Newsletter: How should you be compensated when companies tap your home battery?

Everyone wants to get paid, but a standard model hasn’t yet emerged in this nascent industry.

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Right now, if you own a battery in your home, you could be making money on it.

Numerous programs will pay homeowners to discharge their batteries in the hours when the grid is most stressed. It should be a win-win, reducing costs and carbon emissions for the energy system as a whole while compensating the people who pitch in.

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But the clean energy industry has not reached a consensus on what form of compensation makes sense for enlisting homeowners as miniature power plant operators. 

I wrote about a new approach from Enphase, the billion-dollar solar microinverter company that’s growing into a broader home energy services company. Enphase expanded its app so battery customers who opt into a distributed power plant in New England can track exactly how much money they make from participating. 

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,” said Kishore Shakalya, the executive who oversees grid services for Enphase.

But that basic level of transparency around what’s happening with someone’s expensive battery is not the norm. A commonly held view in the industry is that customers prefer simplicity and don’t want to be bothered by granular data on what their battery is doing.

Many battery programs instead offer an upfront incentive to participate. That gives a homeowner guaranteed cash in hand, and then the energy company handles the details of how the battery operates from that point on. 

Utility Hawaiian Electric chose that route for its new Battery Bonus program on the island of Oahu. 

  • Customers who sign up in the first cohort get an upfront payment of $850 per kilowatt — more than $4,000 for the typical home battery.
  • Getting that money right away defrays a chunk of the cost of buying the battery.
  • But the battery has to perform as promised for a 10-year period or the homeowner will owe the utility money back.

It’s hard to argue with $4,000 in your pocket. But upfront incentives put distance between the customer’s payout and the actual operations of their battery. 

  • Maybe the incentive is spot-on and fair, and everyone is happy.
  • But the company aggregating batteries for the grid could lowball participants and pocket more money for itself. If customers don’t know the value of their battery to the grid, they suffer from an information gap that could be exploited.

There’s also a third path, which is to use someone’s battery and give them nothing for it. That’s what Tesla’s doing in California — the company bills the plan as a public good program to support the California grid.” The cheapest electricity is the electricity someone else gives away for free.

It’s still quite early in the adoption cycle of these programs, but they’re growing all the time. The best way to discern what consumers want is to try different options and see how people respond.

But I’m curious what you, dear reader, think about this. 

If you had a battery, would you be happy taking a payout and letting someone else control your battery for a few hours each day? Or would you prefer full transparency on what your equipment is doing and how much money it’s making?

Drop us an email at [email protected]​canarymedia.​com (or tweet at us).

And thanks to everyone who sent in clean-energy song recommendations, per the request in Friday’s newsletter! We’re compiling those and will send the playlist later this week. Y’all seriously crushed my expectations for how many songs we’d get for the energy and decarbonization theme.

(Lead photo: Jordan Rowland/Unsplash)

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.