Three factors powering the age of the battery

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Contributed by Vincent Ambrose, CCO, FranklinWH | Last year, climate-induced natural disasters created over $2.5 trillion in damages in the U.S. alone. In the age of climate change, the real winner of renewable energy technology is battery energy storage systems (BESS) that provides energy resiliency in the event of a power outage.

However, FranklinWH data revealed that more than half (56%) of Americans aren’t familiar with the benefits of home battery backup systems, yet the majority (73%) agree that solar is a good investment for their homes. Homeowners are open to renewable solutions, they just don’t know enough about the benefits to invest.

That said, batteries are undergoing a major transformation that is powering our technology and energizing the future. In fact, the global battery storage market is estimated to grow between $120 billion and $150 billion by 2030, more than double its size today.

It’s clear we’re in the age of the battery, but there’s still much homeowner education to be done. Let’s explore the three key factors driving home battery storage adoption.

Factor 1: Grid instability

Homeowners in regions prone to extreme weather can significantly enhance the resilience of their homes by investing in solar panels and battery storage systems. Depending solely on grid energy during severe weather events often leaves individuals without power for extended periods, exacerbating the challenges of recovery and increasing the associated risks. Recognizing that climate change contributes to grid instability, the integration of BESS emerges as a comprehensive solution.

These systems serve as a complete home backup strategy, offering unparalleled reassurance to homeowners facing the uncertainties and disruptions brought about by natural disasters. By harnessing solar energy and utilizing advanced battery storage, homeowners can mitigate the impact of grid failures, ensuring a more secure and reliable energy source during critical times.


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Factor 2: Increased electricity inflation

Last year, the U.S. witnessed a noteworthy disparity in price increases, with electricity costs doubling compared to general inflation. This has contributed to widespread confusion among homeowners regarding energy bill rates. However, a shifting landscape is underway as the expenses associated with photovoltaic (PV) and battery installations decline while electricity costs rise. This evolving dynamic is making investments in solar and battery technologies increasingly cost-effective. In fact, the market for batteries is expanding, propelled by the convergence of rising electricity costs, diminishing installation expenses, and the transition of utilities to Time-of-Use (TOU) rate schedules.

The adoption of TOU benefits utilities by aligning with their grid needs, and as this understanding deepens, we anticipate a broader implementation of TOU. This trend is expected to further drive the adoption of battery technology, as TOU schedules allow homeowners to store energy when it’s least expensive and dispense it during peak pricing hours. Moreover, the context of high electricity inflation sheds light on NEM 3.0, where utilities adjusted rates upwards while concurrently reducing the export value of photovoltaic systems, adding another layer of complexity to the evolving energy landscape.

Factor 3: Evolving U.S. Legislation

It’s no secret that policies around solar energy and battery storage are top of mind for our industry. A significant legislative development is the Inflation Reduction Act, which promises $369 billion in funding for clean technologies and the Investment Tax Credit (ITC). The benefit of a full 30% tax credit provides a much clearer path to profitability for homeowners and increases the net present value of their battery system. Moreover, there’s anticipation for an additional 10% boost to the ITC for domestic content, indicating a proactive stance towards supporting local initiatives.

With several states considering net metering changes based on NEM 3.0 in California, a more balanced and efficient approach to production and demand can be expected. These changes could usher in a new era, enhancing grid operators’ ability to manage the grid with increased efficiency. Coupled with the likely nationwide implementation of TOU systems, this reflects a collective effort to adapt and optimize grid management in the face of growing distributed energy resources, encompassing electric vehicles, generators, and stationary storage batteries. The industry is on the cusp of transformative change, poised to work better, faster, and smarter in the evolving landscape of energy practices.

Looking Ahead

There’s still a need for more customer awareness around the benefits of batteries before higher rates of adoption can happen. The convergence of these three factors — grid instability, increased electricity inflation and evolving U.S. legislation — have put batteries at the forefront of technology innovation and will continue to increase their net present value over time. Moving forward, advanced batteries will empower the mobility, energy and electronics sectors and transform how we live. The battery revolution has just begun.


Vincent Ambrose is CCO at FranklinWH.

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