10 Mistakes I’ve Made Selling and Installing Battery Storage Systems

Upcoming electric rate changes in parts of the U.S. mean that almost every home and business here will eventually benefit from a battery connected to their solar system.

These combined systems provide tangible economic benefits: time-shifting energy use, energy arbitrage, preserving the benefits of net metering and demand-charge reduction.

But surprisingly, the vast majority of residential customers are installing battery storage systems for emotional benefits: backup power and cutting their utility ties. Just as it was in the early days of the PV industry, it is challenging for contractors to correlate these economic and emotional needs of customers with the practical realities of currently available (and reliable) battery storage systems.

As our company got back into the energy storage business with lithium-ion batteries, we did extensive research into battery systems and their compatible inverters, into manufacturers, into software and operating modes, and into the interconnection and incentive process.

In spite of our efforts, we encountered a wide range of challenges on our first few installations. There were relatively minor learning experiences such as finding the best ways to transport and mount a 200+ pound battery, streamlining a battery structural permit, and ensuring the battery doesn’t die before being interconnected. And there were major (expensive) learning experiences such as discovering that the battery cannot provide the startup current for even a relatively low horsepower motor (such as a well pump or small air conditioner).

The good news is that we are encountering zero safety issues with regard to residential lithium-ion battery installations. Popular systems on the market are UL 9540 listed, and are equipped with safety features that make it almost impossible to short the battery and create a fire.

In many regards, batteries are safer to install than rooftop solar. Anecdotally, the only safety incident of which I am aware occurred when a battery fell on someone’s foot.

After almost two years of selling and installing battery storage systems, we are still learning. To help you avoid some of the mistakes we have made (and continue to make), I’ve summarized 10 of our most systemic and painful battery installation mistakes.

1. Misundertanding customer desires

When you use the word “battery,” people assume you are providing power during a blackout or when the sun is not shining. Customers expect that their battery system will provide backup power.

However, virtually every residential lithium-ion battery storage system was originally positioned as a way to help customers save money by time-shifting or arbitraging their solar-generated energy. Unfortunately, many of these early systems did not provide the backup power that customers desired, and at the same time did not provide compelling economic benefits.

So back to the drawing board for some of these early vendors, and kudos to the ones that provide the backup power that customers are willing to pay for now.

2. Incomplete product offerings

There are a number of companies that sell excellent UL-listed batteries and battery subsystems. But these systems won’t work as expected without an inverter, communications, software and supporting electrical equipment (not to mention a qualified contractor to install and maintain them).

Moreover, these components must be tightly integrated, ideally by the inverter manufacturer. It is virtually impossible for a contractor to install a code-compliant battery storage system unless there is thorough integration between the battery subsystem, the inverter, and the software that makes it all work together.

As a result, manufacturers that provide (or control) both the inverter and battery have an advantage when it comes to installation and operation simplicity.

3. Underestimating support and maintenance costs

Many of the early PV systems that I installed included batteries and provided backup power. These systems used lead-acid batteries and charge controllers connected to a battery-compatible inverter.

They worked, but required close monitoring of the battery’s state of charge and fluid levels (you can identify old-time battery installers by the acid holes in their jeans).

New lithium-ion battery systems are virtually trouble-free; however, the inverters and communications systems to which they are connected may need modifications and upgrades as new features are added, as customers make changes to other equipment, and as utility tariffs change.

Contractors must budget for these unexpected support costs to maintain good customer satisfaction levels.

4. Adding batteries to existing systems 

Battery upgrades will eventually be a large percentage of a solar contractor’s business. However, authorities having jurisdiction (AHJs, or city building departments) require building permits for a battery addition. These permits add significant costs, but also provide increased safety.

Some AHJs have restrictions on permissible battery locations and clearances from existing equipment. Depending on the system design, the inverter and PV wiring may need to be upgraded, and warranty provisions for the existing PV system may be need to be transferred to the new contractor.

5. If the CTs don’t fit, you’re in deep sh-t 

With apologies to Johnnie Cochran, some existing service panels do not have room for the addition of current transducers (CTs). Whole-house metering — an integral part of many battery storage systems — will therefore not be feasible. Check with your battery storage system supplier to make sure it has a solution for this problem; one alternative is a flexible CT (also referred to as Rogowski coils).

6. Complicated backup panel wiring 

Since the total power output (kilowatt) and total amount of energy stored in the battery (kilowatt-hour) are limited, when there is a blackout only certain appliances in the house can be powered.

