How to add an Inexpensive Battery System to your Home

Lithium iron phosphate (LiFePO4) batteries prices have dropped significantly and seemed to have stabilized over the last few years

It is now very feasible for homeowners using the grid to add a battery storage system with or without an existing solar system.  Currently, the best technology is lithium iron phosphate (or LiFePO4).  This is because it has superior thermal and chemical stability thus making it highly resistant to overheating and fire along with long life with a deep discharge capability.  It is also the most widely used batteries and therefore the price and value cannot be beaten.  A good quality 12.8V, 100 Ah battery module with a battery management system (BMS) can be found for around $125 - $150.  All the estimated costs here are in US dollars from 2025.

This blog will focus on adding a standalone battery storage system as a Do-It-Yourself (DIY) project to homes using the grid.  This is ideal if you don't have solar or have a solar system that doesn't support batteries.  However, if you are not a DIYer and want batteries, it might make sense to replace your existing system with or add an all-in-one system (AIO) because the battery bank, control software, solar, charging and discharging hardware are nicely integrated into one package so it is easier to install but may be more expensive because it has features you may not need. The main drawback with all AIO systems is a single subsystem failure can cause the entire system not to work, which will generally cause more down time and be more costly to repair.  The information below is helpful to anyone who wants to understand how to select a battery storage system.  There are basically five steps.

1. Determine the Size of the Battery Bank

The first step is to determine the size of the battery bank assuming you use 100% of the battery's capacity.  Typically, this is expressed in total energy or kWh which is the same unit as what your electricity provider charges.  The size depends on what you would like the batteries to do.  Some people size the battery bank to power their entire house during the period when their solar system is not generating.  Others have sized it based on being a backup during a power outage or just for peak shaving or energy arbitrage.  The strategy is to make this battery system independent of a solar system.

Once you determine the minimum size, you will then need to consider the life span of the batteries based on how it will be used to make any further adjustments.  A key consideration is the depth of discharge can significantly affect the life span.  While the LiFePO4 have a high depth of discharge (DoD) close to 100%, regularly discharging the battery by 100% will decrease the life by at least 4 times compared to a 50% discharge.  For example, averaging 100% DoD, will give you about 2,000-3,000 cycles while averaging 50% DoD will give you about 10,000+ cycles.  A cycle is defined by the battery manufacturer and usually means anywhere from 85-100% of full capacity discharge and charge cycle.  It might be helpful to look online for graphs that display the LiFePO4 cycle life vs DoD to decide on the target DoD you think best fits your situation.

Sample Calculations

Purpose of batteries: to power the house during the times when solar is not available. Assume your battery bank is charged to 100% at the start of the no solar cycle.

Given the following:

• Average number of hours of no solar per day - 16 hours

• Average daily power usage - 36 kWh (can be tricky to determine if you already have solar and backfeeding, a good start is your power bill)

• Average DoD - 100%

• Battery life when averaging 100% DoD is 2,500 cycles, battery life when averaging 50% DoD is 10,000+ cycles (data from battery manufacturer)

• 1 cycle is 85% of full capacity (data from the battery manufacturer)

• Battery price - $125 per kWh

To determine the battery bank size needed, calculate the following.

• Average hourly usage is [Average daily power usage in kWh] divided by [number of hours in a day] or 36 / 24 or 1.5 kWh

• Average energy consumed during non-solar time is [number of hours needed to run on battery power] multiplied by [average hourly usage] or 16 x 1.5 or 24 kWh.  So battery bank size needs to be at least 24 kWh

• Approximate battery cost is [battery bank size in kWh] multiplied by [battery price per kWh] or 24 x 125 = $3,000

• Battery bank life is [rated cycle life at specified DoD] multiplied by [definition of cycle relative to full capacity] or 2500 * 0.85 cycles or 2125 days or 2125 / 365 or 5.8 years

Our recommendation is to target 50% DoD to give you the best value, but certainly it's up to you.  This means to cover the daily energy consumed with an average of 50% DoD, you'll need to adjust the calculated battery bank size by a factor of [calculated DoD] divided by [target DoD] or 100/50 or 2.  This means with a 2 x 24 or 48 kWh battery with an average 50% DoD, you can expect 8,500+ cycles or 23.3 years (4 times longer life) for double the cost or $6,000.  In addition, this will give you an additional buffer of 100% in case the capacity requirements are underestimated with unforeseen situations.

2. Determine Battery Bank Voltage and Current Capacity

Once the size is determined, then you need to decide on the nominal voltage.  The higher the rated voltage the less current is needed for the same power.  Less current means higher efficiency because there are less resistive heat losses.  For residential systems, the range in nominal voltages is from low voltage (12.8 to 51.2) to high voltage (200 to 400). High voltages are not recommended for DIYers due to safety concerns.  For small cabins or RVs, 12.8 to 25.6 V are very common. For average size homes, 38.4 to 51.2 V are widely used. Therefore, we recommend a nominal voltage of 51.2 V for residential homes.

