{"id":11047,"date":"2023-06-09T18:55:38","date_gmt":"2023-06-09T18:55:38","guid":{"rendered":"https:\/\/www.solar.com\/learn\/?p=11047"},"modified":"2023-08-23T18:06:55","modified_gmt":"2023-08-23T18:06:55","slug":"what-is-consumption-only-battery","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/","title":{"rendered":"What Is a Consumption-Only Battery and Why Is It Being Offered in California?"},"content":{"rendered":"<p>If you\u2019re looking into solar to reduce your electricity costs in California, you may come across a new term that takes a second to digest: consumption-only battery<\/p>\n<p>Consumption-only battery is one term for the new, more affordable generation of solar batteries that provide all the cost savings storing and using your own solar production, but do <em>not<\/em> have capability to provide backup power during grid outages.<\/p>\n<p>You may also see this referred to as:<\/p>\n<ul>\n<li>No-backup batteries<\/li>\n<li>Grid-tied batteries<\/li>\n<li>Rate Saver batteries (or some version of this)<\/li>\n<li>Arbitrage batteries<\/li>\n<li>BatteryOne \u2013 just one calorie! (Okay, we made this one up)<\/li>\n<\/ul>\n<p>Regardless of what you call it, a consumption-only battery is crucial to maximizing the savings potential of a home solar system billed under NEM 3.0.<\/p>\n<p>We\u2019re going to divide this article into two sections, both of which answer, \u201cWhat\u2019s the point of a battery that doesn\u2019t provide backup power?\u201d<\/p>\n<ul>\n<li><a href=\"#short\">The quick version<\/a><\/li>\n<li><a href=\"#long\">The in-depth version<\/a><\/li>\n<\/ul>\n<p>Let\u2019s start with the short version, but if at any point you need more details, then it\u2019s time to jump to the long version below!<\/p>\n<h2><a id=\"short\"><\/a>The quick version: What\u2019s the point of a consumption-only battery?<\/h2>\n<p><strong>Simply put, the point of a consumption-only battery is to maximize the savings of a NEM 3.0 solar system without paying for the additional (and rather expensive) backup capabilities of a traditional battery.<\/strong><\/p>\n<p>But why is battery storage so crucial for savings under NEM 3.0?<\/p>\n<p>The key feature of <a href=\"https:\/\/www.solar.com\/learn\/nem-3-0-proposal-and-impacts-for-california-homeowners\/\" target=\"_blank\" rel=\"noopener\">NEM 3.0 solar billing<\/a> is a drastic reduction in solar export rates \u2013 that\u2019s the value of surplus solar electricity pushed onto the grid. With export rates slashed by 75% on average, it\u2019s much more economical to store and consume your own solar production onsite than to export it to the grid.<\/p>\n<p>That\u2019s where <a href=\"https:\/\/www.solar.com\/learn\/solar-battery\/\" target=\"_blank\" rel=\"noopener\">battery storage<\/a> comes in.<\/p>\n<p>Home batteries have always had the ability to store solar energy produced during the day to use at night \u2013 a feature known as load shifting \u2013 but before NEM 3.0 billing, this feature was little more than a perk that saved the average household ~$30 a month. So, batteries were primarily associated with backup power instead of energy cost savings.<\/p>\n<p>Under NEM 3.0, load shifting is crucial to bill savings (<a href=\"#nem3\">learn more in the in-depth version<\/a>),\u00a0but not every home needs \u2013 or wants to pay for \u2013 backup capabilities. Battery makers recognized this dilemma and said, \u201cOkay, let&#8217;s set the backup components aside and offer just the load shifting.\u201d<\/p>\n<h3>The cost of consumption-only versus backup batteries<\/h3>\n<p>As it turns out, there\u2019s quite a bit of technology and labor that goes into enabling backup capabilities and removing these from the equation <em>substantially <\/em>reduces the cost of consumption-only batteries (<a href=\"#backup\">learn more in the in-depth version<\/a>).<\/p>\n<p>In our experience so far, <em>consumption-only batteries are being priced around $3,000 to $4,000 lower than their backup counterparts<\/em>. This significantly reduces the cost barrier to battery technology and reduces the payback period of a NEM 3.0 solar and battery system.