happy with it. The answer is yes, albeit very hesitantly. To be blunt, the savings just haven’t materialized as I’d expected, and a 17-year payback period is not terribly attractive. The peace of mind the battery backup provides is hard to put a value on, but since we haven’t really needed it this year, right now it’s working mainly as an insurance policy. That said, fire season isn’t over, and we’re looking at a decade of potential shutoffs, so it’s comforting to know that I’ll be able to keep working and that our food won’t spoil when outages happen. The system also does significantly improve the value of our home, should we decide to sell, though that’s ephemeral for now.
COVID-19 sheltering rules also improve the calculus by making our home more self-sufficient. During last year’s outages, my family would trek into San Francisco, where the power was never shut off, to juice up at Starbucks or a library, grab dinner, and maybe see a movie before trekking home to the dark. None of that’s really possible these days, and if we’re stuck in the house for the long haul, the investment in our new electrical lifeline is even more compelling.
In the end, despite the hiccups and the higher-than-expected costs, I’m glad we made the switch to solar and batteries. Sure, the payback period is longer than I’d hoped, but the peace of mind and the environmental benefits make it a worthwhile investment. And who knows – maybe I’ll even save a few bucks on my electric bills along the way.
If you’re in a similar situation, I’d encourage you to explore the <a href=’https://solarasystemsinc.com’ target=’_blank’ rel=’noopener
