Comparing Costs: Solar Power Storage

Which option will save you more: batteries or generators?

January 17th, 2020
By Diana Vu 

If you want the comfort of knowing your home won’t be without power when an outage unexpectedly strikes or if the grid goes down, adding power storage to your system is a no-brainer.  Interest in storage is becoming a more common topic in solar sales conversations, and analysts predict that one in five of all solar systems installed in 2020 will be paired with storage.

Backup Power Options

Drastic weather, unexpected outages, and blackouts are likely the main factors driving the interest in backup systems, not only in CA but all over the US.  The two most common ways to store power for residential solar owners are by installing generators and batteries. Though it makes economical and environmental sense to connect your solar power system to the electrical grid, deciding if a battery or a generator-based backup system can be tricky and confusing. Many homeowners find themselves unsure of which backup option to choose.

A home generator is a stand-alone unit placed outside of the home. Most can be mobile and relocated. It is powered by a natural gas line and connected to the grid. A home battery is a rechargeable storage unit. It can be charged through the grid or with solar power or wind.  Both automatically turn on within seconds if a power outage occurs. 

Currently, Solar Negotiators recommends that homeowners opt for a generator. In addition to the affordability factor, batteries are limited in providing users with enough financial benefits to support the investment.

Check out our CEO’s thoughts on the cost-effectiveness of batteries.

 

Benefits of Backup Power

Though the upfront costs of backup power are high, costs are a one-time equipment and installation fee in most cases. It is key that consumers know these products will serve as a convenience rather than an investment to future savings. Particularly with batteries, the product/installation costs will likely never be paid off due to energy-related savings. The main goal when purchasing these products is to protect critical loads and minimize the impact of day-to-day functions in the event of a power outage.

Many homeowners don’t know or have not realized that a battery could potentially cut some of their electric bills. Some utilities have TOU (time-of-use) electric rates that throughout the day. This means a battery could result in lower electric bills by providing an alternative source of electricity when rates are high.

 

A Closer Look at Costs

 

Installation Costs When considering adding battery storage, people don’t often factor how high the cost of installation can be. This isn’t something companies normally advertise with the price of the product and can be misleading to homeowners in need of backup power.  Meanwhile, the price of installation for generators isn’t cheap, “Most homeowners pay between $1,255 and $6,899 to install a generator in their home.  While the project can cost as little as $400 and as much as $9,500, the average installation price including all variables is $4,077” (homeadvisor.com).

Battery Backup Cost Solar batteries range from $5,000 to $7,000 and from $400 per kilowatt-hour (kWh) to $750/kWh.  Installation fees include electrical upgrades, taxes, permit fees, or connection charges and can range anywhere from $5,000-$8,000.00.  This put the total cost of a back-up battery system at around $10k-$15k on average. That is more than twice the average cost of generators.

Solar Generator Backup Cost Depending on your needs, you can purchase a generator for as low as $500. However, these aren’t meant to provide power to your entire home in the event of an outage. Smaller,  briefcase-style generators, around the 15-watt range, will power small devices like cell phones and laptops.  Additionally, for $2,000 to $4,000 you can buy a larger solar generator designed to provide backup power for your home. A larger generator fit to protect critical loads and power several home appliances (more than 20kW) can cost up to $6,000. Most have 1,800 to 3,000 watts, and some offer as many as 245 amp-hours.

Size/power load for backup power options

Once you’re in the process of comparing your backup power options, think about what you need to keep running. 

If lights are your main concern during a power outage, batteries will do the job. Homeowners who opt for batteries are comfortable knowing that “critical loads” such as appliances, outlets, and lights will be powered in the event of a power outage.

On the flip-side, If you install a generator, critical loads will not be of concern. If it is sized properly, your home or business will continue running without issue if fuel is available. 

 

In a nutshell, if you need reliable power for a long period of time and are on a budget: opt for a generator. It is the most cost-effective option and is easier to implement. If budget is not a concern and you are seeking to protect critical loads like your refrigerator, laundry, dishwasher, etc. in the event of a power outage.