If you are reading this, you are most likely an existing solar owner. Congratulations on making the change to solar instead of being at the whims of the utility company and constantly increasing electrical rates. One question we receive from existing solar customers is, “Can I add more solar or battery storage to my system?” Electrically speaking the answer is yes. However, there may be limitations depending on your specific system and when it was originally installed. Let us dive in and take a look at adding solar and battery to existing solar systems.
Key Take-Aways:
You can add 1kw or up to 10% of solar (whichever is larger) to your existing NEM 1.0 or 2.0 and stay on that NEM program.
You can add as much battery storage as you want to your existing NEM 1.0 or 2.0 and stay on that NEM program.
If your system is substantially undersized, you may be able to increase system capability with a battery add-on.
Why is my solar system not covering all of my electrical usage?
There are a few reasons you may want to add more solar or battery to your system. If you have tracked your energy consumption over the last few years, you have probably noticed a steady incline in usage. This is very common. In fact, residential electrical usage has been increasing since the 1950s. While the rate of increase has slowed, it is still increasing year over year on average. This is due to more appliances being switched from gas to electric, more people working from home, and more electric vehicle charging. In addition, more homes are using HVAC systems to heat and cool throughout the year.
One reason for increased usage could be the change in PG&E peak vs off-peak rates. As the gap between peak and off-peak rates increase, you pay more for evening usage that your solar is not able to offset with daytime solar energy credits.
Another reason for increased usage could be the natural degradation of your solar panels. Like all electrical equipment, solar panels lose production capabilities as the years go on. Higher quality panels will have less degradation compared to a budget panel. The average quality residential panel will be spec’d to degrade by 0.5% per year. By year 25, your panel may only be producing 85% of what it produced on day 1.
Finally, your solar system may have been undersized for your needs when it was originally designed. Most solar systems need to produce about 120% of the home’s power needs to bring your electrical bill to zero. This percentage is called your solar offset. The extra 20% takes care of minor electrical increases over the years, panel degradation, and peak vs off-peak rate changes. If the solar offset was only 100% or less, it may never have been large enough for your home’s electrical needs from the beginning.
Which PG&E Net Energy Metering Program Are You In?
Under PG&E, if your solar system was installed before 2017 you are likely in Net Energy Metering 1.0 (NEM1). If your system was installed between 2017 and April 2023 you are likely in NEM2. If your system was installed in late 2023 or after, you are likely in NEM3. If you are not sure you can look on your PG&E bill for your NEM information. You can also look at your solar documentation to see which program you are in. It is important which NEM program you are in because it may limit how much solar you can add, or if there is a benefit to adding more solar.
How Much Solar Can I Add and Stay In NEM1.0 Or NEM2.0?
Based on PG&E’s solar rules, you can add 1kw of solar, or up to 10% (whichever is larger) system increase in solar size. For most systems that is only 2-3 additional solar panels which is generally not enough to make a substantial difference in electrical production. You can add even more panels if you would like, but it means you will be moved to NEM3, which is not as economically beneficial to solar owners compared to NEM1 or NEM2 solar credit rates. However, there is another solution available, which is battery storage.
How Much Battery Storage Can I Add and Stay In NEM1.0 Or NEM2.0?
If you are limited on how much solar you can add to your system you may want to look into battery storage. Based on PG&E’s rules, you can add as much battery storage as you want and it will not change your NEM status with PG&E.
Batteries offer 2 main benefits to solar customers. First, they allow you to have back-up power in the event of a grid power outage. This is extremely useful if your area is prone to power outages, you have a home office, or have a family member with medical equipment that must be operational at all times. Secondly, batteries allow you to store your excess solar electricity that was produced during the sunny part of the day, and run some or all of your home on battery power after the sun goes down. This offsets your usage during "peak-rate times" when your electricity costs the most, and your solar cannot directly offset the usage. This is called “rate arbitrage”. It is how you use the battery to save on your energy bills without having to actually increase your solar system size.
My Existing System Is Way Undersized, what should I do?
Depending on how undersized your system is, you may be able to eliminate the energy you buy from PG&E by simply adding a battery to your system to allow rate arbitrage during the evening when energy is more expensive. This is a great solution and allows you to stay on your existing NEM1.0 or NEM2.0 solar program. In addition, you get the benefit of having battery back-up for power outages.
If a battery add-on is not enough, adding more solar might be the best option. If your annual true-up is thousands of dollars, it might be worth adding a much larger solar system even though PG&E will move you to NEM3.0. With a properly sized solar and battery system, you will be able to show a net $0 bill with PG&E, plus gain the benefits of battery back-up. Even though the system will be an investment, it is a much better option than continuing to pay PG&E for the power your existing system does not offset.
Conclusion
While it is possible to add some solar to your existing system, it may be a better option to add battery storage. This will offset your evening usage when energy costs the most, and you will gain battery back-up capabilities for when the power goes out. If your system is drastically undersized, it is worth adding much more solar and battery to your system, even though it will move you into NEM3. Please reach out to the experts at Diamond Solar Solutions to discuss the best option for your particular home.