The latest battery-powered electric cars can travel hundreds of kilometres on a single charge. That’s an impressive amount of energy. The energy demands of cars and homes are very different, but it raises an intriguing possibility. Could batteries that store renewable energy help manage electricity use and lower energy costs in our homes?

It probably depends on where you live. In the Hawaiian islands, for example, 90% of the electricity is generated by coal and oil shipped in to power plants in the scattered islands, which cannot share the same grid. Electricity prices, as a result, are often three times higher than on the mainland. And when powerful storms rage through, like Hurricane Iselle, in 2014, people lose their power for weeks.

Since the hurricane, Jeremy Setbacken, owner of Off-Grid Solar Specialists in Kurtistown, Hawaii, has been working hard to install home electricity storage systems. For now, he’s feeding electricity from solar panels into lead-based battery packs.

In northern Europe, where the sun can be scarce, the case for home batteries looks less compelling. Unless governments provide subsidies, says Peter Breithaupt, a senior researcher in innovative technologies at Shell in the Netherlands, “putting a battery into a European home is expensive.”

Breithaupt and his colleagues are working with solar power and home electrical storage in a specially adapted house in The Hague, known as EcoGenie. Solar power is hard to generate in the dim light of the Netherlands winter, when heating is a major drain on energy. Heating the EcoGenie in winter alone eats up to three times the electricity the house consumes in total in the summer.

But much of the global population lives in sunnier climes, and the question is whether home batteries can advance from niche markets like Hawaii to the global mainstream. “Batteries change the equation in the electricity business,” says Steve Levine, author of The Powerhouse, Inside the Invention of a Battery to Save the World.  With effective home storage, he says, householders could not only create their own electricity, but manage it, reducing their dependence on utility companies. The key piece that’s been missing from the picture is a more affordable and efficient home battery.

Now companies around the world are ploughing billions of dollars into battery research and production. On a site outside Reno, Nevada, California-based electric carmaker Tesla Motors is building a huge factory. The company believes that production efficiencies will reduce the cost of its new home batteries, known as Powerwalls, making them more affordable.

Infographic: Home battery
  • Solar panels convert energy from the sun into electricity. When the sun is not shining, most users have traditionally relied on electricity from the grid.
  • The solar energy flows into a battery, about the size of a large suitcase. Batteries allow solar users to store electricity in the day and use it at night, or when electricity from the grid costs more. Software programmes can help the householder strike the right balance to save costs.
  • The electricity passes through an inverter, which converts direct current into the alternating current that powers most of the appliances in a home, including refrigerators, computers and televisions.
  • Most homes maintain a connection to the grid for a reliable stream of electricity. But for many with home batteries, especially in sunny climates, such reliance on the grid will begin to reduce.

Falling prices

The idea is simple. Solar panels feed the battery during the day, and in the evening the house draws power from it. In most economies, the system would supplement electricity from the power grid. But homeowners could also tweak their systems to store energy from the grid when it’s cheap, and run off the battery when it’s not.

Companies including Japanese electronics group Panasonic, a minority investor in the new Tesla battery factory, and South Korea’s Samsung Electronics have sold home batteries for several years. So far, they’ve gone mostly to householders in remote locations where grid electricity is unreliable, or not available. But more affordable batteries could broaden the appeal. The Tesla Powerwall today costs less than standard prices a year ago. Asian competitors are matching Tesla’s price, Levine says.

But beyond price, householders will have to weigh the life of the battery, as well additional expenses. These include the installation, along with software and an inverter. This converts the battery flow from direct to alternating current, which is what most home electrical systems require.

Demand is likely to take root in markets like Australia, where the sun is strong and reliable, and many people live in remote places. A report by UBS, the Swiss investment bank, estimates that the smaller Tesla battery could be integrated into an Australian home energy system for a few thousand US dollars. Such a system could pay for itself within six years, the bank says. And sooner if prices continue to fall. UBS predicts a 50% decline by 2020.

A new role for utilities?

In most mainstream markets, Breithaupt expects utility companies to play a role in increasing the use of large-scale electricity storage. With efficient batteries, such companies could store electricity when demand is slack, and pump stored power into the grid to meet sudden mass demand – for instance, when hundreds of thousands of people turn on their air-conditioners at around the same time.

Other companies aiming for the broader storage market range from industrial giants like General Electric of the USA to new firms such as Aquion, a US manufacturer of manganese oxide and water batteries. Investors in Aquion include Microsoft co-founder Bill Gates and Shell Ventures, the venture capital arm of Royal Dutch Shell.

“Storage changes everything,” says Donald Sadoway, John F. Elliott Professor of Materials Chemistry at Massachusetts Institute of Technology in the USA, and co-founder of Ambri, a company producing liquid-metal batteries. “With powerful batteries, alternative energy such as wind and solar can come in from the wings to centre stage.”

More in Inside Energy

The secrets of the EcoGenie

An experimental house in the Netherlands reveals how renewable technology can cut energy bills and carbon emissions from old homes.

Hydrogen cars hit the highway

Emissions-free cars move closer to the mass market with help from governments, car makers and a growing network of refuelling stations.


Protecting the environment, reducing waste and making a positive contribution to biodiversity.

Sustainability – our approach

Our approach to sustainability starts with running a safe, efficient, responsible and profitable business, bringing wider benefits to the areas where we operate.

The energy future

How will the world produce more, cleaner energy to power our homes and cities, and fuel our vehicles in decades to come?