Updated 4 days ago

Explained: lithium-ion solar batteries for home energy storage

Written by Catherine Lane

Lithium-ion solar batteries are the most popular option for home energy storage because they last long, require little maintenance, and don’t take up as much space as other battery types. Lithium solar batteries typically cost between $12,000 and $20,000 to install.

When paired with solar panels, excess solar energy can be stored in the battery and used later, like at night or during a power outage. Depending on the area, lithium ion batteries can even help save extra money on electricity bills.

Let’s take a closer look at what you need to know about lithium-ion batteries before getting one installed. 

How do lithium-ion batteries work as home storage?

Lithium batteries are rechargeable energy storage solutions that can be installed alone or paired with a solar energy system to store excess power. 

Standalone lithium-ion batteries can be charged directly from the grid to provide homeowners with backup power in case of a power outage. They can also be used to avoid paying for peak electricity rates, by charging with grid power when electricity is cheap and discharging when it’s expensive. 

Pairing a battery with solar will give you the most bang for your buck, especially if you don’t have access to net metering. The lithium battery can recharge with excess solar energy that is generated by your panels, so you can run your home entirely with solar even when the sun isn’t shining. 

How much do lithium-ion solar batteries cost?

Lithium-ion solar batteries don’t come cheap, with installations ranging from $10,000 for a simple single-battery solution, to well over $30,000 for whole-home backup. This is significantly higher than that of installing lead-acid batteries, which typically run between $5,000 and $15,000. 

Despite the price difference, people still tend to choose lithium-ion batteries over lead-acid because of increased performance and fewer maintenance concerns. The total cost of a solar battery installation depends on the battery brand you choose, the features it has, how many batteries you need, and labor costs. 

Battery incentives can help lower costs. There are a number of solar battery incentives that help lower installation costs. The biggest is the federal tax credit, which is equal to 30% of the total costs of qualifying battery installations. There are a number of local battery incentives and rebates, pilot programs like Green Mountain Power's battery lease, and things like virtual power plant programs are becoming more popular, as well.

How much can you save annually with solar-plus-battery-storage?

What are the pros and cons of lithium-ion solar batteries?

Pros
  • High depth of discharge

  • Long lifespan

  • High energy density

  • High efficiency

  • Little maintenance

Cons
  • High cost

  • Thermal runaway

Advantages of lithium-ion solar batteries

Lithium-ion batteries are the most popular option for homeowners looking for battery storage for good reason. Here are some of the benefits of lithium-ion home batteries:

Higher depth of discharge (DoD) 

The DoD of a battery is the amount of the stored energy in the battery that has been used compared to the total capacity of the battery. Most batteries come with a recommended DoD to maintain their health. 

Lithium-ion solar batteries are deep cycle batteries, so they have DoDs around 95%. Compare this to lithium ion batteries, which have DoDs closer to 50%. Basically, this means you can use more of the energy that’s stored in a lithium-ion battery and you don’t have to charge it as often. 

Long lifespan 

Because lithium ion batteries have a high DoD and don’t need to be charged and recharged as often, they have a long lifespan. 

Most lithium-ion solar batteries have a minimum warrantied lifespan of around 10 years, or a cycle life of 10,000 cycles - whichever comes first. Lead acid batteries, on the other hand, only have warrantied lifespans of around 5 years. 

Higher energy density 

The energy density of a battery is how much power the battery can hold relative to the physical size of the battery. 

Lithium-ion batteries can store more power without taking up as much space as lead-acid batteries, which is great for homes where space is limited. 

High efficiency 

Lithium-ion batteries have a higher round-trip efficiency rating than other types of solar batteries on the market. 

Efficiency refers to the amount of usable energy you get out of your battery compared to how much energy it took to store it. Lithium-ion batteries have efficiencies between 90 and 95%. 

Less maintenance 

Not having to worry about regular maintenance is one of those advantages that you just can’t put a price on. Lithium-ion batteries require little to no regular maintenance - just make sure they’re clear of debris and. Some lead-acid batteries, on the other hand, require frequent off-gassing.

Disadvantages of lithium-ion solar batteries

Although lithium-ion batteries have numerous benefits, there are still some draw backs.

High cost 

Lithium-ion batteries tend to be the most expensive battery storage option, especially when compared to lead-acid batteries. 

The good news is that solar battery systems qualify for incentives like the federal tax credit, which helps make lithium-ion batteries more affordable. 

It’s also important to remember that while lead-acid batteries may be cheaper upfront - they have to be replaced more often, increasing your overall storage costs. 

Thermal runaway 

Lithium-ion batteries run a higher risk of thermal runaway, AKA overheating and catching on fire. While the risk is technically there, the chances of this happening with a properly installed lithium-ion battery is slim to none.

Popular lithium-ion solar battery brands

There are many lithium-ion solar batteries on the market. Some of the best solar battery brands include Enphase, Panasonic, and Tesla. 