<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter size-medium\" src=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2023\/06\/Backup-vs-Non-Backup-Battery.png\" alt=\"chart showing the difference in backup and non-backup solar batteries\" width=\"1545\" height=\"2000\" \/><\/p>\n<p>Imagine if your cable TV provider allowed you to reduce the cost of your plan by 25-30% by removing 200 channels that you never watch. That\u2019s pretty close to what\u2019s happening with consumption-only batteries.<\/p>\n<h2>Which type of battery is right for me?<\/h2>\n<p>Under NEM 3.0 solar billing, the question has shifted from \u201cDo I need a battery?\u201d to \u201cWhat type of battery do I need?\u201d<\/p>\n<p>But the answer remains the same: It depends on your energy goals.<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter size-medium\" src=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2023\/06\/self-consumption-vs-backup-battery.png\" alt=\"self consumption battery vs backup battery\" width=\"1080\" height=\"1080\" \/><\/p>\n<ul>\n<li>If you are strictly interested in energy cost savings, then a consumption-only battery is the way to go.<\/li>\n<li>If you regularly experience outages (or want to plan ahead), then a backup battery is a better fit.<\/li>\n<\/ul>\n<p>It\u2019s also worth considering the pros and cons of a consumption-only battery.<\/p>\n<table width=\"624\">\n<tbody>\n<tr>\n<td width=\"312\">Pros<\/td>\n<td width=\"312\">Cons<\/td>\n<\/tr>\n<tr>\n<td width=\"312\">Maximum savings for NEM 3.0 solar system<\/td>\n<td width=\"312\">Does not provide backup power<\/td>\n<\/tr>\n<tr>\n<td width=\"312\">Shorter payback period<\/td>\n<td width=\"312\">Adding backup components later is more expensive than during initial installation<\/td>\n<\/tr>\n<tr>\n<td width=\"312\">Not paying for features you may not use<\/td>\n<td width=\"312\">May need to add capacity in order to provide robust backup capabilities later on<\/td>\n<\/tr>\n<tr>\n<td width=\"312\">Quicker and easier installation<\/td>\n<td width=\"312\"><\/td>\n<\/tr>\n<tr>\n<td width=\"312\">Can add backup components later<\/td>\n<td width=\"312\"><\/td>\n<\/tr>\n<tr>\n<td width=\"312\">Storing and using your own solar production increases grid resiliency<\/td>\n<td width=\"312\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Connect with an Energy Advisor to talk through your battery options and to compare binding quotes for each option.<\/p>\n<p>&nbsp;<\/p>\n<gs-injectable background = 'true' border='true' primary_color = '#8b72d3' secondary_color='#f98d7e' utm_campaign = 'get_started_injectable' utm_medium='consumption_only_battery' content_texts = 'true' upper_text='Compare home battery' upper_text_span = 'solutions' lower_text='See how much solar could lower your' lower_text_span = 'energy costs' get_started_text='Get started' only_community_solar='false'><\/gs-injectable>\n<p>&nbsp;<\/p>\n<h2><a id=\"long\"><\/a>The in-depth version: Why are consumption-only batteries being offered in California?<\/h2>\n<p>Over the last decade or so, there have been two primary benefits for homeowners to install home battery systems:<\/p>\n<ul>\n<li>Backup power for grid outages<\/li>\n<li>Self-consumption of surplus clean energy<\/li>\n<\/ul>\n<p>The backup component is pretty straightforward. Configuring a solar system with a battery allows the system to continue to operate during a power outage, providing uninterrupted power to the home. The battery will power the circuits it\u2019s been configured to, and the panels will recharge the battery.<\/p>\n<p>Historically, the consumption-only aspect of battery systems has been a much less potent motivator. For homeowners whose utility companies offer full 1:1 <a href=\"https:\/\/www.solar.com\/learn\/what-is-net-energy-metering\/\" target=\"_blank\" rel=\"noopener\">net metering<\/a>, where electricity prices are the same at all times of day, using a battery for consumption-only doesn\u2019t provide any additional savings. Some people appreciated the ability to use their own clean surplus power in the evening rather than drawing in dirty power from the grid, but there wasn\u2019t really a financial incentive to do so.<\/p>\n<h3>Enter Time-of-Use rates<\/h3>\n<p>This paradigm began to shift when CA passed NEM 2.0 rates back in 2016. NEM 2.0 required homeowners to move to a <a href=\"https:\/\/www.solar.com\/learn\/time-of-use-rates\/\" target=\"_blank\" rel=\"noopener\">time-of-use<\/a> (TOU) rate plan when installing solar, which varies the price of electricity throughout the day. Under NEM 2.0, the rate for surplus power that a home solar system generated and sent back to the grid during the middle of the day (an \u201coff-peak\u201d period) became less than the cost of electricity drawn from the grid during the late afternoon &amp; early evening (an \u201con-peak period\u201d).