This is Part 1 of a two-part series that explores the economics of going completely off-grid with solar. Part 1 focuses on what it actually means to go “off-grid” and how to start thinking about calculating the costs for cutting the cord with your utility. Part 2 discusses two real-world examples of sizing an off-grid solar energy system, along with the feasibility of going through with an off-grid solution.
The notion of living off-the-grid is becoming increasingly popular. Given the rising cost of electricity throughout the country, it’s hard to not at least consider cutting the cord every time a utility bill comes through the mail. But what does it really mean to go “off-grid”? For such a simple concept, the logistics of going off-grid are in fact rather complicated and very costly.
What Does It Mean To Go “Off-grid”?
Taking your home off-grid from an electricity perspective means completely removing any connection to the larger electric grid, which powers the large majority of homes, buildings and businesses throughout the country. This means that to go off-grid, you’ll need to meet all of your household needs with electricity produced on-site.
Importantly, installing solar panels on your roof does not mean that you’ve gone off the grid. Most solar energy systems are not designed to consistently generate enough electricity to be a home’s only power source, which is why the vast majority of solar homeowners maintain a connection with their utility company.
In these cases, a policy called net metering allows you to put the electricity produced by your solar panels back onto the electric grid when you aren’t using it, and to then pull from the grid when your solar panels aren’t producing, at night or when the weather is less than ideal. At the end of the month or year, you’re billed by your electric utility on the net of production from your solar panels and the electricity you used from the grid, hence the term net-metering.
In an off-grid solar energy system, you don’t have access to the larger electric grid when you need it, either at night when your solar panels aren’t producing, or in the event of a prolonged period of cloudy weather. Instead, you need to create your own personal “grid”, installing on-site battery storage to store the output from your solar panels for use at a later point in time.
Calculate the Cost of an Off-grid System in 4 Steps
Going off-grid with solar requires more than just installing solar panels and disconnecting from your electric utility. There are four key steps to determine if going off-grid is feasible for your home, as well as how much it will cost:
- Calculate how much electricity you use;
- Determine how many solar batteries you will need;
- Design a solar panel system to fit your needs;
- And add up the costs of the combined solar plus storage system.
How Much Electricity Do You Use?
The first step in going off-grid is understanding how much electricity you use, alternatively known as your consumption or your electricity load. To figure out how many solar panels and solar batteries you need to go off-grid, you need to know how much electricity your home uses each day.
There are two primary ways to calculate your home’s daily electricity needs. The first, and easiest, is to find the monthly consumption number on your electricity bill (expressed in kilowatt-hours, or kWh). To get daily electric consumption, divide your monthly usage by the number of days in the month. Since usage can vary from month to month, it’s a good idea to perform this calculation for multiple months.
The second method for calculating your daily electricity load is a “bottom-up” approach: multiply the wattage of each appliance in your home by the number of hours you use it every day. Though you may not be able to find the specific wattage for all of your appliances, most large household electronics - like TVs or refrigerators - come with a yellow Energy Guide sticker that estimates yearly energy use. Divide that number by 365 to get an estimated average daily electricity load for these appliances.
One of the best tools available for estimating energy use is the Department of Energy’s calculator. Based on that calculator, here are some estimates for the electric load of common appliances:
The approach listed above is a great way to review your historical energy usage, though may not be as useful to forecast future energy consumption. The second approach, on the other hand, is better at forecasting what you may use in the future. Both of these approaches are estimates, though; if you’re planning to install solar and storage to go off-grid, it may be worth purchasing a home energy monitor to get a more precise estimate of your electricity usageYour electricity consumption directly impacts how large of a solar plus storage system you’ll need to install. By first conducting an energy efficiency audit, or by adjusting your consumption habits (for instance, by air drying clothes and dishes instead of using electric heat), you can decrease the cost of going off-grid substantially.
How Many Batteries Will You Need?
In order to go off grid, you need a way to store the electricity produced by your solar energy system at times when you’re not using it. Importantly, not every solar battery can operate independently of the grid, even if you’re feeding it solar energy. To go off-grid, you specifically need a battery that can “island”, or form its own grid, so that the panels will recharge the battery every day without a grid connection.
To determine the number of these batteries you need to power your house for a single day, you need to know both your daily electricity consumption and the amount of electricity stored in a standard solar battery.
The amount of electricity stored in a battery is called the “Usable Energy”, expressed in kWh. This is the amount of electricity that you can get out of a battery, after accounting for electrical losses and any energy needed to power the battery itself.
