Hybrid inverters can future-proof solar+storage installations

A Sol-Ark inverter+battery solution for grid backup only. Credit: Sol-Ark

Inverters are the electronic heartbeat of a solar system, connecting solar arrays to the grid and increasingly, to battery storage. As utilities continue to shift rate structures in ways that often harm grid-tied residential solar customers, inverter manufacturers are working to make battery integration seamless.

Solutions described as “battery-based” or “hybrid” inverters are becoming more common across the manufacturing sector. But what do these terms actually mean?

Sol-Ark manufactures both inverters and batteries and calls its solution a “battery-based inverter.”

Tom Brennan, engineering manager at Sol-Ark, said that most inverters in home installations are grid-tied string inverters. They don’t work with batteries, but instead have to sell all the power they produce back to the grid.

“A battery-enabled inverter, or battery-based inverter, is something that can do a lot more than just sell back power to the grid,” Brennan said. “It can store power, it can work off-grid, it can store power for time-of-use [rate structures].”

Battery-enabled inverters differ from traditional inverters because when there is a grid outage, standard inverters must shut down completely per Rule 21, while hybrid inverters connected to batteries can simply switch to an off-grid mode temporarily and continue to power the home.

“I think the real story here is that inverters are doing a lot more than they ever have,” said Jeremy Niles, marketing manager at Pika Energy.

They’re doing more for a number of reasons. Perhaps the biggest is as states and utilities shift away from net metering, solar customers are getting less credit for selling power back to the grid. Combining a hybrid inverter with even a small amount of battery backup can allow homeowners to self-supply power, avoid demand charges and peak time-of-use rates and still get high value for solar systems despite shifting state policies.

Time-of-use rate programs like in California charge customers higher rates for electricity used during what utilities determine are “peak” periods of the day (when power consumption is highest and solar production is low) and lower rates during off-peak times when consumption is lowest and solar is supplying plenty of power to the grid.

Solar customers with hybrid inverters paired with batteries can choose to store power during the peak solar production times in the afternoon and consume that power in the evening, when electricity costs are highest.

“Battery-based systems are exploding because they can do time-of-use shifting and get around these solar restrictions,” Brennan said.

Pika’s inverter+battery solution. Credit: Pika

Other utilities incorporate demand charges when customers consume energy above a certain number of kilowatts.

“In a lot of scenarios, that demand charge can make up the majority of someone’s bill,” Niles said.

Hybrid inverters paired with batteries can help avoid demand charges by storing solar energy during high solar production times, then be programmed to self-supply power from the battery instead of buying power from the grid once the house consumes a certain amount of energy. That way, the home never crosses the high demand threshold and is not charged the extra, sometimes exorbitant, fees.

Pika Energy’s Islanding Inverter is one solution that can perform demand management for customers.

“[Customers] will set the system up so that should they get close to getting that kind of demand on, the system will kick in and ease that demand, meet that demand using battery power or solar power, to prevent that demand charge from being applied to their bill,” Niles said.

Tabuchi Electric’s hybrid inverter can also be programmed to avoid both demand charges and peak times. The inverter software can be customized to satisfy different market requirements. For example, in California, Tabuchi’s inverter is customized with an “economy mode” to use stored power during peak time-of-use periods, and in Hawaii the inverter has a “customer self-supply mode” to help customers use all the solar power they produce, since they cannot sell it back to the grid.

“Each of those markets has its own advantages and disadvantages, and we try to come up with operation modes that can be unique for each market,” said Tanvir Khan, research and product development engineer at Tabuchi. “We try to make it flexible so that one solution has all these operation modes.”

Tabuchi’s Eco Intelligent Battery System (EIBS). Credit: Tabuchi

Tabuchi’s hybrid inverter+storage solution is sold as one package called the EIBS (Eco Intelligent Battery System).

Since utility rate design and state solar policy is ever-changing, Tabuchi has the ability to upgrade its inverter software remotely at any time. Khan calls this making inverters “future-proof.”

“The definition of future-proof is that whenever the utility changes their utility rate demand or anything they try to make more complicated with solar panels, the battery can come into play because that’s the free variable,” Khan said.

Including storage and battery-ready inverters in new installations could soon become even more fruitful than simply avoiding peak time-of-use rates and demand charges. With SEIA leading the way, solar+storage advocacy groups are pushing for nationwide incentives for adding batteries, like a federal investment tax credit for energy storage.

California leads the way with storage incentives at the state level with its Self-Generation Incentive Program (SGIP) that gives customers rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter. The California Solar and Storage Association is pushing for the SGIP to be extended for another five years in the form of SB 700, which was passed by the California Assembly at the end of August.

Understanding the terms

Credit: Pika

Although inverter manufacturers use verbiage like “islanding,” “hybrid” or “battery-based” inverters, the inverters are still separate from batteries in most applications except the Tesla Powerwall 2, which integrates an inverter+battery in one case, and some others.

“The industry trend is not necessarily putting the battery and the inverter together like Tesla. Instead it’s having the right-size battery bank and inverter so that you’re primarily using solar power and stored solar power throughout the day and night and the grid is basically a backup,” Brennan said.

Many battery-based inverters don’t require a battery pairing from the start. If and when customers decide to add a battery to their solar installation, all the infrastructure is already in place to plug and play.

That flexibility can be very helpful as new renewable energy requirements and policies take effect in different states, like the mandate of solar on all new homes in California. Homebuilders can install energy storage to reduce the amount of PV they must install or offset other efficiency requirements. If builders choose to just install solar and not storage on a new home, using a battery-ready inverter for the project can give homeowners the flexibility to add a battery at a later date.

Niles said that in the past, the type of solar modules was considered the most consequential choice for customers in a solar array. The new most important aspect is the choice of inverter.

“Basically, the most important thing people can do nowadays is get an inverter that will accept a battery. A battery-ready inverter,” Niles said. “Because there’s a good chance you’ll need one in the future.”

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