Demand and Opportunity Today for Residential Energy Storage Op-Ed Explainer

By George Kuo

Rooftops covered with solar panels are becoming more common as renewable energy is adopted in the United States.

Rooftops covered with solar panels are becoming more common as renewable energy is adopted in the United States. (Credit: Bilanol)

In the first three quarters of 2023, the installation of residential solar power saw another surge, with growth of 24% year-over-year, according to Wood Mackenzie. Total expected growth for the year was 13%.1

This is on top of 2022 results in which 700,000 United States homeowners embraced the technology.2 Growth is expected to slow in 2024 to 12%, with recovery expected in 2025.

The residential storage market is now experiencing significant expansion, driven by a confluence of factors making battery storage increasingly appealing to homeowners incorporating PV systems.

Residential Energy Storage: An Increasingly Attractive Proposition

The growing frequency of public-safety power shut-offs, exacerbated by severe weather events and grid constraints, has heightened homeowners’ awareness of the vulnerabilities associated with sole reliance on the utility network.3

Concurrently, regressive changes to net metering policies in California have diminished financial incentives for solar energy fed back into the grid. These factors are reshaping the economics of solar power, reinforcing the case for energy storage systems. With utilities offering reduced returns for surplus solar power, storing excess energy allows homeowners to fully capitalize on their solar production financially.4

The Storage Industry Must Address Consumer Requirements

Innovation within the solar industry has yielded compelling solutions that provide homeowners with greater flexibility of and control over their energy usage.

Canadian Solar, where I work, addresses consumer needs with its EP Cube and EP Cube Lite residential battery storage systems. These systems are scalable for indoor or outdoor installation, are user-friendly, and prioritize safety and sustainability.5

These solutions include technologies from enhanced battery chemistry to intelligent power management, interoperability with existing systems, whole-home backup and grid-tied options.

Technological advancements, coupled with government incentives, empower homeowners to maximize the financial benefits of solar energy without incurring substantial costs. Solutions offering seamless integration, advanced intelligence and heightened grid resilience are now accessible to the average homeowner.

The Challenge: Educating the Customer

However, despite steady growth in the residential solar sector, there remains a significant gap in consumer awareness, particularly around solar + storage solutions.

It’s important for homeowners to understand the benefits and long-term prospects of residential energy storage systems.

As homeowners look to industry experts for advice on the best products for their needs, the responsibility of educating them falls primarily on distributors and installers who interact directly with customers. They must become industry experts and trusted advisors.

Sharing the Benefits of Home Energy Storage

Topics to emphasize when explaining the benefits of residential storage options to homeowners include understanding available options, cost-effectiveness, space, aesthetics, expandability, safety and performance.

Here are some key points for solar pros to consider when explaining these advantages:

  • Understanding the options available: Homeowners can choose between full home vs. partial home backup vs. off-grid solutions.
  • Cost: With modular residential energy storage, homeowners can add incremental battery modules to accommodate more loads and maximize capacity.
  • Space and aesthetics: Today’s energy storage units are sleek and compact and can be installed indoors or outdoors.
  • Expandability: Economical self-consumption systems can be installed now and later expanded to include more capacity or backup power.
  • Safety: The most prominent global energy providers develop solutions with safety as the top priority.
  • Performance: Manufacturers ensure that the systems offer overall performance, chemical stability, increased capacity and longer service life.

Safety and Battery Chemistry

Residential battery types and their chemistries have been key discussion points due to their direct impact on homeowners.

Recent incidents in the United States where residential batteries caught fire have raised consumer concerns about battery chemistry.

Presently, residential battery storage systems primarily utilize Nickel Manganese Cobalt (NMC), lithium-ion (LION) and lithium iron phosphate (LFP) chemistries. NMC batteries are a subcategory of LION batteries.

It is important to understand some key differences in battery chemistry. The most significant difference between NMC and LFP is that NMC has a higher likelihood of thermal runaway when compared to LFP.6 Also, NMC technology is more susceptible to catastrophic failure like catching fire. LFP battery chemistry is considered the safer option for residential battery storage systems.7

LFP is a more stable battery chemistry than NMC.8 LFP batteries offer a superior balance of energy density and efficiency, optimized for residential use. Their greater depth of discharge promotes a longer battery lifespan and stable operation.

Compared to NMC batteries, LFP batteries boast a longer lifespan and superior safety due to their stable lithium chemistry, even at higher temperatures.

Environmentally, LFP batteries outperform NMCs, as they contain less toxic materials, minimizing their environmental impact.

Additionally, LFP batteries offer a higher number of warranty cycles and can handle a wider range of temperatures, making them safer for residential applications.

Compared to other LION batteries, LFP is considered safer because of its capability to handle a wider range of temperatures. The operating temperature range for typical LION batteries is 32°F to 113°F, while the operating temperature range for LFP batteries is -4°F to 140°F. On average, LION batteries have a higher probability of catching fire at higher temperatures.

Despite the other LION chemistries having a higher energy density than LFP, it is better to use LFP batteries because of their safety.

Canadian Solar’s EP Cube system utilizes LFP battery chemistry, ensuring minimal risk of thermal runaway and enhancing overall safety.

With homeowners seeking to save money and reduce dependence on utilities, the future of the residential solar market is set for major growth. Continued consumer education is vital to drive market expansion globally in the coming years.

With further consumer education, we should see vast market growth on a global scale in the years ahead. The dawn of a new era in the solar industry is upon us, and it’s brighter than ever.



About the Author

George Kuo works at Canadian Solar Inc. as senior director of product & solutions, product management. He has a master’s degree in computer engineering from the University of Southern California, a bachelor’s degree in electrical engineering from the University of California, Irvine and an executive master’s degree in business administration from the Stanford Graduate School of Business.

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