At a Spring Valley home not far from the Las Vegas headquarters of the Public Utilities Commission, a group gathered Wednesday to showcase what it proclaimed as a potential game-changer in solar electricity generation.
The focus: a new piece of technology designed to help solar energy users regain the upper hand after the commission increased their electricity bills last year.
Adara Power, a Silicon Valley-based producer of lithium-ion batteries, staged a ceremony to tout the first residential installation of its new storage battery in Nevada. Adara executives say the Adara Energy Solar System will reduce solar users' reliance on the electric grid and allow them to get a return on investment in solar panels in the aftermath of the commission's controversial action.
That action focused on a program known as net metering, in which customers whose solar systems produce a surplus of energy during the day can sell that power back to NV Energy. Citing a need to prevent a cost shift from solar customers to nonsolar ratepayers, commissioners approved new rates that lowered the amount NV Energy had to pay for excess energy. The rates, phased in over 12 years, leave solar customers with the same amount of excess electricity but an inability to reap the same value.
Components of the Adara Energy Solar System are shown during an event Wednesday, April 20, 2016, showcasing the first installation of the product. The system, which also includes solar panels, allows consumers to store electricity in their homes or businesses.
For that reason, Adara, which operates in several states, has argued that storage is essential because it lets customers store excess electricity for use at night and avoid sending it to the grid.
Here’s how the company pitches those perks in its materials: “With a residential Adara installation, homeowners consume all of the energy generated with their solar energy system, sell nothing back to the utility at reduced rates, and purchase less power at the higher retail rate.”
In Nevada, where the future of rooftop solar has been hotly debated, the company’s first installation was a significant step. The system that was spotlighted Wednesday was installed about a month ago and recently was connected to the grid. During the presentation, Adara’s battery system, at the home of one of the company’s co-founders, sat affixed to a wall of the garage next to a power system and an inverter.
The company is hoping the battery, a competitor to Tesla's Powerwall system, will catch on among a growing number of people who are generating and capturing their own electricity. Energy storage that was not owned by a utility grew 405 percent across the United States in 2014, according to a recent report from Greentech Media Research.
For those who may be considering becoming part of the trend, there are benefits, but also drawbacks. Large-capacity lithium batteries are costly — four and sometimes five figures. As more consumer products like Adara's become available, here are some of the considerations consumers may want to keep in mind before making a purchase:
The ‘get-off-the-grid’ myth
Survivalists and the like have long seen batteries as a way to bypass utilities entirely. With enough solar panels and battery storage, the thinking goes, you can uncouple from utility service. But even the most zealous critics of utilities say that is a pipe dream.
For many NV Energy customers, the cost alone would be prohibitive because it would require that a homeowner generate all the electricity they need during the most energy-intensive days of the year. For many, doing so would require a large array of expensive solar panels and more than one home storage battery. And there would be no support in case a customer suddenly needed to source more electricity — say, to turn on the air conditioning in the summer. Ultimately, most solar companies argue that batteries can lower costs by providing more effective energy management services.
But it’s important to know you’re not going off the grid by installing solar panels that are coupled with energy storage technology.
Most customers, even those with batteries, still will purchase energy from the utility, albeit far less than they would without solar panels. Likewise, customers might even sell some surplus electricity back to the utility if the panels’ production exceeds what the batteries can store.
Backup and insulation from rate hikes
On the flipside, there are some significant advantages of energy storage, even if customers continue to be linked to the grid.
For starters, customers can get a better value for the excess electricity their solar panels produce if they use the energy at night rather than selling it back to NV Energy at the reduced credit rates.
Another plus is that batteries provide backup. Since they store electricity generated on-site, they can flip on when there is a power outage and provide a limited amount of backup power for several days. Energy storage companies also tout the technology as a way to insulate a residential home from rate hikes. Because customers with batteries purchase less electricity from utilities, they are less affected by increased utility fees. A final, and perhaps the most compelling, advantage is energy management — providing power during peak energy times, such as in the early evening, and storing energy during times of lower demand.
Are they cost effective?
This is the big question, and the answer depends on where you live and how solar customer decide to structure their NV Energy bills. At first glance, the answer for most people would appear to be no.
The system Adara and its solar installation partner Bombard Renewable Energy unveiled Wednesday cost an estimated $34,000 with tax credits and included installation of solar panels, an inverter and the storage battery system. Adara argues that customers can offset the cost of the battery, which is under $10,000, by purchasing a smaller solar array. It also said the deferred costs of purchasing utility electricity would help pay off the system.
There’s also a little-discussed provision in the new rates that could work in favor of battery storage. Solar customers can now take advantage of an alternative rate structure that prices electricity higher at peak times but lowers electricity prices during nonpeak times. Adara’s battery system allows customers to rely on the battery during peak times and only pay for utility electricity at nonpeak prices, lowering bills.
But even Adara concedes that battery storage is not yet a mass-market product, and some solar advocates pushing to undo the new rates say the cost puts batteries out of reach for the vast majority of customers. Many experts expect the dynamic to change in the coming years as the price of lithium-ion battery cells continues to decrease.
Where you live could also affect the economics of battery storage.
In Nevada, the average price of electricity is 11.42 cents per kilowatt hour, according to the U.S. Energy Information Administration. But take a state like Hawaii, where electricity is 26.92 cents per kilowatt hour, and the economics of purchasing a battery change drastically.
That’s why in Hawaii, SolarCity began offering a smart home package in February that pairs solar panels with energy storage technology.