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Energy Storage

Why Energy Storage ?

In April 2023 the California Public Utilities Commission (CPUC) sided with the utilities and approved their demand for a change in the Net Metering program. This updated Net Metering program is referred to as "NEM 3.0."

NEM 3.0 changed significantly how the excess energy from a solar energy system is being valued when send back to the grid. The value of each kWh made available to the utility is now based on the energy market and the wholesale value of each kWh. This resulted in a reduction of almost 80% of the value the solar system owner received from providing extra energy.


This affects new solar system owners as well as those "ageing out of" NEM 1.0.

To counteract this, energy storage is the logical conclusion. Instead of sending the energy back to the gird for pennies, the excess energy can be stored in a residential energy storage system and used when the solar is not producing or when the cost of the kWH is high.  This has several benefits:  a)  you get full retail value for each kWh stored in the battery and avoid kWh-related charges from the utility; b) you can use the energy from the battery during high-tariff peak times; c) the energy used at night from the battery provides relief to the grid during high usage times; d) less reliance on the grid and available energy during power outages.


The energy storage system is eligible for a 30% Federal Tax Credit.

The connection between the solar panels and the energy storage system can either be alternating current (AC) or direct current (DC).  

PV modules will produce DC power. That power must be converted to AC to be used in most commercial and residential applications. In contrast, battery cells must be charged with DC and will output DC power. 

So what’s the difference between AC-coupled and DC-coupled for solar-plus-storage, and which is the better option? Let’s find out.



In an AC coupled system, power from the PV modules is converted to AC prior to connecting to the ESS (Energy Storage System). In other words, the output from the PV modules is fed through an interactive (solar) inverter before it reaches the ESS. This means that the power must be converted to DC before charging the ESS, and any power output from the ESS must be converted once again to AC. To achieve this, an additional multimode (battery) inverter is required.  This 2nd inverter in most cases is included with the battery pack.


There are two different methods when it comes to connecting a solar system and an energy storage system.  (Most homeowners do not have a preference and the installer chooses the system that is most appropriate for the site or the budget.)



DC-coupled battery system requires the use of only one inverter. This is a more specialized piece of equipment than the inverters used for AC-coupling, as it is a hybrid inverter used for both the battery and the solar panels

DC output power from the PV modules can directly charge the ESS. No DC-to-AC conversion is required between the PV array and ESS. 

More & more manufacturers now offer the DC-coupled version to reduce the number of components that need to be purchased.


For more information, please click here

Credit: Lucas Miller / Mayfield Renewables, Corvalis, OR

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