In recent years, interest in power independence and energy alternatives like solar power systems and wind energy has grown due to aging power grids and frequent severe weather that has led to increased power outages across the United States. Federal data found that in 2020 more than 180 large, sustained outages occurred whereas in 2000 there were fewer than two dozen major power outages. All of these factors are causing a surge in demand for an innovative solution known as energy storage systems (ESS).

As the need for energy storage systems continues to grow, it’s important to understand the terminology of these systems. This article serves as a guide to help you learn common terms and better understand energy storage systems so that you can make an informed decision on what power solution is right for you and your home.

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What is an energy storage system and how does it work?

Energy storage systems store electricity generated from solar, grid, and/or wind for any power usage needs. They provide efficient, cost-effective power solutions to users in power outages, store excess energy to offset high electricity costs during peak times, and supplement power from the utility grid. The following are important terms to know about the components of an energy storage system.

  • Energy Storage System (ESS): A bank of batteries combined with power conversion equipment such as an inverter and charge controller that stores energy for use when needed. Typically includes management and monitoring software for utility integration and user control.
    • Energy source: Where the system draws energy from to store for later use. Usually solar panels, grid, wind, or generators.
    • Battery: An enclosure consisting of one or more electrochemical cells combined to create a specific DC voltage, amperage, and capacity that converts stored energy into electrical power.
    • Hybrid Inverter: An inverter/charger that manages power conversion from DC power from solar or batteries and converts it to AC power to support electrical loads. A hybrid inverter supports both battery charge and discharge as well as grid interconnection. Many hybrid inverters have integrated MPPT charge controllers for solar optimization.
    • Energy management and communication software: Provides advanced system monitoring through sophisticated software that delivers real-time status and updates, as well as intuitive control over the entire Energy Storage System. It can help lower energy costs by adjusting the power draw to and from the battery storage based on the customer's objectives.

It’s also important for you to understand how the system’s battery and inverter work together to store power generated by an energy source, such as a solar panel, for later use. That’s where AC or DC coupling comes in.

  • AC or DC Coupling: The method in which solar panels are linked to energy storage systems.
  • Alternating Current (AC): AC is the electrical current that the grid uses to operate. It is when the electrical current flows forward and backward.
  • Direct Current (DC): DC is when the electric current flows in one direction. Solar panels produce DC energy which can then be stored in batteries.

However, most electrical appliances found in homes operate on AC which is why DC must be converted to AC using an inverter.

What types of programs can I enroll in as an energy storage system owner?

With extreme weather events and other threats to energy security becoming more frequent, more homeowners are looking to purchase energy storage systems to provide them peace of mind in an outage. In addition to providing backup power, energy storage systems can also provide homeowners with cost savings benefits and serve as a tool to manage utility costs through demand-response programs. Learn more about the different types of cost-savings programs ESS owners can enroll in below:

  • Distributed Energy Resources (DER): Distributed Energy Resources refer to small, modular, energy generation and storage technologies such as energy storage systems that provide electric capacity or energy where needed. DER systems may either be connected to the local electric power grid or isolated from the grid in stand-alone applications.

    Users of DERs may be able to enroll in demand-response and energy efficiency programs that allow them to manage their electricity use during periods of higher power prices. Demand response and energy efficiency programs can reduce users' electricity consumption when prices are high or the reliability of the grid is threatened. Users can receive payments for the reductions they make.
  • Distributed Energy Management Systems (DERMS): Distributed Energy Management Systems refer to software used by utility companies to manage distributed energy resources (DER)—such as solar panels or energy storage systems. DERMS are used to control and optimize the energy distribution of DERs to enable better management of the energy grid and increased efficiency and reliability for homeowners and businesses.
  • Net Energy Metering: Net energy metering allows customers who generate electricity from a solar power system to sell the energy they aren’t using back to the grid. This can help homeowners reduce their electricity bills.
  • Time-of-Use (TOU): Time-of-use metering is a method of measuring and charging a utility customer's energy consumption based on when the energy is used. Utility companies charge more during the time of day when electricity use is higher. TOU rates vary by region and utility.

What should I consider when it comes to the cost of an energy storage system?

