What Are The Financial Benefits of Solar Battery Storage?
Going solar is an investment — and many homeowners invest in a solar upgrade because they know there are financial perks to using your own clean, renewable energy. Eventually, an investment in solar will pay for itself and you can start raking in the dough while you watch energy prices undoubtedly rise over the life of your system.
But what about the added expense of including solar battery storage in your solar plans? Sure, solar battery storage can keep your lights on during an outage, but is there an additional financial benefit to solar battery installation?
Why yes, yes there is! Here’s what you need to know.
How Solar Batteries Save You Money
The basic idea of solar battery storage is simple: use batteries to save the excess energy coming from your solar panels, and use during times of low solar production. For solar PV systems that do not utilize solar batteries, the owner will be responsible for any grid supplied energy used when solar panels are not converting sunlight to electricity, like overnight and even worse during peak demand charging periods where there may be low solar production!
In Arizona, any excess solar energy generated that can’t be used or stored can be exported or sold back to the grid in return for a solar export credit, usually at a rate much lower than the retail value. This isn’t 1:1 net metering, which has been largely phased out for new solar energy installations. Beyond these solar buy back rates, there may still be times when your grid supplied energy costs more than it usually would, thanks to demand response rates for peak periods.
Installing battery storage to load shift demand charges offers the flexibility to extend your use of renewable energy to times when demand is high, like in the heat of the early evening after many Arizonans have returned home from work. When installed correctly, a solar plus storage system will eliminate your energy costs entirely, leaving you with a faster payback period and more money in your pocket.
For example, a customer on the Saver Choice Max service plan will have lower on-peak and off-peak pricing but have higher seasonal on-peak demand charges up to $17.438 per kW for summer and $12.239 per kW for winter. By discharging your solar battery during these on-peak times between 3.00pm and 8.00pm, you’ll be eliminating grid-supplied purchased electricity at those high rates and using the free renewable energy generated and stored in your batteries.
APS Residential Service Plans
Solar Batteries Keep The Lights On
In addition to saving you in demand response charges, a solar battery system can be designed to take your home off the grid, meaning when there is a power outage in Phoenix, your lights will still be on! Without storage, solar PV panels are required to be connected to the grid, and for safety reasons, are also required to automatically shut down when a grid outage is detected.
Solar batteries can allow you to continue to run your home as you normally would, since you are no longer dependent on grid-supplied energy. As long as there is still plenty of Arizona sunshine — which is plentiful year round — your home will have power!
Reducing Solar Battery Installation Costs
The added expense of solar batteries causes many homeowners to overlook the long term benefits of storing solar energy, but there are incentives and rebates aimed at making this green home upgrade more affordable.
As long as your solar batteries receive 100% of their energy from a renewable source (like solar panels), they also qualify for the Federal Investment Tax Credit, meaning you will save the equivalent of a total of 26% of your solar battery costs on your federal taxes for the year they were installed in 2021 and 2022.
Plus, you will not have to pay a sales tax on any of your solar equipment, and if you haven’t already met the $1,000 maximum benefit from the Arizona State Solar Tax Credit, your battery installation costs also qualify.
See How Much You’ll Save with a Free Solar Battery Quote
If you are curious about how much solar batteries are going to cost you, what your solar battery storage options are, and how much you can expect to save over the lifespan of your system, schedule a free solar quote with SouthFace Solar & Electric.
Our team will include your historical energy use and your future solar goals to inform our proprietary energy modeling process and provide you with a clear and accurate picture of your future solar energy, so you can invest with confidence.