Mercury Solar Blog

Batteries and their Return on Investment

Clarifying confusions or myths about batteries and how they pay for themselves.

  • 4 August 2016
  • Author: Joseph Wood
  • Number of views: 1863

With HECO’s recent crackdown on the installation of PV systems on homes, Mercury Solar has been inundated with questions about batteries.  As Mercury Solar has over 15 years of experience with installing PV and battery systems, we at Mercury solar have become expert in the different types of solar batteries and their applications.  This allows us to provide our industry-leading 12-year warranty on many of our contracts.  Here, we will endeavor to answer some of these questions.


Battery systems can be broken down to several basics:  types of batteries, best ROI (return on investment), longevity, and availability.  This article will address the types of batteries and the best ROI.  Let’s begin with a few common misunderstandings and misnomers about batteries themselves:


A common term found describing a battery is “Cycle life.”   Some people assume this means the design life of the battery or how many years the battery will last.  This isn’t quite accurate.  The “Cycle life” is the amount of times the battery can be charged and discharged (cycled) while still being able to hold the same volume of charge just as it did when new.  This confusion stems from the fact that “Cycle life” is sometimes measured in years.  The “Cycle life” measurement is more accurately depicted in number of cycles, but as we are working with PV systems (that charge during the day and discharge at night), one day usually means one cycle.  It should be clarified that the “Cycle life” can be altered with abusive use of the batteries.  Design life is usually longer than “Cycle life”.


Another common misunderstanding is the idea that a lithium-ion or lithium-iron battery can be completely depleted.  This can certainly be done with a normal phone or laptop battery, but this can cause problems and trip breakers when applied to house PV battery systems.  This is because household appliances (such as AC units, clothes dryers, refrigerators, etc.) use a large surge of energy when starting up.  When a lithium-ion or lithium-iron battery is almost depleted and an appliance starts up, there is plainly not enough energy left in the battery bank to start up the appliance, and this can result in breakers tripping or the system cycling back over to a grid backup.  Thus, while the chemistry allows for what is called “deep cycling” (completely draining the battery before recharging it), the physics of appliances designed for grid-supplied electricity prevents this.  Some appliances (e.g. new battery-friendly AC units) are designed to not spike on start-up, but these have only come onto the market recently.


The “tried and true” testing occasionally flaunted in advertising for new batteries or systems is primarily the product of controlled laboratory testing, and is rarely based on real field data.  We like to compare this to the EPA mileage estimates on new cars and the fact that it can have little relation to a car’s actual mileage.  In the battery industry, the only real-life long-term data is for good old lead-acid batteries.  Lead-acid batteries (car batteries, essentially) have been used in large installations such as boats and submarines for over a hundred years.


Yet another confusion is the talk of “new batteries” as relates to energy density and weight, or “sleekness”.  Some of the newer battery systems are based on the intention to make the batteries smaller and smaller.  This is emphasis on space conservation is important in vehicles, cell phones, laptops, and other systems where toting around a 1980’s style Carphone just won’t do.  However, for home installations, size is one of the least relevant factors, as once the system is installed and enclosed, the batteries aren’t moving.  Weight and energy density are plainly not an issue when the batteries will be sitting under your house or isolated in a garage closet.  It’s also interesting that even with the largest battery banks, sometimes the inverter and switch gear mounted on the wall can exceed the space taken up by a simple lead-acid battery array.


The final concern often expressed is the danger of fires and fumes with batteries.  Lithium-ion batteries can catch fire if they are punctured, and can emit toxic fumes when burning.  Older, vented lead-acid batteries can cause some toxic fumes if not controlled, but cannot catch fire.  Newer, sealed lead-acid batteries do not emit fumes nor catch fire.  Lithium-iron batteries do not emit toxic fumes nor catch fire.


Now that some of the basic concerns regarding batteries have been clarified, we get into the systems and the costs of the systems.  Let’s go over some of the basic concerns in this area:


The most important concern for our clients, and therefore for us, is how long the system will take to pay for itself.  This is often referred to as the ROI (return on investment).  This has several important factors, such as the battery type desired, the size of the system, maintenance costs, and replacement costs.  The factor with the largest variance ends up being the type of battery used, as exotic batteries presently have high upfront cost; exotics include sealed salt-water, lithium-iron, lithium-ion etc.  The amount of the upfront cost on these exotic batteries can be over five times as much for a conventional or standard battery array.  This ends up being one of the main factors in determining the ROI.


Another major factor when determining the ROI of a system is the current tax credits.  Currently, much of the upfront cost on any PV or PV/battery system is offset with tax credits.  Without these tax credits, the time it takes for these systems to pay themselves off can run to seven years or more, making them unfeasible financially for many.


Even with these tax credits, some of the more expensive battery systems still don’t make economic sense.  The best all-aspect (mechanical and economical) batteries we found so far that meet most of our client needs are the Outback Nano Carbon 200 amp-hour battery.  However, as Mercury Solar is a customer-oriented company, we install the entire range of battery and array types, depending upon our clients’ needs.


We at Mercury Solar strive to design our systems to have a payback (the time it takes for the system to pay itself off) period of less than three years.  This means that usually within three years, our clients are getting their electricity for free.


Our experience and ongoing research with batteries has resulted in interesting conclusions and many satisfied customers.  We would love the chance to show you how much we can help you.

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