Sponsored by Omaze. As good and cheap as
solar and wind power are for generating clean electricity, the intermittency of their power
generation creates a problem. You generate too much energy when you don't need it,
and don't have enough energy when you do need it. That's why energy storage is key
for a future built on renewables. We have the technology available today to build out massive,
grid scale energy storage systems using lithium ion batteries, flow batteries,
and pump hydro storage systems, but the logistics around building those can be slow and costly.
There's a potentially faster way to build out large scale energy storage ... do it virtually.
About a year ago I had a Tesla Powerwall installed at my house. Not only has it been helping to
stretch my solar power generation into the night, but I've been participating in a virtual power
plant system with over a thousand other homeowners in my area. Let's take a look at my experience
with my Powerwall and if virtual power plants can be a viable path for the future of energy storage.
I'm Matt Ferrell ... welcome to Undecided.
So about a year ago I had my Tesla Powerwall installed, which I did
a video on that detailed my installation experience. If you haven't seen that video,
I'd strongly recommend checking it out because I'm kind of the poster boy for what not to do.
Bottom line: I had a horrible experience with my installer. However, not too long ago I had
a Span smart electric panel installed, which I also have a video on if you're interested,
and they helped to clean up and fix all of the Powerwall installation problems that I had.
Since November of 2020 my Powerwall has been helping to shift a decent amount of my excess
solar production into the evening and some of the night. I only have one Powerwall,
which isn't enough to contain all of my excess production during the summer,
so I'm still exporting a large amount of electricity back into the grid.
In my area I have full net metering, which gives me a 1 to 1 payback. For every kWh I put into the
grid, my utility wipes off 1kWh of use from my account. Each time I mention this, I inevitably
get someone who doesn't live in my area commenting that I'm mistaken about that ... and I'm wrong,
which I find funny. They typically reference what net metering pays back in their area.
It's not a universal credit, so you've got to look into it for your area. Mine is one to one.
I get 100% of the value back, which in essence makes the grid act like a giant battery for me,
cost-wise. That actually makes home batteries look like a bad return on investment in my area.
And that brings up the giant question of why someone would want to go through the trouble
of getting a home battery installed. Is it worth it? The answer to that is going to vary
based on your goals, but that basically boils down to a combination of three motivations:
saving money, environmental concerns, and emergency backup & energy independence.
You may only care about one of those three motivational buckets, or all three,
so you have to evaluate this based on that. For me, I'm most concerned about the first two,
but don't want to break the bank doing so ... so the money angle is still somewhat a part of it.
Which brings me back to net metering. If I did receive a partial net metering rebate,
like a lot of you have brought up in comments on previous videos, like a utility only paying
me wholesale prices for each kWh I put into the grid, then a battery would start working its price
off by getting me back the full value of each kWh (including the lost delivery fees) by holding onto
the energy for myself. We also don't have time of use rates in my area, which is another way
home batteries can help pay for themselves. This helps you pay for electricity from the grid when
it's cheap, like in the middle of the night, and use electricity from your battery when the grid
is most expensive, typically in the evenings. Again, in my area ... this is another knock
against a battery investment. From a pure cost perspective, I get no financial gain from time
shifting my energy use or hoarding the electricity generated from my solar panels for myself.
But that's where virtual power plants come in.
But before I get to that, how would you like to support an amazing charity with an opportunity
to win a $4.3 Million Los Angeles dream house? Today's sponsor, Omaze, is running a fundraiser
for the charity, Rebuilding Together. They're devoted to repairing the homes of veterans,
people with disabilities, and neighbors with low-incomes to help keep our communities intact.
Rebuilding Together has helped to revitalize entire neighborhoods, improve parks,
schools, and community centers. They've also been involved in helping with recovery efforts after
natural disasters. It's a great charity that's making a meaningful difference in people's lives.
Donate $10 and you're automatically entered for the chance to win the big prize,
which is an insane 5-bedroom, 6-bath, $4.3 Million home in Los Angeles. It has
everything including an in-home movie theater, pool, and basketball court.