Although resilience and backup power are the primary reasons homeowners install energy storage systems today, the financial benefits of owning a system are important to consider. Energy storage systems can help homeowners save money if they are on a time of use rate (defined below) or if they have demand charges. They also enable homeowners to use stored power from the system instead of the grid during peak times when they’d be charged at a higher rate. The following terms are important for customers to know when considering the cost of an energy storage system:

  • Levelized Cost of Energy Storage (LCOES): While it is common to make purchasing decisions based on upfront price, LCOES considers the battery’s usable capacity, cycle life rating, efficiency rating, and total ancillary costs over the life of the battery.
  • Kilowatt-hour (kWh): A unit of energy equal to one kilowatt of power sustained for one hour or to 3600 kilojoules. It is commonly used as a billing unit for energy delivered to consumers by electric utilities.
  • Depth of Discharge (DOD): The lifespan of a battery and its performance can be impacted by a variety of factors. This includes the battery’s DOD. In order to understand DOD, we first must define battery capacity.
    • Battery Capacity: Refers to how much energy is stored/available from the battery. It is measured as a unit of power over time, such as kilowatt-hours (kWh).
    • DOD refers to how much energy has been discharged from the battery relative to the total capacity of the battery. A battery’s DOD is expressed as a percentage of the total battery capacity.
    • DOD is an important factor to consider when deciding which system is right for you because it impacts battery health and the size of the battery bank needed to power an ESS in order to meet your home’s energy needs. Working with an expert to determine the right size system for your home and lifestyle will prevent you from selecting an ESS that doesn’t have the right DOD to meet your needs.

In addition to understanding the terms above, it is a good idea for consumers to research local and federal incentives that may offset some of the costs associated with buying an energy storage system. Learn more about available incentives and rebates here.

How do I select the right energy storage system for my power needs?

Systems can be sized appropriately to meet the power needs of a homeowner. By working with a qualified dealer or installer, homeowners can make educated decisions about their energy consumption and what solution is right for them. Selecting the right system for your home begins with understanding your energy consumption and a few key terms including:

  • Kilowatt (kW): A unit of electric power. One kilowatt is equal to 1000 watts: 1kW = 1000W.
  • Scalability: The capacity to be changed in size or scale, such as adding more batteries and inverters to a system.
  • Cycle Life: The number of charges and discharge cycles that a battery can complete before losing performance.
  • Efficiency Rating: The ratio of the energy retrieved from the battery to the energy provided to the battery when coming back to the same state of charge.
  • Continuous Power: The Maximum Power (Watts) a power supply unit can output safely continuously.

Are lithium-ion batteries in energy storage systems reliable?

The most common type of battery used in energy storage systems is Lithium-ion batteries. Lithium-ion batteries allow you to take electricity generated by the grid, solar panels, wind turbines, or any combination and store it for use when you need it most. However, not all lithium-ion batteries are the same when it comes to reliability and safety.

Even though they are referred to generically as one class of battery, ‘lithium ion’, they can differ significantly in chemistry, cell form-factor, and construction, which can impact their performance dramatically. Learn more about the chemistry of lithium-ion batteries:

  • Lithium-ion chemistry: Lithium-ion batteries have a lot of advantages over their lead-acid counterparts. They are lighter, more efficient, charge faster, and have a longer lifespan.
  • Lithium Iron Phosphate Battery (LFP): In the energy storage system industry, LFP lithium-ion chemistry is often considered more cost-effective, longer-lasting, and much less prone to thermal runaway than other battery chemistries.
  • Thermal Runaway: Thermal runaway begins when the heat generated within a battery exceeds the amount of heat that is dissipated to its surroundings.

    It is a thermal runaway that causes overheating, fires, and explosions that are associated with lithium-ion batteries in the market today. Lithium Ferro Phosphate (LFP) chemistry reduces the risk of thermal runaway with fire propagation, operating temperature constraints, and toxic coolants.

    While LFP batteries are non-toxic, they can still go into thermal runaway. However, their thermal runaway threshold is much higher but still a very attainable 375 deg F compared to 300 deg F.
  • UL9540 Certification: UL 9540 is the most stringent safety standard for battery energy storage systems installed in homes and businesses. UL 9540 takes the guesswork out of understanding system safety and ensures that energy storage devices meet certification requirements specified in building and fire codes. It also provides assurance to customers that their batteries and balance-of-system equipment will perform and not create hazards.

    Customers are encouraged to ask any system installer or vendor if their proposed solution is UL 9540 certified – and request a solution that is approved for its safety and performance.

What other terms related to energy storage systems should I be familiar with?

As you explore what solution is right for you, it is important for you to be familiar with the following terms:

  • Critical Load Panel: Often called a backup panel, this is an additional AC panel added to a home that contains loads deemed critical that can not only be powered during normal operation but also during a grid outage.
  • Battery management system (BMS): The BMS is a set of electronics that monitors and manages all of the battery’s performance. Most importantly, it keeps the battery from operating outside of its safety margins. The BMS is critical to the battery’s safe operation, overall performance, and longevity. Moreover, it protects whatever the lithium battery is installed in and the people who are using it.

We understand energy storage systems are still growing and there is still a lot you will be learning. But, rest assured, a Briggs & Stratton dealer or installer will be there to walk you through this decision and help you find a dependable power solution that can give you peace of mind when you need it most.

Click here to request a consultation with a Briggs & Stratton dealer or installer near you.