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Chapter 8

Battery storage


Following on the heels of the rise of affordable solar power comes the next logical step in technology: battery energy storage. Solar PV has given households around the world the ability to generate clean electricity on-site, but without batteries that energy must be used as it is produced. In effect, batteries can turn solar panels into a 24/7 power source instead of just a daytime one.

Beyond the relatively simple task of storing energy, battery technology also promises to revolutionise electricity grids and markets as we know them - particularly when coupled with ‘smart’ communications & control software.

This section covers the essentials of what you’ll need to know if you’re considering batteries for your home.

Battery storage basics

At a minimum, it’s important to understand what types of home battery chemistry types are available, how to read and compare battery specifications, and the main types of battery storage system configurations (and what they can and can’t do).

Battery chemistry types

The battery storage market is evolving rapidly. It’s now possible to divide the available battery chemistry types into three categories: lead-type, lithium-type and ‘other’.

Lead type batteries

Lead type batteries have been in commercial use for residential and other applications for decades, and are a tried and true form of electrical energy storage. Their primary residential use is in off-grid solar systems for remote areas.

There is a wide range of lead batteries types, some of which need regular maintenance and some of which do not. On the most affordable, but most maintenance-intensive, end of the spectrum are ‘wet’ lead-acid batteries, while lead-carbon batteries are among the priciest but low-maintenance chemistries.

Despite their variety, lead-type batteries as a group share a few things in common compared to lithium-type batteries (discussed below).

  • Firstly, they require less capital outlay than lithium batteries (at least for now).
  • Secondly, they are less tolerant to ‘deep’, fast discharging and therefore need to be treated relatively gently; depending on the configuration, the warranty period on a lead battery bank may be as short at 3 years or longer than 10 (as opposed to a general minimum of 5 on most lithium products).
  • Lastly, lead batteries are easily recycled, as they have have enjoyed widespread use for decades now, and their recollection streams are well-established.

Lithium type batteries

Lithium batteries are the ‘new kids on the block’ compared to to lead-type batteries. Their widespread availability comes directly off the back of the rise of handheld electronics and electric vehicles (EVs).

Accordingly, many of the home battery products on offer are made by or for EV manufacturers. While they are still expensive, the promise they hold is tremendous, and prices are certain to come down rapidly as demand for EVs continues to grow.

Like lead batteries, there are a number of different lithium chemistry types now commercially available - two of the dominant ones are lithium nickel manganese cobalt oxide (NMC - used in Tesla’s Powerwall, among others) and lithium-iron phosphate (LiFePO4, used in LG Chem’s RESU range of batteries, among others).

Lithium batteries have high power output capabilities as compared to lead batteries, and are generally more tolerant to faster charging/discharging applications (such as electric vehicles). They also generally have a higher energy density than lead batteries, storing more energy in less space. Most of the commercially available lithium batteries have 10-year warranties and are maintenance-free.

Other battery types

There is an ever-dwindling pool of battery options that are not lead-based and non-lithium. Two once promising ‘alternative’ battery types that have dropped out of the residential market are sodium-sulfur ‘saltwater’ batteries (i.e. Aquion Energy) and zinc-bromide ‘flow’ batteries (i.e. Redflow’s ZCell).

Each battery chemistry type has its own performance specifications and price range. Facing increasing price competition from lithium batteries and without the long history of lead batteries, it’s distinctly possible that batteries that fall into this ‘miscellaneous’ group may cease to be an option for battery system shoppers - but keep watching this space.

A diagram of a battery showing storage capacity to be the full height of the battery and the depth of charge to sit around 80% of the batteries full capacity. An inverter is connected to the battery via a cable and a green path turns orange as the converter turns the power supply into usable energy for the home.
Key battery specifications

When shopping around for a battery system, it’s useful to have literacy around the most important specifications that the salesperson may make reference to or which you may see on spec sheets or brochures. We’ve outlined them below.

Storage capacity (in kWh)

Battery storage capacity is usually described in kilowatt-hours (kWh) - the same unit used for the ‘supply’ or ‘usage’ component of an electricity bill (see Chapter 2) and energy yields from a solar PV system (see Chapter 7). For example, a battery with storage capacity of 5 kWh will hold 5 kWh of energy at the beginning of its working life - although it will probably degrade to hold less as time goes on.