Oh ... I almost forgot to mention the putting green. This house has everything you can dream
of for a house that's also located in the center of entertainment, Los Angeles. You
have the option to choose a multimillion-dollar cash prize instead, but this house looks amazing.
Enter for your chance to win this $4.3 Million dream home in Los Angeles and support the
fantastic charity, Rebuilding Together. Go to https://www.omaze.com/mattferrell. Thanks to Omaze
and to all of you for supporting the channel. Now back to where virtual power plants come in.
In New Hampshire, Massachusetts, and Connecticut there's a program that's
available through National Grid and Eversource, my utility. Homeowners who
have home batteries or inverters from Enphase, Generac, Sol-Ark, SolarEdge, Sonnen, and Tesla
can enroll in the Connected Solutions program. You may have seen or heard of similar programs
like this springing up around the world. One of the first ones I heard about was Tesla's virtual
power plant system they set up in Australia. Just recently Tesla announced that they're expanding
that system. By linking together thousands of smaller home batteries using software,
they can create one massive virtual battery. None of the test VPP systems that I found rival
the largest purpose built grid scale batteries out there. For instance, Tesla's Hornsdale Power
Reserve can supply 150MW of power, while many of these VPP systems are currently only a few MW.
In my area, there are 1,264 systems enrolled in the Eversource Connected Solutions program.
When you sign up, you're allowing the utility to use your battery for load shedding,
which helps in moments of peak demand. The program's in effect during the summer months,
between July 1st and September 30th, when electricity use is the highest.
Each event can last up to 3 hours and will fall between 2:00pm - 7:00pm. They limit
the number of events per participant to 30-60 per summer. And the incentive is that you'll
receive $225 per the average kW your system provided into the grid. Not kWh, but kW.
In my case I have one Powerwall, which means I'm contributing a max of about 5.8 kW,
so obviously my average will be somewhere below that because it's going to fluctuate
and I'm drawing from the battery at the same time. They only take excess capacity that my home wasn't
using at the time. If my house was pulling 2 kW for itself, then they can only pull about 3 kW,
which hits my single Powerball's capacity. This past summer I saw 34 events in my logs.
If you're curious what this looks like, here's one from July 20th. You can see how my battery
hit 100% charge from my solar panel production at around 11:00am. The rest of the afternoon my house
was running completely off of solar power with some excess going off into the grid. Sometime
before 5:00pm my battery starting discharging whatever I wasn't currently using at the moment.
It worked out to about 3.4 kW of power output for this session. Again, not kWh, but kW output.
By about 7:00pm the event was over and my battery went back to normal operation.
That meant sitting at its minimum charge level, which I had set to 20% during the summer. Overall,
we never noticed that any of this was happening in the background day-to-day over the summer.
Based on the averages I've seen cited, you can probably expect around $1,000 paid out for a
single Powerwall, minus Tesla's cut they take to manage the program. I've received one check
so far for $772. My Powerwall will be part of the system for 5 years, so I may end up getting around
$4,000 total once the program is over. Given that a single Powerwall currently costs about $8,500
plus installation, this isn't going to pay for itself. But it's a decent dent into the cost of
the system. The more battery capacity you have, the more you can earn. If I had two Powerwalls,
the payback could end up covering one full Powerwall plus a little bit of the second.
I asked Eversource how the system performed this year in my area. Like I mentioned, there's
1,264 homes participating, which ended up providing 2MW of load shedding to the grid.
And there was an average of 5kW load shed per battery installation. That means an average
payout of $1,125. What I find interesting is that Sonnen battery owners get the full amount,
but Tesla Powerwall owners end up losing a small percentage to Tesla for maintenance fees.
The most interesting part of this particular program is that it was created by the utilities
in an effort to save themselves money, and the payouts are coming from the benefits the program
provides. Pilot programs like this have shown a lot of promise. Green Mountain Power launched
a similar program in Vermont that paid back in a big way. In 2018 the network of batteries reduced
consumption during New England peak hour, and saved about $600,000 in capacity fees.
In 2019 after adding more batteries to the system for about 10 MW of capacity,
it saved about $900,000 from a single hour of operation in a late July peak. So you can start to
see why utilities are willing and able to offer to pay customers to contribute to systems like this.
