Path-Q Solar
Can a battery have a reasonable outage value but a poor financial return from bill savings?
Answer
Yes. A battery can provide meaningful backup power or resilience while producing a weak bill-savings return if rate differences, demand savings, export limits, or cycling opportunities are insufficient to justify its cost. Resilience and bill savings should be valued as separate benefits.
Key points
- Outage value depends on the loads supported, outage frequency and duration, and the cost of disruption.
- Bill savings depend on usable capacity, charging source, rate timing, demand charges, and dispatch performance.
- Backup reserve can reduce the capacity available for routine savings.
- A battery may be reasonable as an insurance-like purchase even when its financial payback is unattractive.
What it depends on
- Critical loads and required backup duration
- Outage history and disruption consequences
- Rate structure and load profile
- Battery cost, life, and financing
- Value assigned to resilience
Risks and trade-offs
- Assigning an unsupported dollar value to resilience can make returns appear better than they are.
- A battery sized for rare long outages may be financially inefficient for daily bill savings.
- Maintenance, replacement, degradation, and emergency reserve settings can reduce savings.
Information you may need
- Critical-load list and backup-duration requirement
- Outage frequency and business or household disruption cost
- Hourly load and rate data
- Battery proposal and warranty
- Separate bill-savings and resilience valuation
Your next step
What to do next
Evaluate two cases separately: battery economics from bill savings alone and the maximum amount you would pay for the desired outage capability.
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