Why build residential batteries?

Electricity storage is a key component of almost any reasonable pathway to net-zero greenhouse  gas emissions. BloombergNEF models a pathway to take the world to net-zero emissions by  2050, using solar, wind and battery backup (Figure 3). This requires 722GW of batteries to be  installed worldwide by 2030, up from 36GW at the end of 2022, and 2.8TW of batteries by 2050.

Residential batteries are expected to be a major contributor to the storage capacity needed to  shift electricity demand to timeslots of high renewable electricity generation.  At the household level, the battery charges in the daytime when solar power is generated in  excess, and discharges later when there is typically higher demand. These charge and discharge  patterns benefit customers that want to increase their solar self-consumption. They can also lower  consumer bills, assuming that consumers are on time-of-use tariffs. The benefits of these charge and discharge patterns translate to power markets by flattening out  the overall load or the ‘duck curve’ which emerges at high solar penetrations (Figure 4). Examples  of this ‘duck curve’ already exist in many markets like Hawaii and California in the US, South  Australia, and even on a sunny day in the Netherlands or Spain.

Residential batteries also have some important benefits for local grids, helping to resolve  challenges presented by rapid growth of distributed energy resources such as residential solar  and electric vehicles (EVs).  Thousands or even millions of residential solar systems and EV chargers will connect to grids that  were not built to support high instantaneous loads like EV charging or electricity flowing in the  opposite direction when residential solar systems send power back to the grid. In Hawaii for  example, reverse power flow occurs in more than half the substations.  As these local grids become congested and strained, grid operators need to find new ways to  manage voltage and thermal issues or upgrade the grid to avoid future ones. One alternative for  grid operators making large investments in the grid is to use flexible distributed energy resources  like residential batteries, though the structures for compensating owners for providing flexibility In a future where flexible distributed energy resources play a more active role in supporting the  grid, residential batteries could have an advantage over other flexible distributed energy resources such as electric vehicles, smart heat pumps and grid-connected thermostats.  Residential batteries do not require consumers to actively change their behavior and adjust  comfort in the home if the grid requires such a change during critical hours. Batteries can be  programed to automatically respond and discharge, while changes to other distributed energy  resources in the home may lead to minor changes in home temperature or travel patterns, or  adjustments to the schedules of individuals. 

Policy decisions about how to support residential battery uptake should consider these benefits to  the wider power system in addition to benefits to individual customers. Even though  residential batteries today may not provide a clear economic benefit to the individual, they should  be an essential part of long-term planning and can play a key role in decarbonization.