Vish-Blog

AutoGrid Case Study: Solar + Storage Pencils Out for this AutoGrid Innovator

By Vish Ganti

The incentives to pair rooftop solar with energy storage couldn’t be greater than now.

And if the changing climate, wildfires and rising energy bills aren’t enough motivation to trim your carbon footprint, maybe the economics will put you over the edge.

As you’ll see with my own experience, the extrinsic and intrinsic rewards of operating your home energy system with sunlight and a battery really add up.

Come with me on a little journey as I tell the story of my latest home energy project: installing Tesla Powerwall-2 energy storage units paired with an existing 5kW photovoltaic solar system.

Does it pencil?

As a solutions architect, I’ve been developing clean energy projects for a number of years. So I’m wired to think in terms of both technology evolution and the overall business case. One fundamental question I always ask: Does the project make sense financially for my customers?

To ensure that I could justify the investment for my personal storage + solar project, I asked the same question and undertook the same level of due diligence I’d expect from my customers.

In this post, I’ll share my evaluation criteria, both from the technology and project economics points of view. Spoiler alert: With incentives and discounts, the project not only made financial sense but also beat industry estimates of expected per-kW purchase plus installation prices.

Home energy characteristics

My house features many typical and perhaps a few not-so-typical attributes:

1,500 sq. ft. detached single-family design
Standard PV system size: 5 kW
20 roof-mounted solar panels, commissioned August 2016
Fully retrofitted with dimmable LEDs and latest Energy Star–rated appliances
240-volt Level 2 EVSE charging equipment
Chevy Volt with 18.4 kWh battery pack

Demand profile analysis

Let’s pull apart my daily energy usage to understand my demand profile. The following timeline shows my demand (red)—notice the spikes in the morning and evening—along with my midday solar PV generation (orange).

  • Location: East Bay, California
  • Baseload /always-on load: approximately 250 Watts (phantom loads that always run in the house)
  • Solar production hours: ~ 8 a.m. – ~ 6 p.m.
  • Average daily energy production: 28 kWh (most energy feeds back to grid during this time)
  • Level 2 EV charging: 6:30 a.m. – ~ 9:30 p.m.
  • Rate schedule: PG&E E-1 (grandfathered into tiered rates for 10+ years since solar was installed before December 2016)
  • Monthly peak demand: < 8 kW (this was the magic number)

With a monthly peak of 8 kW, I started looking at storage units that could handle at least that load to cover worst-case situations. When two Powerwall units are strung together, the built-in inverter supports a peak of 10 kW, albeit for a brief period. On paper, this suggested that I could supply all my electricity needs independent of the grid even during peak periods. And with time-of-use rates soon coming to California, I will be able to avoid those high peak-energy charges.

Take Away: I’ve been successful at mimicking the classic California Independent System Operator (CAISO) duck curve—and now will handle it with stored energy. Within 30 minutes—i.e., from 6 p.m. to 6:30 p.m.—my home’s demand ramped from negative 4 kW (achieved through solar over-production) to plus 4 kW as EV charging kicked in—a spread of 8.0 kW. This will be handled easily by my two Powerwall units.

Technical specs of the storage system

Back in 2017, when I kicked off the SGIP incentive paperwork, I compared the technical specs from Tesla and other commercially available storage products. The Tesla Powerwall 2 came ahead in every category—the most important one being energy density. Most battery models available at the time had a capacity of ~5 kWh, whereas the Tesla units came with 13.5 kWh capacity. This made my analysis easy. For almost the same price, the Tesla Powerwall 2 units had more than twice the amount of storage than the competition.

Source: https://www.tesla.com/sites/default/files/pdfs/powerwall/Powerwall%202_AC_Datasheet_en_northamerica.pdf

Above are some additional specs of my project.

The bottom line

Source: https://www.tesla.com/powerwall

The capital costs have to make sense, and, luckily, they came out genuinely rosy for me. Tesla’s website advertises a price of $14,500 just for hardware, which would bring the normalized costs—without any incentives—to approximately $540/kWh. For my project, however, the normalized price came down to $143/kWh for hardware and installation after incentives.

Right around the time I was signing the project paperwork, Tesla increased the price of the Powerwall-2 contract. But Swell Energy, which managed the installation, honored the original pricing and gave me a discount of $,2500 on the project if I signed up immediately (I did!).

There are several components to the pricing. The following worksheet should explain the line items, which I’ll discuss below.

The California Self Generation Incentive (SGIP) added a huge kicker to make this project cost effective, covering 43% of the total cost. As of Aug. 31, 2018, the SGIP program was extended through 2025 with an added funding of $830 Million as part of SB 700. You can read more details in this GTM Article.

Overview of project costs and sources of funding


Source: Vish Ganti

As a solar-paired storage system, my project also qualified for the federal investment tax credit (ITC), allowing me to deduct 30 percent of the cost of the system from my federal taxes. Our friends at EnergySage have done an excellent job of laying out the program details here.

Although the project was approved in November 2017, Tesla couldn’t supply my batteries to Swell immediately. To cover the opportunity cost during the delays, I received an additional $500 credit from Swell Energy.

With all the incentives combined, my project now stands at a net out-of-pocket cost of $3,780 for two Powerwalls-2 units, fully installed. That renders a normalized price of $143/kWh.

Looking to the future

Beyond the home energy savings and carbon-saving benefits, I could use the Powerwalls to increase solar self-consumption and potentially make some money in energy arbitrage. In my home state, I can bid the battery into the California Demand Response Auction Mechanism (DRAM), provided I meet the market rules.

Everyone’s situation is a little different, so if you’re interested in a solar + storage system for your home, do your homework to see if it’s right for you. A good place to start is the EnergySage website, where you can do research, get quotes from competing contractors, and even shop financing.

I’ll leave you with some photos from the installation.

PG&E crews replace a utility pole outside my house.

Vish Ganti is Director of Strategy and Business Development at AutoGrid. For more information on Vish’s project, contact us.