Recouping Investment in Home Solar and Storage

A home solar system represents a significant investment as a typical solar photovoltaic panel systems today costs over $20,000 before the addition of a battery, which are becoming more common and can cost an additional $10,000. As a result, cost is consistently cited as the top barrier, even for higher-income households.

While solar and other renewable solutions may seem inaccessible at first glance, prospective customers have options and support:

Incentives from state and federal agencies have become especially prevalent in the wake of the passage of the Inflation Reduction Act and Bipartisan Infrastructure Law. There are a variety of tax incentives households can take advantage of for solar systems, including systems also paired with batteries. The tax credit for installation of new solar PV systems was recently increased from 26% to 30% as part of the newly passed IRA, for example.1

Financing is available for eligible households that may wish to utilize renewable energy in their home, but don’t want to face a sizable upfront charge. Most, if not all, major providers/distributors of panels offer financing plans spread out over several years for prospective households. Sunrun for example offers a $0 down monthly loan for households seeking to purchase and finance their panels.

Leasing panels and other equipment is another alternative to financing that households can utilize. Monthly lease plans are growing in popularity among households going solar, primarily since they can benefit from lower upfront costs. With warranty and rate hike protection incorporated into lease plans, users can feel confident that they will receive the benefits of solar while still retaining a level of affordability.

Earning money with net metering, which is a utility rate program where the utility purchases excess solar energy created by a given home’s panels. Net metering is beneficial because it shifts the energy load back to the grid while also rewarding customers for using less power than they generate. A net metered home’s meter will “spin backwards” (during the day) when the home is sending electricity back to the grid. During the day, as the meter spins backwards, the home’s utility will then apply the credit. At night, when the house’s panels are not creating electricity, the home can then take power from the grid, which spins the electric meter forward.

Once a billing period is concluded, the utility company will “net” how much a given net metered home sent to the grid versus how much it consumed, with the monthly bill being the difference between the amounts. Most utilities also allow credits to carry over from month to month, which is especially valuable to consumers in the summer months. During times when sunshine is abundant, households can accumulate credits to use in the darker, winter months.

Energy Monitoring and Energy Device Control

Software platforms are the key to controlling the array of connected lights, blinds, and solar panels, batteries, thermostats that help smart homeowners to optimize their energy use.

Home automation players like Brilliant, Savant, and Crestron have devices and features available to high-tech and high-end households.

• Savant's home energy modules are smart circuit breakers that track and control devices at the electric panel.
• Crestron's partner Adapt energy has solutions that optimize Sonnen home battery usage and collect weather data so that the system charges the battery in anticipation of blackouts from storms.
• SmartThings Energy leverages the wide array of devices connected to the platform, including Samsung smart appliances, and enables users to view real time energy use metrics.
• Alarm.com also shares critical energy information in the platform

Coming Soon: More Virtual Power Plants and Distributed Energy Resources

Virtual power plants (VPPs) and distributed energy resources (DERs) are other solutions that enable energy management on a smaller scale and serve as innovative ways to reduce stresses placed on the electrical grid while still meeting the energy needs of households. A key feature of VPPs is that they can accumulate energy capacity to resolve peaks in electricity demand, as well as being integrated into the grid.

VPPs can be assembled using assets connected to any part of the grid, whereas microgrids are usually restricted to a particular location, such as an island or a neighborhood. Additionally, while an individual VPP would not be adequate to service a large area, a VPP made up of many units (batteries for example) could function in the same way a large plant would.

Distributed energy resources (DERs) are small-scale electricity supply/demand resources that work in conjunction with the larger electrical grid. They are typically located close to load centers and can be used in isolation or as a larger, interconnected entity to bolster the grid. Virtual power plants and distributed energy resources are strategies gaining popularity as effective ways to leverage connected energy devices to reinforce the grid by giving utilities additional control and flexibility to manage electrical loads.

Check out this latest research we published in partnership with Alarm.com Energy, Security, Automation: Converging into Peace of Mind . Authored by Chris White , Research Director, Parks Associates .

Thanks for your support and reading our research work.