Battery-Ready Solar Systems

Tesla Motors recently announced their new battery storage system for homes and businesses, the Powerwall.

At a price point of roughly $8,000 AUD for a 7kWh lithium-ion battery pack, Tesla has introduced a very price-competitive product into the battery storage market. They’ve even included a ten year warranty on the Powerwall, which is a rare sight in the battery marketplace.

This is huge news for solar enthusiasts worldwide, but the announcement carries special weight for Australians in particular, who pay exorbitant prices for grid electricity.

Adding battery storage to a solar system means you can have your cake and eat it too – your solar system charges your batteries during the day, and then at night (when the sun has gone down) you draw electricity from your batteries instead of the grid, paying a very competitive market rate of 0 cents per kWh.

One problem, though, for those of you who started salivating at the thought of being able to break free from the grip of electricity companies: In their announcement, Tesla have indicated that the PowerWall won’t be available for sale in Australia until early 2016.

Similarly priced systems from other major companies (such as LG, Samsung and Bosch) are also expected around this timeframe.

This is an issue for those of you who are eager to cut their electricity company umbilical cord ASAP and not have to pay greedy power companies another cent.

So what’s the best way to join the battery storage revolution? A battery-ready solar system!

A battery-ready solar system is basically a traditional on-grid solar system, installed in such a way that it’s easy for an installer to attach batteries in the future and create a hybrid system.

Think of it as a way to future-proof your home for the coming battery storage golden age – people who already have solar systems can get their system upgraded to support batteries, but this may be a costly and time-consuming process if the system wasn’t initially designed and installed with battery storage in mind.

So, you have a lot of time and money to save by making sure that your system is battery-ready when it is installed.

I already have a regular solar system – can I add batteries?

Yes, you can – but it may be expensive if upgrades to your system are needed.

To make solar compatible with batteries, I’d suggest a system size of at least 5kW so you can generate enough electricity to actually charge your batteries in the winter, and when the weather is overcast.

If you currently have a system that’s under 5kW in size, you should consider adding more panels, unless you have a really efficient house and a really small battery pack. If you are adding panels, you may need to increase the size of the inverter to cope.

It is actually fine (and often a very smart move) to oversize your panel array to your inverter. More kW won’t harm the inverter (as long as the voltage and current specs are maintained – which your installer can confirm). Your installer can advise on whether your inverter needs to be upsized based on your local climate, your battery size, and your home’s energy usage.

As far as inverter compatibility is concerned, the only inverters (as of December 2015) that are 100% guaranteed to be compatible with the Powerwall are the Fronius Symo Hybrid inverter, and Solarbridge inverters.

Old, cheap inverters are not likely to ever be compatible with the powerwall.

But what’s the point of buying a system now? Wouldn’t it make sense to just put off buying solar until the batteries have hit the market and install both the system and the batteries in one go?

Ordinarily, yes. But there’s one crucial financial factor that comes into play here – the solar ‘rebate’. To cut a long story short, the amount of money you get as a ‘rebate’ when you purchase a solar system is dictated by pieces of paper, known as ‘STC’s’, that fluctuate in value according to supply and demand, just like shares do. STC’s are created whenever someone purchases a solar system.

So to put it simply, when not many Australians are buying solar, there is a high demand for STC’s but a low supply (because not many new systems – and STC’s – are being created), meaning that the price of an STC is high.

When there is high demand for solar (like early last year when the Abbott government launched its RET review and threatened to scrap the rebate), STC’s are being created at an increased rate and they flood the market, driving the price down.

Enough gobbledegook about STC’s! How does that affect the price I pay for a solar system?

I’ll use some simple numbers to illustrate my point:

As of the time of writing (June 2015), the current price of an STC is $39.85 (Click the link and look for the green box in the bottom right titled ‘Market Prices’). STC’s are capped by regulation at a price of $40 – so currently STC prices are (give or take 15 cents) the highest they will ever be.

In terms of monetary value, a $40 STC price translates roughly into a $700 ‘rebate’ for any new solar systems per kW installed (so a 3kW system will attract a $2,100 rebate).

But what happens if Tesla and the rest release their new battery storage systems all at the same time, and Australian demand for solar systems skyrockets (and the STC price falls as a result)?

Well, this has happened before – around two years ago the Aussie appetite for solar systems was nigh-insatiable, and the price of an STC dropped to under $20. This means that the ‘rebate’ per kW installed was halved – from $700 to under $350!

So a 3kW system would only attract $1,050 in ‘rebates’ with an STC price of $20, as opposed to $2,100 with an STC price of $40. If this scenario is repeated when the next generation of battery storage is unleashed onto the market, you’ll be missing out on thousands of dollars in ‘rebates’ by waiting to purchase a system.

In that case, I’d rather not leave thousands of dollars in savings up to chance. What do I need to know about purchasing a battery-ready solar system?

A few things:

I recommend getting a system at least 5kW in size so that you have enough generation capacity to charge your batteries, even in winter (when the sun is weaker).
Get a high-end central DC inverter from companies such as SMA, SolarEdge or Fronius. These are the most popular inverter brands, and are much more likely to be compatible with a battery storage system or be able to integrate with a battery-inverter. Make sure it has enough inputs to accommodate all your panel strings and a future battery.
If you have your heart set on a Powerwall specifically, then at the time of writing, the only way to definitely be compatible is to buy a ‘Fronius Symo Hybrid’ Inverter or a ‘Solar Edge’ inverter.
Use an installer that understands how to wire in batteries to a solar system, and specifically ask them to install it in a way that will make adding batteries easier (e.g. think about where the battery would go, and place the inverter near that spot etc.)
Consider asking your installer to change their standard warranty document to allow a third party to add batteries to your system without voiding their warranty – if your installer does a great job in the first place I don’t see why you’d want someone else to install the batteries for you, but this gives you options if you need them.
You will also need to ensure that the installer measures how much electricity your household uses when the sun is down, to ensure that you get quoted for enough battery storage to last you through the night and avoid having to draw (and pay for!) energy from the grid. The best way to do this is to get him to install a real-time energy monitor in your switchboard that logs your usage. This can generally be done for an extra $300 or so.
Tesla’s PowerWall has introduced a factor that wasn’t previously a concern for hybrid solar installations: Backup compatibility. Previously, all hybrid systems provided backup electricity in case the grid went down – but this naturally increased the price you paid for a system due to the cost of specialised equipment. According to Elon Musk the PowerWall is designed to allow hybrid systems without backup capability, meaning that the overall price you pay for the system could be a few thousand dollars cheaper. But if you’re hit by a blackout you’ll be left staring at your big fancy battery pack on the wall and wondering why you can’t just switch over to that. I’ve written a blog post explaining this in far greater detail.

Note: We are in no way affiliated with Tesla Motors. We do not sell solar systems, we simply put people in touch with local installers we trust. We do not sell Powerwalls. None of our clients sell Powerwalls (yet).

This article is is a response to the hundreds of emails that have come in asking the specific question: I’m about to buy solar – what steps can I take to make it easier to add a Powerwall in the future? I hope it answers that question!