In fact, National Grid in Rhode Island offers $400 per kW during summer events in
the Connected Solutions program. Almost makes me want to move to Rhode Island ... almost.
And in Massachusetts, if you install a battery and solar panel system under the new SMART program,
you can be enrolled in the SMART battery adder, which will pay you an additional amount of money
based on the size of your solar panel system. For instance, if you have an average system
of 8 kW here in Massachusetts, you could be paid an additional $237 to $732 a year.
And it pays out over the course of 10 years, which means an additional $2,000 - $7,000 on top
of the VPP program. So in my area it may not make sense financially speaking for time
shifting energy use or net metering shortfalls, but through those other incentive programs you
could erase an additional $6000 - $12000 for a single battery, depending on your solar
panel and battery capacity. That's in the realm of covering the cost of the battery and installation.
But all of that brings me back to those three main motivations: saving money, environmental concerns,
and emergency backup & energy independence. As I just went through, cost-wise in my area,
you could make a battery make some financial sense depending on your specific setup.
For environmental concerns, it makes perfect sense to maximize your solar production to try
and reduce your home's carbon footprint. And by participating in programs like
virtual power plants, you're helping your local community by reducing the need for dirty coal
or natural gas peaker plants spinning up as much. And because of your battery storage,
you're helping to reduce the effects of flooding the grid with too much renewable
energy in the middle of the day when it isn't needed. That helps maintain a healthier grid.
That last area of energy independence and emergency backup is a little trickier.
It's all about what you're willing to pay to achieve those goals. It's about quality of life.
When I've talked about blackouts in previous videos, a lot of folks,
mainly in Europe, leave comments asking if blackouts are really that bad here.
It really depends on where you live. I'm in the northeast of the US and we have a pretty old grid
infrastructure, which is mainly power lines above ground on telephone poles. We sometimes
get hurricane force winds with winter nor'easter storms. Freezing rain or very heavy snow that can
stick to the lines and weigh them down. Or falling branches from trees that take out the power lines.
In my area, it's not that bad, but does happen once or twice a year at most.
In fact, since I've had the Powerwall there have been three blackouts. Two were under 5
minutes and the third lasted for about 2 hours. With the Powerwall we barely noticed. I have
friends a few towns away that have the power go out half a dozen times in the winter. It really
depends on where you live. I know families that have installed natural gas or diesel generators
for whole home backup that cost thousands of dollars. And they serve only one purpose,
electricity in a blackout. Batteries can do that plus save you a little extra money along the way.
So do I think it's been worth it for me. Yes, but I've got a special case here.
My Powerwall was part of the Tesla Referral Program, so I only paid for installation.
But my wife and I are actually in the process of building a new home, which we'll be moving
into in about a year or so. (Fingers-crossed.) For that house, I'm 100% going to be installing
solar panels and a battery system. In fact, I want a bigger battery system than I have here.
So I'll be putting my money where my mouth is. In my area and for my motivations,
it's a big yes. But you'll have decide that for yourself.
And if you're interested in researching solar panels and batteries for yourself,
I'd strongly recommend checking out Energysage as a great resource. They have great articles and
reviews of products and you can use Energysage to find a local installer. I used Energysage to find
a solar installer on my current home and loved the experience. After that I joined their affiliate
program, so if you live in the US, you can use my portal to get free quotes from local, reputable
installers in your area. Check out the link in the description. So far there's been over 5 MW
of solar installed through my portal. That's like taking over 18,000 cars off the road. I love that.
So what do you think? Would you want a battery for your home? Or would you want to participate
in a virtual power plant system like this? Jump into the comments and let me know. And thanks
as always to my patrons and a big welcome to new supporter+ member David Sprong, and new producers
William Van Vechten, Jim Nyhus, Russell Overland, Joel Welter, and Michael MacLachlan-Brown.
All of your direct support really helps with producing these videos and helps to reduce my
dependence on the almighty YouTube algorithm. Speaking of which, if you liked this video
be sure to check out one of the ones I have linked right here. And subscribe and hit the notification
bell if you think I’ve earned it. Thanks so much for watching and I’ll see you in the next one.