It’s important to note whether a battery’s storage capacity is listed as ‘nominal’ or ‘usable’. ‘Nominal’ capacity may be less than the battery’s actual, usable capacity (see ‘depth of discharge’ below). A good analogy is a smart phone, which may have 16 gigabytes of storage capacity (nominal), of which only 12GB can be effectively utilised (usable). When talking about batteries, it is best to look for or ask about a ‘usable storage capacity’ figure so that you can be clear on what you’re getting.

Note that sometimes a battery product’s capacity may be given as ‘nominal’, which means that it does not take into account ‘depth of discharge’ (see below).

Depth of discharge (%)

Not all battery systems are designed to be discharged to their full capacity. The degree to which a battery can be regularly discharged without prematurely degrading it is referred to as its maximum ‘depth of discharge’ (DoD). For example, a nominal 10 kWh battery bank with a 90% DoD can really only store 9 kWh. Discharging a battery beyond the recommended DoD can incur premature degradation and possibly void the battery system’s warranty.

Fortunately, virtually all systems will have inbuilt protections that prevent draining of the battery beyond the critical DoD point, or get around the problem altogether by simply describing the battery’s capacity in terms of ‘usable kWh’. Make sure that DoD is taken into account when talking about your battery’s storage capacity.

Power output (in kW)

The power output of a battery storage system is given in kilowatts - the same unit used to describe ‘demand’ on electricity bills (see Chapter 2) or the power output of a solar system (see Chapter 7). On a battery spec sheet there will usually be two output figures: ‘Continuous output’ - which is the standard output that can be relied upon, and ‘peak’ or ‘maximum’ output - which indicates the ability of a battery system to ‘surge’ to meet sudden, temporary increases in demand. Peak output usually refers to a period of 3-10 seconds.

Battery power output is important for its ability to meet your home’s instantaneous energy energy needs - for example, running a vacuum cleaner and the washing machine at the same time. If you are connected to the grid, meeting demand will virtually never be an issue of physical limitations, but if you are on a demand tariff (see Chapter 2), battery power output will be important in helping you avoid higher demand charges.

For example, let’s say that you are charged a demand tariff of $2  every time you draw an excess of 3 kW of power from the grid. If you are running multiple appliances and using 3.3 kW at a particular time of day, the battery system may be able to kick in 0.3 kW to prevent you from going over that threshhold - thus helping you avoid a $2 charge for the day. In this way, if properly orchestrated (e.g. with an energy management system) batteries may work together with solar PV system output to minimise demand charge costs.

Also note that the upper limit for a battery bank’s power output is directly related to the capacity of the inverter that the system uses. For example, a battery bank with a maximum 10 kW power output will be limited to 5 kW if 5 kW is the capacity of the inverter.

Storage efficiency (%)

Putting energy into batteries and then drawing it back out results in unavoidable efficiency losses - usually in the region of about 10-20%. For example, if a 10 kWh battery bank has a storage efficiency of 90%, you will get out 9 kWh for every 10 kWh that you put in.

You will also lose energy as it passes through the battery inverter. So it is important to question the quality and energy loss potential of the inverter that comes with your system when you are investigating the right setup for you.

Note that storage efficiency is an average, and that efficiency at a given time may be better or worse depending on factors like ambient temperature and the rate at which power is charged or discharged from the battery.

Cycle life (# of cycles)

Cycle life is the number of times a battery can be charged/discharged (‘cycled’) before it reaches the ‘end’ of its working life (see ‘end of life retained capacity’). The cycle life figure may count either ‘partial’ or ‘full’ cycles - it’s important to be clear about which it refers to for the battery products you are considering.

Note that if you are charging your batteries only with your solar panels, you will realistically cycle your batteries no more than once per day. So a cycle life of 3,650 should be sufficient for a battery with a 10 year warranty. However, a higher cycle life figure will allow you to cycle the battery more than once daily, which is useful if you are on a time of use billing arrangement (see Chapter 2) and want to ‘do’ tariff arbitrage (see below). Additionally, a high cycle life indicates - but does not guarantee - that the battery bank will continue to operate after the warranty period expires.

Also note that each battery cycle is not equal - one cycle at the beginning of a 10 kWh battery’s life may indeed be a full 10 kWh cycle, but by the tenth year of operation one cycle may only be 7 kWh as a result of battery degradation.

