How You Can Lower Your Energy Costs With a Home Battery
Backup generators used to be the ideal option for keeping the lights on during power outages. That was until home batteries became a cleaner alternative, but these systems can do much more than just power your home in an emergency.
Home batteries can reduce energy costs and store additional energy from a solar panel system so it can be used later. The reasons why someone might decide to purchase a battery are evenly distributed. According to a recent study, 33% of homeowners who purchase a home battery do so with savings on utility bills in mind. Meanwhile, 29% want to rely less on the grid, and 28% want backup power during outages.
But don’t feel like you have to just pick one reason to buy a home battery. Early home battery models were designed primarily for backup power and had very little room for additional features. But home battery technology has come a long way. Modern options will provide you with power during power outages and help you save money every day.
These are just a few ways your home battery can help you save on your energy bills.
Cheat rating of time of use
If your electric company charges you by the time you use it, a home battery can really help you out. Some utilities will charge you more for electricity at certain times of the day, sometimes even double what you usually pay. These are called time-of-use rates. These high tariffs will take effect when demand for electricity is highest, typically in the early morning and evening hours when everyone is at home, more commonly referred to as peak hours.
A home battery can help you fool the system. Instead of paying the utility company extra for electricity during peak hours, you can use the stored energy from your battery to power your home during those hours. You will then charge the battery again when the readings return to normal. This cycle works even better if you have solar panels. Instead of charging the battery from the grid, which you still pay for, you can charge the battery using solar energy.
The best part is that you don’t even have to worry about remembering when to switch to battery power or even when the usage time metrics come into effect. Most home batteries on the market today are equipped with special algorithms designed to manage your energy. While your installer is setting up your battery, he will enter your electrical information into the battery software. From there, your battery can determine your utility company’s electricity rates and schedule the optimal time to use battery power or charge – just set it and forget it.
Connect the battery to the solar panels
Solar panels and home batteries are practically a match made in heaven. Your solar panels will generate electricity and the battery will store it for later use. This is especially useful on days when your solar panel system is generating more energy than your home needs. Instead of wasting it, you can channel all that excess energy into the battery to use when you need it.
And this accumulated energy can be used in a variety of situations. The first thing that comes to mind is most likely backup power, which is always useful to have in case of unexpected network failures. But you can also use stored solar energy to power your home with solar power at night, or use it to cheat time-of-use rates.
A home battery is especially useful to have on hand in some states where net metering policies are less than favorable. Net metering is the process of selling excess solar energy to a utility by feeding it back into the electrical grid. The amount you receive compensation depends on the net metering laws in the area. Home batteries tend to be more popular in states like California, Georgia, Hawaii and Tennessee, where you’ll receive less compensation for the excess solar energy you sell to the utility than you pay for electricity from the grid.
Join the virtual power plant
Virtual power plants (VPPs) are another way to use home batteries to lower your energy bills and even reduce the cost of the battery itself. By registering a battery with the VPP, it will become one of many batteries that will be deployed to support the grid. Wind farms are essentially many large batteries that are managed and operated by the local power company to help control the demand for electricity. When the grid experiences extreme load, the utility discharges stored energy from the batteries and sends it back to the grid. These batteries can also help solve the opposite problem: when there is too much electricity coming into the grid (usually from solar), the batteries will charge from the grid, taking some of the load off the grid.
But the best part about participating in a VPP is that you will be compensated for it, and you won’t even have to do anything. Instead of owning your home battery outright, you’ll share that ownership with the utility company in exchange for the use of your battery. With just a few clicks of a button, the utility will charge and discharge the battery as needed. And all this time you will receive compensation.
As an incentive to participate in VPP, utilities often offer to pay for a portion of your home battery in exchange for your participation. So if paying full price for a home battery isn’t in your budget and you don’t mind sharing it, it might be worth joining VPP. Contact your local utility to see if they offer any VPP programs.
You can still have power backup
No matter what you decide to use your home battery for, power backup will still be one of its main functions, and it’s not going away anytime soon. If you decide to join a VPP or use a battery to save on your utility bills, you can still do so.
You can divide the battery capacity to reserve it for specific functions. For example, you can reserve 30% of your battery’s capacity for backup power, and then use the rest of its capacity to power your home during peak hours.
If your battery is enrolled in the VPP program, you will have less freedom in choosing the capacity you want to reserve for backup power. This is because you share ownership of the battery with the utility. However, most utilities usually allow you to reserve at least 20% of your battery’s capacity for backup power. The rest will be managed by the energy company. If you are interested in joining VPP, contact your local utility company or local installers in your area.