<\/p>\n<p>As a result, these TOU rates began providing a financial incentive to use the battery for consumption-only for the first time. Rather than exporting surplus power to the grid for lower credit and then being charged higher rates from the utility in the evening, using a battery to store surplus energy during the day and feed that same power into the house in the evening reduces the amount of power the home needs to draw from the grid at those higher peak rates.<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter size-medium\" src=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2023\/06\/saving-money-with-battery-self-consumption.png\" alt=\"how solar batteries save money\" width=\"488\" height=\"337\" \/><\/p>\n<p>In turn, the battery&#8217;s self-consumption capability helped reduced the remaining utility charges for the homeowner and yielded higher overall savings for a combined solar &amp; battery system.<\/p>\n<p>The value of this self-consumption capability is highly dependent on the difference in the rates throughout the day. The greater the difference between the rate for surplus power and the peak rate in the evening, the greater value the battery system will provide. Under NEM 2.0, the difference between the off-peak and on-peak rates wasn\u2019t particularly high &#8211; maybe 20% or so.<\/p>\n<p>So, even though the battery\u2019s self-consumption capability would generate additional savings, it wasn\u2019t hugely substantial &#8211; generally $30\/month or so for the average project in CA &#8211; which means homeowners were still looking to batteries much more for power backup than for savings.<\/p>\n<h3><a id=\"nem3\"><\/a>NEM 3.0 changes the game again<\/h3>\n<p>This is where CA\u2019s new NEM 3.0 rates fundamentally change the equation. NEM 3.0 reduced the value of surplus power sent to the grid in the middle of the day by about 75% compared to NEM 2.0 levels.<\/p>\n<p><img loading=\"lazy\" class=\"size-full wp-image-9520 aligncenter\" src=\"https:\/\/s3.amazonaws.com\/solarassets\/wp-content\/uploads\/2021\/05\/Screenshot-2021-05-06-at-6.50.43-PM.png\" alt=\"NEM 2.0 vs 3.0 Export Value\" width=\"514\" height=\"294\" \/><\/p>\n<p>With credits for daily surplus averaging around 7-8 cents per kWh and peak evening rates exceeding 50 cents\/kWh, <em>there is now about 80% less benefit to sending surplus energy back to the grid rather than storing it in a battery to use later<\/em>. This makes each kilowatt-hour saved for self-consumption far more valuable than before, and allows battery systems to generate far higher returns.<\/p>\n<p>Under these conditions, homeowners have begun expressing much more interest in batteries from a savings perspective, even if they don\u2019t need the backup capability that standard battery installations provide.<\/p>\n<p>So as long as you\u2019re installing a battery to maximize your savings through consumption-only, why would you not just have the battery configured for backup as well?<\/p>\n<h3><a id=\"backup\"><\/a>Why not just install a standard backup battery?<\/h3>\n<p>The answer to this question is that configuring home batteries for backup requires thousands of dollars in additional costs, for both materials and labor, beyond the battery unit itself. In order for batteries to provide backup power, installation companies need to take on significant additional work, including:<\/p>\n<ul>\n<li><strong>Running complex load calculations<\/strong> to determine how many circuits the battery system can accommodate for backup based on the specific demands on each of those circuits;<\/li>\n<li><strong>Installing a subpanel<\/strong> that houses those specific circuits that have been determined to be included and running wires &amp; conduit from the main panel;<\/li>\n<li><strong>Relocating those designated breakers<\/strong> from the main electrical panel to the subpanel;<\/li>\n<li><strong>Installing an automatic transfer switch<\/strong> that will allow the solar &amp; battery system to disconnect from the grid when a power outage is detected to ensure live power isn\u2019t backfed into the power lines;<\/li>\n<li>Increased complexity for both the <strong>permitting &amp; installation processes<\/strong><\/li>\n<\/ul>\n<p>So, by configuring a battery system to only provide consumption-only on a daily basis, installation companies can offer the same amount of battery capacity for consumption-only savings at substantially lower cost &#8211; typically $3,000-4,000 &#8211; than the same battery system with all the additional work required for power backup.