Solar Battery Storage or Net Metering, What Option Should You Choose for Residential Solar?

How to Choose the Best Options for Your Residential Solar System

Making the decision to go solar will help your household reduce its carbon footprint and its monthly utility bills, but it is important to note that this won’t be the only decision you’ll have to make. With solar, you will also have to decide how you want to handle the excess energy your solar system will be generating.

Currently, there are two options available – store the excess in batteries for use when the sun goes down or sell the excess energy to your local electric provider through a process called net metering. Here’s what to consider before making this important decision for your residential solar system.

Pros and Cons of Battery Storage

One of the biggest selling points of solar is its reliability. Imagine your home’s electricity source not being affected during severe weather or rolling blackouts. The thing is this type of reality is only achievable if you have battery storage with your system. Any excess energy your system produces during the day gets stored in your batteries, so you can enjoy electricity any time the sun isn’t shining, like at night.

Battery storage is the only way a home with solar can be fully independent from the national electric grid. So, if you want freedom from the antiquated grid and all the risks that comes with it, then battery storage is the way to go.

On the flip side of that coin is the fact that solar batteries are the most expensive components in any solar system. This means buying batteries will lengthen your system’s payback period (the time it takes for the system to pay for itself) sometimes by as much as five or six years.

Pros and Cons of Net Metering

Net Metering offers a financial incentive for homeowners who choose to install solar panels because it allows a homeowner to sell the excess energy their solar system produces to their electricity provider. Depending on where you live and who your utility provider is, you may have one of a few different net metering options. The most common in use today include:

  • Full-Retail Net Metering: The utility company pays for your excess energy at the full retail rate of electricity, which is the same amount that your non-solar neighbors are paying per kilowatt hour (kWh) for their electricity.
  • Avoided Cost Net Metering: The utility company pays for your excess energy at the price the utility saved by not having to provide you with electricity. This amount is lower than the retail rate.
  • Time-of-Use Rate Net Metering: The rate your utility company pays you for your excess energy will vary based on energy demand. Since electricity is most expensive during peak hours, the amount you can earn from this type of net metering can fluctuate depending on when the utility company buys your electricity.

If you live in a state that offers full-retail net metering, then solar panels without batteries is a great option if you want to reduce your system’s payback period and earn additional revenue by selling your excess energy.

Of course, the downside of choosing this option is that your home’s solar-generated electricity will only be available during the daytime. At night, your home will get its electricity from the electrical grid, which you will have to pay the usual rate for. This also means that if a power outage occurs in the evening hours, your home will be without power just like all your non-solar neighbors.

It is also important to note that many states are moving away from net metering benefits, so before you choose, make sure your state is going to be continuing to offer these benefits if they are one of your reasons for going solar.

Is There a Battery Net Metering Option?

In California, a new concept was signed into law that allows for battery net metering. Also called NEM Paired Storage, this option is similar to how net metering works now, in which a utility company can purchase excess energy from a homeowner’s solar system, but the key difference is that with battery net metering, the utility can also purchase unused energy that is stored in the homeowner’s solar batteries. With battery storage becoming more popular among U.S. solar customers, battery net metering is also becoming popular in other states, albeit slowly.

Does Adding a Solar Battery Storage System Make Financial Sense?

The answer to this question varies on whether your state has good net metering policies, and your only concern is saving and earning money. If this is the case and having access to solar energy during times of power outages isn’t a primary concern of yours, then you can save money by not buying a battery.

But if your state has bad net metering policies, no net metering at all, or you want to ensure your home always has access to electricity regardless of the quality of your local grid, then a battery will probably make better sense for you.

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