Circuits feeding these appliances must be rewired into a backup (or critical load) subpanel. Wiring these subpanels is expensive.

These backup subpanels are generally limited to four to six ordinary circuits (not air conditioners or large motor loads). Powering more circuits than is recommended, or trying to power large appliances, will likely lead to an unhappy customer the next time the power goes out.

7. Buggy software and firmware

Dynamic operation of storage systems requires that system operating characteristics may need to be changed depending on utility and customer needs.

We’re not just installing hardware — there are hundreds of megabytes of software and firmware that controls these battery storage systems. In this regard, batteries are similar to just about every smart appliance in our home: They require software and firmware upgrades to fix problems and add new features.

Not only must contractors have IT-capable people on their staff, but they must also budget for these software support costs.

8. Interconnection problems

For some unfathomable reason, many utilities make it needlessly difficult and time-consuming to interconnect a simple battery to a PV system. A contractor’s first battery system interconnection is likely to take months.

To simplify this process, confirm that every critical component in the battery system has been approved for interconnection by your utility — you don’t want to be the first one to go through this process with new equipment. Plan on even more time when a battery system is added to an existing solar system since some jurisdictions may require repermitting the existing PV system and wiring upgrades if a new inverter is installed.

9. Incentive delays

Battery incentive processes run the gamut from a single-page form to a 1.5-inch thick manual.

Issues caused by multiple hard-copy and web-based forms, special performance reports, inspections and bureaucratic hostility can delay a customer’s receipt of the incentive payment for a year or more. The value of the battery incentive may be less than it costs to apply for and receive the incentive itself.

As with interconnections, you don’t want to be the first to apply for a rebate on a new battery storage system. For cash-flow reasons, it is a good idea to have the incentive paid directly to the customer.

10. Battery warranty claims

Will your battery supplier be able to support the battery warranty for its full term? If the battery fails, will they pay for a replacement, including labor? If all their batteries fail, will they stay in business? This is one battery system mistake that I have managed to avoid so far, although I have had this issue with defunct module and inverter companies.

In addition to avoiding these 10 systemic mistakes listed above, here are some general recommendations for new battery system installers.

• First, talk to other contractors to get an idea of the systems that are reliable, that have made it through the entire interconnection and incentive process, and offer contractor training.

• Second, spend extra time to set customer expectations, particularly when it comes to the battery’s power output and backup duration.

• Finally, you may want to add your customers’ phone numbers to your contact list because you are likely to hear from them again — either when the battery doesn’t work in a blackout or, on a positive note, when there is a blackout and they are the only house in the neighborhood with the football game on TV.

***

Barry Cinnamon is CEO of California's Cinnamon Energy Systems.

How much battery storage you need

If you just want to back up a few critical loads, your solar battery cost will be on the lower end. If you're looking to back up your whole home or go off-grid, expect to pay a lot for battery storage. We're talking $80,000 to over 100,000 in some cases.  

Compared to solar panel systems, batteries are a bit less customizable in terms of size. It's usually pretty easy to add or subtract a single solar panel to get the ideal system size. It's more challenging to fine-tune the size of the battery, though this is improving. Some companies today offer very modular options for more flexible configurations. 

Your battery's inverter

Batteries store direct current (DC) electricity, but your appliances use alternating current (AC) electricity. You need an inverter to convert the DC electricity stored in your battery to usable AC electricity. Some batteries come with a hybrid inverter that also works with solar or a storage-specific inverter. If yours doesn't, you'll need to purchase one separately. The inverter could add a couple thousand dollars to your system cost. 

If you already have solar or not

Energy storage installations require significant electrical work. If you install storage at the same time as your solar system, you save money by getting the electrical work completed simultaneously. If you retrofit a battery to an existing solar system, you'll pay extra for labor, wiring, and in some cases, equipment.

If you need to upgrade or add a new electrical panel

As we said, big storage projects cost a lot of money. Most home battery systems today aren't large enough to cover all your electricity usage. This means you need to put specific circuits onto a critical load panel. A critical load panel functions like a secondary electrical panel. On the panel, you include the essential circuits that you want to remain energized in the event of an outage. 

While the critical load panel itself isn't costly, the electrical work required to install one can add up. Some battery companies today offer load management devices that make critical load panels unnecessary. If you have or choose to install a smart electrical panel, you also won't need a separate critical load panel for your battery.