In California, most homeowners are subject to what is known as Net Metering 2.0, or NEM 2.0 for short. Under this policy, homeowners with a solar energy system are connected to the electric grid and pay about $0.02 for every kilowatt-hour of energy that they send to the grid. Each month, the kilowatt-hours the homeowner produced and used are netted, and if they used more than they produced at the end of the year, they’ll be required to pay the balance.
Under NEM 2.0, homeowners in California also agree to time-of-use billing, which means they will pay more for electricity during peak hours and less during off-peak hours. Peak hours happen when demand for electricity is high, typically in the late afternoon and evening, while off-peak hours usually happen during the daytime when electricity demand is lower.
However, solar panels are generally most productive at generating energy during off-peak hours when it is cheaper to draw power from the grid and not as productive during peak hours when it is more expensive to draw power from the grid. This means that during the day, your solar panels alone will likely be covering your energy needs and probably even sending excess power to the grid, but during the evening and night, the panels are no longer producing, so you’ll be pulling energy back from the grid to cover your energy needs at the higher peak hour rate.
Having a solar battery can help solve this problem and save you money because during the day when your panels are producing more energy than you’re using, that extra power is stored in the battery rather than sent to the electric grid. Then later in the day or at night, you’ll be able to use the energy stored in your battery for free rather than having to pull from the grid at a more expensive rate. Additionally, you’ll avoid those fees that are charged to feed energy to the grid.