Warrantied energy throughput (in kWh or megawatt-hours - MWh)

Warrantied energy throughput is a more useful figure than cycle life in determining a battery bank’s lifetime value to you because it takes into account battery degradation. It refers to the total amount of energy that can pass through the batteries over their lifespan, measured in kilowatt-hours or megawatt-hours (where 1 MWh = 1,000 kWh). This number is more likely to appear on a warranty document than a spec sheet, but it is arguably more important than cycle life, so look for it or ask about it.

Note that some battery manufacturers will give a cycle life figure but not an energy throughput figure, and others vice versa.

End of life retained capacity (%)

Common battery chemistries suffer from unavoidable degradation over time as they are used. Battery ‘end of life’ is the point at which the battery should probably be replaced, determined mainly by the number of times it has been cycled. The ‘retained capacity’ at end of life indicates how much of the original usable capacity should still be usable by the end of the warranty period (or cycle life - whichever comes first). For example, a 10 kWh battery bank with a stated end of life retained capacity of 70% will be able to store at least 7 kWh of energy by the end of its warranty period.

Battery storage benefits

Battery storage systems are fast becoming economical for households everywhere, driven mainly by falling lithium battery prices. Battery storage systems confer two primary benefits to their owners: Energy bill savings and energy independence.

Saving money

There are primarily three ways in which a battery bank can save a home money when coupled up with a solar PV system in a grid-connected home: solar charging, tariff arbitrage and selective energy export.

Solar charging

‘Solar charging’ is when solar energy is used to charge up a battery bank for later use. Generally speaking, solar charging happens during the daylight hours when the amount of solar energy your system produces is greater than the amount of energy your home consumes; the excess solar energy is used to charge up the batteries.

For every kilowatt of solar energy that is shifted into the battery bank for nighttime use, you’ll save the difference between your solar feed-in tariff rate and the amount you pay for grid electricity (minus a bit for battery inefficiencies).

For example, if you pay 25c/kwh for grid electricity, and get a feed-in tariff of 10c/kWh, you’ll save 15c/kWh for solar energy that you move into batteries for later use, minus 1-2c/kWh for efficiency losses - so 13-14c/kWh in total. If you’re on time of use billing (see Chapter 2), you can potentially save significantly more, as the most expensive peak rates tend to follow the sunniest parts of the day.

Note that if you live in a region where there is a generous solar feed-in tariff available, batteries will probably not make financial sense for you (unless there is a separate battery incentive), as you’ll benefit more by sending your energy into the grid.

Tariff arbitrage

Tariff arbitrage is a money saving option only available to customers on time of use billing (see Chapter 2). It is the act of charging your batteries when grid electricity prices are low (‘off-peak’ rates) and discharging them when rates are higher (i.e. during ‘shoulder’ or ‘peak’ times). It can be used in combination with solar charging to yield potentially greater benefits than solar charging on its own.

As an example, if you pay 10c/kWh for off-peak electricity, but 20c/kWh for shoulder rates and 40c/kWh for peak rates, you could charge your batteries for 10c/kWh and save up to 30c for each kWh of energy that you store by discharging that stored energy during peak times. More realistically, however, you’ll save 10-20c/kWh.

Selective energy export

‘Selective energy export’ is when you are rewarded with a higher rate for sending energy (either from your solar panels or batteries) into the grid at select times.

Most commonly, this means that you are essentially treated as a power generation plant, selling your energy into the grid when it is needed most. Selective export programs are not yet common, but their prevalence is increasing as electricity infrastructure becomes more digitally interconnected.

As an example, a participant in a selective export program may be sent a notification at 5pm on a hot summer’s afternoon (when many households would be running air conditioning) advising them that they may opt in to a selective export event, for which they may be rewarded to the tune of $2 for 1 kWh of energy. Such events are likely to be infrequent but a worthwhile third revenue stream for system owners.

Energy independence

One of the other main benefits of battery storage is energy independence - a reduced reliance on grid electricity in favour of locally-generated (and stored) solar energy. With batteries quickly becoming affordable, it is no longer out of reach for households to meet the majority or all of their energy needs themselves.

At the moment, greater energy independence may save you more money on your energy bill, but it does not necessarily translate into a fantastic investment over time. Check the numbers and know what you’re getting into before you purchase a system.

Energy management can help maximise battery value

Energy management systems like carbonTRACK help homeowners to get the most of their batteries by deploying them in the greater context of the home’s energy environment.

Enquire today about carbonTRACK can help you.


In the last chapter, we’ll look at what home energy management systems are and how it can help your household.

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