Understanding Solar and Storage

Solar photovoltaic panels (PV) convert sunlight to electricity. This electricity can then be used at the home or business as it is generated – that is, when the sun is shining. Because the sun isn’t always shining, PV systems are typically connected to the local electric utility (a “grid-tied” system). If you generate more electricity than you use, it will go to the grid, and you will get paid something for this electricity. How much you get paid for this exported energy varies depending on your utility, your electricity rate, and when you install your system. Click here for more information Export Credit Rates.

When you need electricity and the sun isn’t shining, you draw electricity from the grid and pay the retail rate according to your utility rate schedule. A “grid-tied” PV system can provide reliable, clean electricity for your home or business and can reduce monthly utility costs, as well as contribute to community health and reduce impacts due to a changing climate. A PV system can be sized to meet your energy needs and budget, within the constraints of your building or property.

Financial Benefits and Payback Period

Because different customers have different electric service rates, the financial benefits of a solar PV system will vary. For this reason, it is helpful to understand your utility bills and usage patterns, which a solar installer can help with.

Battery Storage

A battery storage system can provide increased value and optionality for your solar system. A battery installed in conjunction with a solar system provides a place to put your solar generated electricity when you don’t need it. This can serve multiple purposes for owners:

  • If your utility doesn’t provide full retail compensation for generated electricity, you can save this electricity on site and use it when you need it. This can reduce your utility bills.
  • The battery can be programmed to provide energy when your demand charges are typically highest, thus reducing your monthly demand charge rate. [This is relevant only for businesses who pay demand charges. Residential customers do not pay demand charges.]
  • If time-of-use rates are available at your utility, you can use battery power when rates are high and buy grid electricity when the rates are low.
  • If the power goes out, you can use the battery to power your home or business or provide resilience for your community.

It is important to recognize that you cannot achieve all of these battery benefits at the same time. In conjunction with a battery installer, you need to program your system to meet your highest priorities.

Batteries can also provide benefits to the utility and the electric grid, which can reduce utility costs overall by reducing the need for a utility to build more resources for times when the sun isn’t shining. For more details on this and other uses of battery storage, including very thorough explanations, please refer to Solar+Storage for Low- and Moderate-Income Communities or Resilient Power.

The recently approved Inflation Reduction Act has made some information on this website outdated. We are working to update ASAP. In the meantime, please consult a tax expert on all incentives and rebates listed.