The appeal of behind-the-meter storage grew significantly in 2015, setting up strong growth in 2016.

The economic case for distributed batteries is getting stronger -- in many examples, the internal rate of return on a solar PV system improves with storage. In blackout-prone regions, backup power adds a critical performance feature to any residential PV system and can defray investment in a gas generator.

As owners seek an improved rate of return and installers seek to differentiate their offerings, solar-plus-storage is estimated to explode from a $245 million industry in 2015 to a $3.1 billion industry in 2020, according to GTM Research.

But it all hinges on the technology. For solar-plus-storage to meet its potential, the inverter needs to rise to the occasion.

Most of today’s residential solar-plus-storage systems are installed without islanding inverters -- smart power centers with grid-sensing electronics and high efficiency that directly integrate with batteries. The emerging generation of smart islanding inverters, inherently designed for grid-tied storage integration, enhance the value propositions of solar-plus-storage with additional benefits to the owner and installer.

Technology: What’s new and different?

To date, the common solution for adding battery backup to a solar PV system has been AC coupling. In the simplest technical terms, AC coupling is a workaround that exploits the DC port on a bidirectional inverter/charger to charge batteries, while being fed by AC from a unidirectional inverter connected to the solar array. It’s a clever design scheme, but the many conversions from DC to AC result in low efficiency and high complexity and cost.

Conceived and designed from the start as a simplified, storage-ready solution, smart islanding inverters deliver better performance and efficiency while streamlining the number of installed parts. Reducing complexity drives down installation cost and warranty risk, while maximizing efficiency through batteries.

Design advantages of smart islanding inverters

The best-of-breed islanding inverters perform their islanding function with no external autotransformer (further reducing installed components) and often include built-in monitoring, while integrating with any battery technology.

Owners and installers of smart islanding inverters benefit from several design considerations and operational features.

Efficiency: Unlike a conventional grid-tied inverter, an islanding inverter using a high-voltage DC bus (nominally 380 VDC) operates in the nominal voltage range of advanced high-voltage batteries like the Tesla Powerwall. This eliminates the need to use a separate power converter to charge and discharge batteries, maximizing efficiency and power capacity.

Form factor: High-voltage islanding inverters are slimmer and more lightweight than their low-voltage counterparts. The primary reason is that with higher voltage, the current is lower, reducing heavy copper inductors.

Future-proofing: Code compliance is a moving target for conventional residential PV systems. As changes to NEC and other criteria develop, a smart islanding inverter can be remotely administered and updated by the manufacturer to push new code-compliant software or firmware without a site visit.

Operational advantages of smart islanding inverters

Behind-the-meter storage with an islanding inverter adds several key benefits to a grid-tied solar system.

Load management: System owners can draw energy from batteries at night rather than buying from the grid during peak demand hours.

Configurable modes: Best-of-breed smart islanding inverters give owners configurable operational settings. These include prioritized battery charging from renewable sources, self-consumption mode, and programmable battery usage for time-of-use markets.

Backup power: These inverters support critical loads without the need for an auto-start generator, keeping the owner’s clean power investment clean.

Self-consumption: System owners can opt out of buying power altogether, provided they have enough solar generation and storage to meet their needs.

Scalability: With communications over a DC bus, additional devices like advanced DC appliances can be added to the system that can be integrated directly with the bus and configured from the inverter without additional communication hardware.


Battery capacity is the primary limiting factor of any behind-the-meter option. If powering critical loads is the primary goal, the battery bank will typically be larger than if the owner simply wishes to take advantage of time-of-use billing or self-consumption.

As with all clean technology, system cost is a limiting factor for some owners. A smart islanding inverter with batteries and installation included has a premium of roughly $10,000 over a traditional grid-tied solar PV system with no islanding capability or storage. Installers will rely on sharp models for owners’ internalized rate of return to demonstrate the improved system payback versus a conventional grid-tied system.


Chip Means is the director of sales development at Pika Energy.