<\/p>\n<p>This kind of consumption-only configuration wasn\u2019t needed when backup power was really the sole reason to install a battery. Now, however, <strong>homeowners looking to maximize their bill savings who don\u2019t particularly need backup power can get the same amount of savings that backup-configured systems can provide but at substantially lower cost.<\/strong><\/p>\n<p>Additionally, if grid reliability worsens over the coming years and homeowners decide they want to use their consumption-only battery for power backup, they have the flexibility to reconfigure that battery for backup down the road.<\/p>\n<h2>The bottom line<\/h2>\n<p>NEM 3.0 changed the solar landscape in California by reducing the benefits of solar-only systems and increasing the importance of batteries.<\/p>\n<p>Consumption-only batteries are the solar industry\u2019s response to NEM 3.0. By stripping out the backup power components, consumption-only batteries provide all the load shifting benefits of a traditional battery, but at a much lower price point.<\/p>\n<p>Consumption-only batteries are a great option for homeowners that want to maximize their energy cost savings and aren\u2019t frequently impacted by grid outages.<\/p>\n<p><a href=\"https:\/\/www.solar.com\/dashboard\" target=\"_blank\" rel=\"noopener\">Connect with an Energy Advisor to discuss and compare your battery options.<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re looking into solar to reduce your electricity costs in California, you may come across a new term that takes a second to digest: consumption-only battery Consumption-only battery is&#8230;<\/p>\n","protected":false},"author":45,"featured_media":11053,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[93,45],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.5 (Yoast SEO v19.10) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is a Consumption-Only Battery and Why Is It Being Offered in California? | Solar.com<\/title>\n<meta name=\"description\" content=\"Consumption-only battery allows homeowners to enjoy all the savings of load shifting, without paying for backup capabilities they may not use.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is a Consumption-Only Battery and Why Is It Being Offered in California?\" \/>\n<meta property=\"og:description\" content=\"Consumption-only battery allows homeowners to enjoy all the savings of load shifting, without paying for backup capabilities they may not use.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/\" \/>\n<meta property=\"og:site_name\" content=\"Solar.com\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Solar.comOfficial\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-09T18:55:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-23T18:06:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2023\/06\/what-is-consumption-only-battery.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Dan Huffman\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dan Huffman\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/\"},\"author\":{\"name\":\"Dan Huffman\",\"@id\":\"https:\/\/www.solar.com\/learn\/#\/schema\/person\/0dd6f73f2c6f1e1df47dca3a48e0353c\"},\"headline\":\"What Is a Consumption-Only Battery and Why Is It Being Offered in California?\",\"datePublished\":\"2023-06-09T18:55:38+00:00\",\"dateModified\":\"2023-08-23T18:06:55+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/\"},\"wordCount\":1790,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.solar.com\/learn\/#organization\"},\"articleSection\":[\"How Do Solar Batteries Work?\",\"Solar Battery\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/\",\"url\":\"https:\/\/www.solar.com\/learn\/what-is-consumption-only-battery\/\",\"name\":\"What Is a Consumption-Only Battery and Why Is It Being Offered in California? 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