Once the nominal voltage is determined, you can determine the current capacity needed.  The current capacity is how much current the battery bank can deliver and is expressed in units of Ah.  The formula for current capacity is [battery bank size in W] divided by [rated battery bank voltage] so for our example of a 48 kWh battery bank with nominal voltage of 51.2V, the current capacity needed is 48000 / 51.2 or 937 Ah.

3. Assembling your Battery Bank

Now with the nominal voltage and current capacity known, you can use these specs to buy your LiFePO4 batteries and supporting accessories.  All LiFeP04 batteries are made up of individual cells at the nominal voltage of 3.2 V with a certain current capacity in Ah.  To increase the voltage and current capacity, one will wire up the cells in either series and/or parallel.  Voltages are added and current capacity stays the same when cells are wired in series, while current capacity are added and voltages are the same when cells are wired in parallel.  This can be a lot of work and complex because you will also need to include a battery management system (BMS). Therefore, this method is not recommended.

The recommended way is to buy modules with the cells already assembled at the required voltage and wire them in parallel to get the correct current capacity.  For example, a 51.2V, 100 Ah is a very common rack mount unit for about $850.  To get the necessary 937 Ah, you would need to wire 10 of these modules in parallel.  Note, inside this module are 16 cells with 3.2 V and 100 Ah current capacity to get to the 16 x 3.2 = 51.2 V and 100 Ah numbers.  All the wiring and necessary safety devices at the cell level are included along with an appropriate BMS.  Alternatively, you could buy a more readily available 12.8 V, 100 Ah module (car battery size).  You would need 40 of them and wire them together as 10 parallel sets of 4 in series.  Be sure to check with the modules manufacturer to determine if there is a limit on the number of modules that can be wired up in series or parallel as dictated by the supplied BMS.

Always follow the manufacturer's requirements on external cable sizes and torque specs. Also, consider adding appropriate safety measures such as fuses and disconnect switches based on the current and voltage ratings of the battery modules.  You can look online to follow best practices in wiring up a battery bank.  If any battery modules are in series, then it is best to have a battery balancer for those in series.  Total cost of the battery bank is the [battery cost] plus [support accessories].  The supporting accessories (including all the wiring, fuses, switches, circuit breakers and busbar) are about $35 per kWh.  So, in our example, the estimated cost of the recommended battery bank is 6000 + (35 x 48) or $7,680.

4. Select the Battery Charger

The battery bank can be charged either directly with DC power from your solar panel or with AC power from the grid.  Charging directly from the DC power from your panel is the most efficient.  However, while AC charging is not the most efficient, it can be very close to DC (96% vs 93%).  In addition, it can be very difficult to use the DC from your panels without messing up the existing solar inverter/microinverters. This is more flexible as it allows charging at any time and not limited to only when the solar panels are producing.  This means you can charge your batteries late at night when the energy prices are at its lowest and discharge your batteries when the energy prices are higher (energy arbitrage) provided you have the variable rate plan (time of use or TOU) from your electricity provider. Therefore, our recommendation is to do AC charging (known as AC coupled).

There are many standalone AC battery chargers (not solar charge controllers) available online.  It must be specifically designed to charge LiFePO4 batteries and have features that promote safe charging such as overcharging prevention and thermal sensors with high efficiency (greater than 85%).  LiFePO4 can be safely charged at 20 to 50% of the current capacity (or 0.2 to 0.5C).  This means it should take about 2 to 5 hours to charge from a completely discharged battery.  The lower the percentage will be better for its life. Therefore, we recommend 0.2C.  This means, continuing with our example, if we have a battery bank with 1000 Ah, a battery charger rated at 0.2 x 1000 or 200 A is more than sufficient.  Note, you can always go less than 0.2C to save costs and it won't hurt anything. It just takes longer time to charge.  The estimated cost for a charger that can charge 51.2 V batteries (usually marketed as 48V chargers for LiFePO4 batteries) is about $6 per A.  So, for our example, expect to pay 6 x 200 or $1200.  Also, you can always add chargers in parallel to get to the desired charging current.

5. Select the Battery Inverter

To discharge the battery, you need a battery inverter (not a solar inverter).  An inverter converts DC battery power to AC power.  The AC power should be a pure sine wave (verses modified sine wave) to be 100% compatible with all your electrical devices.  First, you need to determine the type of battery inverter you need and then figure out the capacity.  There are 3 types of inverters. They are standalone (used for off-grid or backup), grid-tied and hybrid. 

A hybrid inverter really doesn't exist by itself. Instead, it is integrated into an AIO system and therefore is overkill for this topic.

