As the solar industry has grown in recent years, and as extreme heat waves continue to hit the region, homeowners have energy on the mind.
Solar power has been a hot commodity for some time, but home battery systems are starting to accelerate in use and in advantage.
California changed its Net Energy Metering, or NEM, 2.0 system in mid-April to further incentivize home battery systems. While NEM 3.0 reduced incentives for solar power significantly, it also established a stand-alone 30% federal tax credit for battery storage systems and includes $900 million in incentives for pairing them with solar.
With this economic push from the state, it’s an advantageous time to work in the home-energy industry. One example is climate technology company Haven Energy. Based in Sawtelle, Haven acts as one-stop shop to guide homeowners through the process of selecting, financing and installing home battery systems.
Filling solar’s gap
Vinnie Campo, co-founder and chief executive officer of Haven, said that the company’s clients generally are in their “forever home,” and many already have solar power.
“A lot of folks, when they install solar, they don’t realize that they (can) still have a power outage unless they add a battery,” Campo said. “It’s a lot of homes that have taken that first step, that are trying to get some energy independence, and then realize that there’s a little bit more to do. That’s where we come in, to be able to help fill that gap.”
UC Berkeley professor Severin Borenstein, who is also the faculty director of the Energy Institute of the Haas School of Business, said these systems have two advantages. The first is reduced stress on energy distribution grids by providing a place for energy to be stored. He said it also means that houses can continue powering themselves for quite some time in the case of a power outage. While solar is a valuable resource, once the sun goes down it stops working.
Campo founded Haven in 2022 with Philip Krim, now an adviser, and Jeff Chapin, who is now chief product officer. The company evaluates a client’s needs and a home’s geographic location, size and whether it already has solar panels. It then recommends battery-system configurations, such as battery size and energy-storage capacity. Haven performs a site survey to plan installation, sets up any necessary paperwork or permitting and then connects homeowners with qualified, Haven-vetted electricians. The company recently announced a $4.2 million seed funding round, which was led by Lerer Hippeau and Giant Ventures.
Timing energy consumption
Being able to store power for later use can have significant financial benefits. One way that energy providers improve grid efficacy and balance supply and demand is through so-called time of use, a pricing system for electricity used to encourage consumers to reduce usage during peak times. Energy typically is cheapest at night, or during the first half of the day when solar energy is at its highest; it then peaks in price in the evenings when more people are running electricity at home. Home battery systems allow homeowners to store energy in reserve during low-price periods and use the stored energy during price peaks.
Borenstein said the real value of backup systems comes not from avoiding time-of-use peaks, but from the NEM rules. While improving incentives for battery systems, the current version of the rules also decreased the value of exporting unused solar-generated energy back to the grid. Battery systems allow this power to be stored for a consumer’s personal use.
“If you can keep the power that you generate behind the meter, and then use it when you need the power, you can save a huge amount of money,” Borenstein said. “You get the full retail value out of it for yourself because you’re crowding out power that you otherwise would have had to buy from the grid.”
When working with Haven, customers pay for 60% of the project’s costs before planning and installation and the remaining 40% after the final inspection. Haven earns its revenue after serving as a middleman to pay manufacturers, installation workers and permit companies.
Campo said that the cost of a battery system varies depending on how many batteries are needed and how much backup power the homeowner wants. He said batteries start at about $19,000, and each additional battery costs about $10,000. However, with the NEM 3.0 incentive, the initial battery will cost homeowners around $13,000.
This is still not inexpensive, and the length of time it takes to have a battery system pay for itself through energy savings may be why Haven mainly sees clients that are in their forever homes. According to online home-energy marketplace EnergySage, a battery system will pay itself off in about five years, depending on incentives available, whether it’s coupled with solar power and the current cost of energy. Campo said that its batteries are guaranteed to last a minimum of 10 years and come with a warranty for that length of time, and will likely last much longer than that.
One reason homeowners may splurge on a battery system is for peace of mind rather than energy savings: as climate-related weather events have risen in recent years, Borenstein and Campo agree that backup power systems give homeowners a sense of security. The Public Health Institute said that, between 2010 and 2019, the hottest decade on record, at least 599 people in California died due to heat exposure, with some analysts saying that toll could be as high as 3,900.
“I have two little kids and we have a battery in our house,” Campo said. “Peace of mind is probably the best way to put it, especially living somewhere where there are frequent power outages (and) where there are pretty extreme temperatures. Knowing that if that were to happen that you don’t have to leave the house or evacuate … that’s a very powerful thing.”