Enphase wants customers to know exactly how much money they earn with batteries

Basic transparency could encourage homeowners to use their batteries for the benefit of the grid.

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Numerous companies have bet that home energy devices will play a role in a cleaner, more efficient grid. But there’s little agreement on how the people living with and owning those devices should make money in the process.

Enphase started as a hardware manufacturer, producing microinverters to convert rooftop solar power from direct current to alternating current. But then it embarked on a multiyear quest to expand the business into a full-stack home energy company. That evolution included last year’s launch of a home battery product for storing solar power and backing up households during outages.

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Uptake of those products moved swiftly. Company filings show Enphase sold 141 megawatt-hours of battery products in the year since it launched.

  • Sales reached a high of 43 megawatt-hours in the second quarter of 2021, and are expected to hit 60 to 70 megawatt-hours in Q3
  • That projection anticipates 40 percent to 63 percent growth quarter-over-quarter.

Reporting its quarterly earnings last week, the company revealed that it has begun tapping that network of home batteries to help the broader grid. Enphase customers in Connecticut, Rhode Island and Massachusetts can sign up for Connected Solutions, a program in which utilities pay them based on how much battery capacity they offer up in moments of high electricity demand.

That’s not new — companies like Sunrun, Swell and sonnen have been talking about and executing grid services contracts for several years now. But since using home appliances to participate in the grid is still a relatively new phenomenon, Enphase wanted to make its customers feel more included in the process.

The company built software that it says gives customers an unprecedented level of control and visibility into what their batteries are doing and how they’re making money at any moment.

Participating helps stabilize the grid with sustainable energy and can earn money for homeowners — we wanted customers to get to see all parts of that,” said Kishore Shakalya, the executive who oversees grid services for Enphase. We also wanted it to be gamified: let customers adjust how much their battery is participating, opt out of events if needed and see the rewards all from the same app they’re used to monitoring their system with.”

Automating sign-up within the app also saves time and costs for onboarding and reduces the risk of attrition in a more drawn-out sign-up process.

How much customers need or care to know about their battery remains an open question. But Enphase is betting that its approach resonates with customers in a way that other providers’ offerings don’t. The effectiveness of the strategy will impact not only battery sales but also the willingness of homeowners to participate in a decentralized power grid.

In the dark or fully informed?

As home battery adoption grows, spurred by technological improvements and the heightened need for backup power in many regions, companies are trying to figure out just how active a role customers should play.

Most people are not electrical engineers. They may want a battery to keep their lights on, but they don’t want to have to tinker with it. A set-it-and-forget-it” approach could be sufficient for this group.

But the theoretical potential of home batteries is much bigger than solitary backup power. Thousands of home batteries sharing a little bit of their power can offset the need for more expensive and carbon-emitting power plants. But encouraging someone to lend their expensive gadget to this task requires the right incentive structure.

On one extreme, iconic home battery maker Tesla recently floated a no-incentive incentive structure.

The company invited California owners of its Powerwall batteries to participate in a virtual power plant.” After paying thousands of dollars to install the battery, participants would let Tesla use it to perform valuable grid services when extreme weather pushes California to the brink of outages. At present, neither Tesla nor the Powerwall owner will receive any compensation for services rendered, although Tesla noted that this could change in the future. 

More typically, companies aggregating batteries for grid services offer some kind of reward, but it doesn’t always track with performance. Solar installer Sunrun sometimes lowers its upfront prices for battery customers based on revenue it expects to make using those batteries for grid services. 

Occasionally Sunrun pays a lump sum upfront for participation. Customers received $250 for lending their batteries to a demonstration with Southern California Edison announced last year. Sunrun’s own website for Connected Solutions offers a $150 Visa gift card annually for participating (it also shares a phone number customers can call if they’d like to take back control of their battery).

Such fixed, upfront payments simplify the benefit for a customer, at risk of obscuring the actual value of participation. If the customer doesn’t know what their battery is earning, how can they be sure they’re getting paid appropriately?

A customer can earn quite a bit of money in this specific program, and we think making it simple to sign up and easy to see the rewards through software is a good way to encourage participation,” Shakalya added.

(Article images courtesy of Enphase)

Julian Spector is an editor at Canary Media and reports on the rise of clean energy. He worked at Greentech Media for nearly five years, and before that he reported for CityLab at The Atlantic.