The standalone inverter creates its own "grid" and is used as backup power when the grid is down or as the power source for an off-grid home.  It should never be connected to the grid when it is generating power regardless of if the grid is down or not.  This is because of both a safety and power compatibility (not synced) issue.  If it is used as backup power, then there needs to be a way to physically disconnect the home wiring from the grid wiring first before the standalone inverter starts.  This is usually done with a manual or automatic transfer switch.  For this reason, this type of inverter is not convenient for peak shaving and energy arbitrage.

A grid-tied inverter is simpler to install as it is directly wired into your home's main breaker panel.  It requires the grid to be active for it to work.  If the grid goes down, so does the grid-tied inverter so it cannot run as a backup power source.  The grid tied inverter must have a zero-export or limiter feature.  Otherwise, it may generate power that is sent to the grid.  All our calculations and assumptions are based on not sending any power to the grid and consuming 100% of the power generated.  This type of inverter is best for peak shaving and energy arbitrage.

If having backup power is not a concern, then our recommendation is a grid tied inverter.  Otherwise, choose a standalone inverter with a transfer switch.

Note, you will need to check with your electricity provider to see if you need to have an interconnect agreement when connecting ANY grid tied inverter or standalone inverter (with a transfer switch for backup power) to the grid regardless of if it has the zero-export feature.  Most electricity providers need to make sure the grid disconnects correctly when there is a power outage by having this interconnect agreement in place.

To choose the right inverter for your needs, you need to determine the required output power rating (max and continuous), input current draw and type of voltage system.  It can be difficult to determine the required output power rating because most people don't know how much all their electrical devices will need or use.  Perhaps an easier way is to just take the calculated average hourly usage and multiply by 3.  In our example, this would be 1.5 x 3 or 4.5 kW.

To handle the maximum current and surges, it is important to choose which inverter technology you need.  There are 2 types which can be classified as high frequency (HF) or low frequency (LF) inverters.  Choose LF inverters if you have a harsh electrical environment with a lot of high surge currents like from large motors found in pumps and multiple HVAC systems (not mini splits).  Choose HF inverters for an average residential home including electric vehicle charging (may need a soft start circuit for the HVAC system).  LF inverters are much larger, less efficient, more robust, and more reliable to handling surge currents but usually cost more. 

Inverters are rated as either kW or VA.  kW is useful power, and VA is the total power.  A typical home has a power factor of 0.8 so to estimate the VA needed from kW, use the formula VA = [kW] divided by [power factor].  So, for a 4.5 kW typical home battery inverter, you can also look for a 4.5 / 0.8 or 5.6 VA rated inverter.

The next requirement to figure out if the input current draw is too much for your battery bank.  For LiFePO4, the safe discharge current needs to be less than 1C.  We should target 0.5C or less or 500 A for our example to handle possible surges.  So, a 4.5 kW rated inverter, the input current draw is approximately [rated output power in W] divided by [inverter efficiency ] divided by [nominal battery voltage] or (4500 / 0.85) / 51.2 or 103 A.  This is much less than 0.5C or 500 A, so it's good.

Finally, the type of voltage system needs to be determined.  The power output of the inverter must match your region's power system.  For example, in North America, the residential power system is split phase 250 VAC, 60 Hz.  This means the inverter needs to generate 125 VAC and 250 VAC at 60 Hz when it is disconnected from the grid.  However, for a grid tied inverter, only a 250 VAC, 60 Hz inverter is needed because you are still connected to the grid's split phase transformer.  Other regions can have different voltages and frequencies as well as multiple phases so it's important to identify the power system in your area to match the output of the inverter.  The typical cost for a HF battery inverter rated at about 5 kW is about $1000.

Final Numbers

This brings the total cost for a standalone home battery system for the DIYer at $7,680 + $1,200 + $1,000 or $9,880 for a 48 kWh battery bank that can last 20 years with 200 A battery charger and 4.5 kW grid tied inverter to potentially use very little to no electricity from the grid with an appropriate sized solar system.

Final Thoughts

Ultimately, there are only two separate and distinct goals in adding a home battery system. Either to save money on electricity usage or have uninterrupted power.  It is possible to have both with an AIO system which has a hybrid inverter built in.  One should determine which is the most important goal and by how much.  If both goals are about the same in priority, then an AIO system is better.  If saving money on electricity is more important, then one needs to carefully consider the return on investment (ROI) and the total potential savings.

In future blogs, we will talk about ways to maximize your savings on both your battery and/or solar system.  We have a live feed of the energy flow of a system that achieves the best ROI on our home page at 2muchsun.com. This system uses a standalone battery system with a smart charger and a smart grid tied inverter along with a separate solar system and power diverters.  As you can see, this system uses less than 2% from the grid while exporting less than 2% to the grid during the highest electricity price period from 7 am to 9 pm. This system uses energy arbitrage to charge up the batteries since the solar system is not large enough.