Grid-tied solar vs off-grid Solar: Which is the better investment?
When going solar, you can to choose between grid-tied solar or off-grid solar, or you can have a combination of both: Off-grid when peak electric rates are in effect, and then you draw power from the grid during off-peak hours. If you choose to go grid-tied solar, you’ll remain connected to the grid. You sell the excess electricity your system generates to the power company. If you go off-grid solar, you can cut your ties to the electrical grid (if you want) and live on the energy your system generates. Note that most battery systems remain tied to the grid because the batteries don’t supply enough power on their own to run the home.
Grid-tied solar offers the best return on investment for most homeowners
Many homeowners dream of going off-grid. Anybody who’s paid utility bills for any length of time would love to tell their utility company to pack sand. But the fact is, off-grid solar is a lot more expensive than grid-tied solar, so for the vast majority of homeowners, grid-tied solar makes far more sense. For homeowners in areas with flat-rate pricing, batteries make no financial sense whatsoever.
Why off-grid solar can be very expensive
Off-grid solar is expensive for the same reason electric cars are expensive: The batteries cost a lot! A Tesla Power Wall will set you back around $7,340 for the batteries, inverter, and installation. If you need a lot of power, an off-grid system can get real expensive, real quick. Batteries also have a short life. A Tesla Power Wall is warrantied for just 10 years. Unless you live in an area with electric rates high enough enough to justify them…
Batteries only make sense for time-of-use load-balancing
Time-of-use load-balancing helps homeowners in areas with Time-of-Use electric rates. With Time-of-Use electric rate pricing, the utility company charges more during peak hours and less during off-peak hours. Homeowners with batteries avoid peak rates by drawing power from their batteries during peak hours. They then recharge the batteries either with solar power or from the grid during off-peak hours. Batteries don’t make sense for homeowners in areas that charge flat rates for power. In areas with flat-rate utility pricing, there is no payback for having batteries at all.
Grid-tied solar vs off-grid solar: The breakeven point
The best way to compare grid-tied solar vs. off-grid solar is to compare the breakeven point for both of these systems. The average homeowner with a grid-tied system will break even on their investment in about 7 ½ years.
The breakeven point for batteries is much harder to determine because the main benefit of a battery system is time-of-use load balancing. Even in areas with Time-of-Use billing, a study* by the Institute for Energy Research estimates that the breakeven point on a Tesla Powerwall is 31 to 38 years. That’s more than three times as long as the batteries are warrantied to last for!
Does Freedom ForeverTM offer battery systems?
Yes. Freedom Forever offers batteries that make sense for homeowners that are facing high TOU rates in the evening. Our install team can plan a battery system that meets your needs and solar power system size. If you have questions about whether you are affected by high TOU rates, give us a call. We can answer your questions and tell you how Freedom Forever can help.
* IER. How long does it take to pay off a Tesla Powerwall? Institute for Energy Research. 5 January 2016.
Web. 27 December 2018. https://www.instituteforenergyresearch.org/the-grid/payback-on-teslas-powerwall-battery/