With these two data points in hand, calculating the number of batteries you’ll need is straightforward. For instance, the average American household uses about 30 kWh per day. Given the conversion losses associated with storing electricity, you’ll need enough batteries to store slightly more than what you use per day, likely closer to 32 kWh, depending upon the efficiency of the battery you select.
Two of the most common solar batteries are the Tesla Powerwall 2 and the LG Chem RESU 10H, which store 13.5 kWh and 9.3 kWh of usable energy, respectively. So in this example, the average American homeowner would need 3 Powerwalls or 4 RESU 10H batteries to meet a single day’s electricity need.
It’s important to remember that this is just the number of batteries you’ll need to power your house for a single day. In reality, you’ll want to have enough backup storage capacity to power your house for many days, or even an entire week, in order to ensure you still have electricity if you have a period of inclement weather or need to use more than your average daily usage in a single day.
How Many Solar Panels Will You Need?
Next, you’ll want to design the solar energy system that will supply electricity to your property and storage setup to be large enough to fill your battery every day.
The electricity you a solar panel system produces is directly a result of the amount of sunlight your panels receive. The average home in the U.S. receives an average of 5 sun hours per day over the course of the year, which represents not the amount of time panels are in the sun but rather measures the number of hours during which sunlight intensity is 1,000 W/square meter. The amount of electricity your panels produce is also related to the angle they’re placed at and whether they receive direct sunlight all day or spend time in the shade.
To determine how many solar panels you need to fill your batteries every day, divide the amount of electricity needed (in this case, 32 kWh) by the number of expected sun hours (5 in this example):
32 kWh / 5 hours = 6.4 kW
Thus, we need a solar panel array of about 6.4 kilowatts to fill up a battery bank with a capacity of 32 kWh each day.
Adding up the costs
The average cost of solar in the U.S. is $2.98 per Watt, meaning our 6.4 kW system comes to $19,072 prior to incentives. A single installed Tesla Powerwall battery costs between $9,800 and $15,800, so installing three Powerwalls would likely cost somewhere between $29,400 and $47,400 before incentives. Add that together and you’re looking at a total installed cost between $48,215 and $66,615, before any rebates, tax credits, or other incentives are applied.
However, remember that these are just the costs for a system capable of powering an average American home for a single, average day. In reality, not every day requires the same amount of electricity, nor is every day perfectly sunny. While the average daily usage in American households is 30 kWh, hot summer days with AC on full blast could use as much as 80 kWh.
Once you start considering both seasonal and day-to-day weather variations, the prospect of going off-grid becomes vastly more complicated. What happens if it rains for a week straight, or if you live in a region with snowy winters? Just an hour of cloudy weather during the day could reduce the production of your solar array by up to 20 percent, meaning that if you only size your solar plus storage system to perfectly meet your average daily consumption, there may be many times throughout the year when your system doesn’t produce enough electricity to power your home. As a result, in nearly every case, to go off-grid requires more than a single day’s worth of backup electricity.
The only way to safely go “off the grid” is to make sure you’re ready for the most extreme situations possible, because being left without power and without the electrical grid to pull from can be a potentially dangerous situation to find yourself in. In the Northeast, an off-grid solar installation needs to account for fluctuating electricity loads during the seasons, as well as the possibility of greatly reduced production in winter months due to snow cover or cloudy days. In the Southwest, high AC use in the summer may require a larger-than-usual array and storage system to keep your home comfortable during the hot months.
Why Go Off-grid?
There are homes that function very well off-grid with smaller and less expensive solar and storage systems. But these homes are designed specifically for this purpose, often because they are located in remote areas that don’t have access to an electricity grid. Some of these houses are built to Passive House standards and require very little energy for heating or cooling. Others use wood burning for space heating and limit the extent of electrical systems in the house. Homeowners in these situations may pay a premium for these features, or manage their lifestyle with an expectation of time periods throughout the year without electricity.
In the majority of instances, however, the desire to go off-grid may be less about cutting the cord with your utility and more driven by improving resiliency. By installing one or two solar batteries with islanding capabilities, you can ensure that your house remains powered even in the event of a severe weather event or outage on the rest of the grid. For most solar shoppers, this is a cost-effective way to improve the resiliency of your home without breaking the bank to go off-grid entirely.
Jacob is on the marketing team at EnergySage, the online solar marketplace, focusing on SEO and content. He recently graduated from Tufts University with a degree in Geoscience. When he’s not checking up on the latest Google algorithm update or writing about topics in the solar energy industry, you can find him playing Ultimate Frisbee or rewatching Game of Thrones.
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