Renewable Energy

Home Solar Found to be Great Energy Investment, But Batteries Reduce Return Rate

The energy produced over the lifetime of common rooftop solar panels exceeds the amount of energy it takes to make, mount and eventually recycle them. However, adding a home battery usually lowers that rate of return, according to new research from Stanford University.

Previous studies estimated that the energy output from solar panels to be approximately nine times the energy invested in them.

On the other hand, a new study published by the Royal Society of Chemistry’s Sustainable Energy & Fuels looked at the output from a standard rooftop system installed in five different U.S. states. The study found that the energy payout ratio ranges from a low of 14-times in Alaska to a high of 27-times in sunny Arizona, but only when homeowners can send surplus power to the grid. So, even in cold climates, (such as the image above courtesy of Chris Wingard), solar systems were found to be a very good energy investment.

Nevertheless, when homeowners install a battery and charge it with excess electricity before sending the surplus to the grid, the energy return on investment for the overall system was found to be 21% less than solar panels alone, researchers Simon Davidsson Kurland and Sally M. Benson found.

Energy Return Rate Contingent on Grid Outlet or Battery

When homeowners have solar panels, but no battery and no grid outlet, excess electricity is wasted. Then, the system’s return on invested energy drops to a low of 7-times in the state of Alaska and a high of 14-times in Florida, which is closer to earlier estimates. Because homeowners in that situation need to buy electricity during the evening, adding a standard lithium-ion home battery increases the energy payback.

“The overall high returns show the energy benefits of photovoltaics across a wide range of U.S. geographical regions and, presumably, elsewhere,” said Benson, co-director of Stanford’s Precourt Institute for Energy and professor of energy resources engineering. “But they also demonstrate that if a state encourages homeowners to invest in rooftop systems to reach clean energy goals, then letting excess power flow to the grid makes the most of those investments.”

Currently, photovoltaic panels are manufactured using energy primarily from fossil fuels. So, a 14- to 27-times payoff in renewable electricity bolsters policies that support solar power.

In a counterexample, the primary case against corn-based ethanol is that more energy goes into producing and delivering it than ethanol generates in a car.

While energy payoffs for U.S. residential solar power are clear, the financial return on investment is not. Virtually all states allow some selling of surplus electricity to utilities, but how much homeowners can sell and how much they get paid varies.

In most states, utilities pay consumers at the same rate that they pay when using the power. So, when the system is exporting surplus power to the grid, the customer’s meter reverses. In a handful of states, however, homeowners get paid based on the total of how much money their electricity saved the utility, which translates to a much lower price.

Grid Supply vs. Home Batteries

The addition of batteries to a home photovoltaic system reduces the energy payback of the entire system by 21% on average due to two factors. First, adding batteries translates to more energy use in the form of fossil fuels invested in making the entire system. Second, on average, the amount of electricity a battery discharges is 8% less than the amount of electricity needed to charge it, which is a loss compared to sending electricity directly to a larger electricity system with customers that can immediately use the power.

“As far as energy return on investment, it’s difficult to justify adding batteries to residential PV systems as long as excess generation can be made available for other users of the grid,” said Davidsson Kurland, who was a postdoctoral scholar at Stanford’s Global Climate & Energy Project when conducting this research. He is now a postdoctoral researcher at Chalmers University of Technology in Sweden.

Batteries Increase Energy Return When Selling Surplus to Grid Not an Option

Davidsson Kurland and Benson found that when selling excess energy to the grid was not a possibility, home batteries would, in theory, improve the return on the home system by 12% to 42% in the five states they studied.

In the study, the higher end of the range is for a climate like Washington’s, where early afternoons tend to have a lot of sunny weather but low residential electricity use, offering an opportunity for batteries. The lower end of the range is for Florida’s climate, where heat and humidity tend to drive people to use air conditioning systems more while the sun is shining even if nobody is home. In reality, consumers can sell surplus power back to the grid in Florida and – with limits – in Washington.

A Dilemma for Utilities

While being able to sell back surplus electricity to the grid at the same price that they pay is great for utility consumers and the environment, it can make the utilities financially unsustainable. In such a situation the utilities complain that they are being used as a free battery. Nevada, in particular, has grappled with this issue.

In 2016, the state of Nevada sharply reduced the rate utilities paid PV supply sellers, which caused a backlash. Two years later, the state raised the payout rate to 95% of the retail rate that consumers pay.

The current study concedes the dilemma. “As rooftop solar and large, photovoltaic power stations grow, electricity grids will not be able to accept more afternoon power, unless new uses of cheap afternoon electrons grow,” Benson said.

The study also emphasizes the need for new research and development to enhance the energy inputs, improve round-trip efficiency, and increase the life expectancy of batteries.

Stanford University
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