The following table outlines some other popular lithium-ion solar batteries on the market:

Battery

Price

Storage Capacity

Warranty

Enphase IQ 5P

$6,250

5 kWh

15 years

Panasonic EverVolt

$9,900

9 kWh

12 years

Tesla Powerwall 3

$8,400

13.5 kWh

10 years

LG Energy Solution RESU Prime

$16,000

16 kWh

10 years

Canadian Solar EP Cube

$9,400

9.9 kWh

10 yearas

Types of lithium-ion batteries

There are two main types of lithium-ion batteries used for home storage: nickel manganese cobalt (NMC) and lithium iron phosphate (LFP). 

An NMC battery is a type of lithium-ion battery that has a cathod made of a combination of nickel manganese and cobalt. When people say “lithium-ion batteries” they’re often referring to NMC batteries. These batteries are what shot lithium-ion to the mainstream, with better performance than that of their lead-acid competitors. The Generac PWRcell, LG RESU Prime, and Tesla Powerwall 2 are NMC batteries. 

LFP battery cathodes are made of lithium irone phosphate (LiFePO4) and are still considered lithium-ion batteries. The iron and phosphate used to make the cathode are more abundant and less expensive than some of the materials used in NMC batteries - mainly cobalt. The Enphase IQ, Panasonic EverVolt, and Powerwall 3 use LFP technology. 

More battery manufacturers have been switching to LFP batteries because they dont contain expensive, toxic cobalt. LFP batteries are easier to recycle, a little bit cheaper, longer lasting, and ,most notably, safer. Aside from having fewer toxic metals, LFP batteries are better at handling temperature fluctuations and are even less likely to experience thermal runaway than their NMC competitors. 

How are lithium-ion batteries recycled?

Batteries are recycled by being shredded and mixing all of their components. Once all of the metals are mixed into a powder, they need to be separated by either being liquified or dissolved in acid so that the desired metal can be retrieved.

Since the process of recycling batteries is still in the early stages, the United States has suggested an enhancement to the Defense Production Act. The goal is to put money towards securing the metals we need for a clean energy transition while also researching and investing in recycling lithium-ion batteries.

Alternatively, instead of shredding old batteries, sometimes batteries within an EV can be reused. Lithium-ion batteries have a very long lifespan, and while they will lose their ability to power a car, they can still be used for less intense energy storage needs, like backup power.

Currently, when you replace technology such as your EV or storage battery, recycling the old one is a chore. You can find certified electronics recyclers through the EPA website. Alternatively, some manufacturers like Tesla will take back their lithium-ion batteries at the end of their life to be recycled.

What makes recycling lithium-ion batteries a challenge?

At this stage, current recycling methods are not sophisticated enough to extract most of the key metals that can be reused in a way that is more cost-effective than mining.

It is cheaper to mine most metals found within a lithium-ion battery than recycle them. Perhaps ironically, cheap lithium mining is one of the many reasons we can invest heavily in batteries. Unfortunately, if we build cheap lithium batteries that are not recycled, we will end up with landfills full of electronic waste.

While recycling batteries may require some extra work and additional cost, the metals within the batteries are durable and usable. Recycling needs to become economical to reduce our dependency on freshly-mined lithium.

Since lithium mining emits a high amount of CO2, using lithium and other metals from recycled batteries is a more environmental and sustainable alternative.

Additionally, a potential shortage of metals that are used in batteries is looming. Discovering a way to reuse all the metals within old batteries will help meet supply needs.

Do you need a lithium-ion solar battery?

Lithium-ion solar batteries are the best solar energy system for everyday residential use because they take up little space while storing a substantial amount of energy. They last longer and provide more usable energy than lead-acid batteries, plus they require little maintenance. 

However, sometimes a lead-acid battery might be the better choice. If you’re only using a solar battery for backup storage and not daily use, or if you’re looking for storage for an off-grid solar project, lead-acid batteries will get the job done and won’t break the bank. 

However, if we’re being totally honest, most homeowners probably don’t need a battery at all. Solar batteries do provide numerous benefits, but their substantial upfront costs means they don’t quite make sense as a financial investment in most cases. It depends largely on local policy, utility rates, battery incentive programs. and how frequently you expertience power outages.

The best way to figure out if a solar battery is worth if for you is by speaking with multiple solar installers. Solar companies can give you an idea of how much a lithium-ion battery can save you (if anything) and if it’s something you should consider for your home.  

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Written by Catherine Lane Solar Industry Expert

Catherine is the Written Content Manager at SolarReviews, where she has been at the forefront of researching and reporting on the solar industry for five years. She leads a dynamic team in producing informative and engaging content on residential solar to help homeowners make informed decisions about investing in solar panels. Catherine’s expertise has garnered attention from leading industry publications, with her work being featured in Sola...

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