Why Batteries Are Becoming the Most Important Part of Home Solar

For years, the solar industry has focused on how many solar panels can we put on the roof?

At Sol Viva, we always ask what is the smartest way to use the energy those panels produce, and that is where battery storage is becoming such an important part of the energy strategy.

Solar has created a new energy problem

Solar panels produce most of their electricity during the middle of the day.  Unfortunately, that isn't necessarily when homes consume most of their electricity.

A typical household may be relatively quiet during the middle of the day. Then people come home, cooking starts, air conditioning or heating is running, appliances are switched on and electric vehicles may start charging. 

Just as household electricity demand increases, solar production starts disappearing.  Scale that across hundreds of thousands of solar installations and something interesting happens to the electricity system.

There can be enormous amounts of cheap solar electricity available during the middle of the day, followed by a sharp increase in demand for electricity from the grid as the sun goes down.  The resulting demand profile is commonly known as the duck curve.

Australia is showing us what happens next

Australia provides a fascinating example because of its exceptionally high penetration of solar.  Recent Australian electricity-market data highlighted by energy commentator Gavin Mooney shows how rapidly batteries are beginning to change this dynamic.

Between 2023 and 2026, the median evening wholesale electricity-price peak across Australia's mainland National Electricity Market states reportedly fell from almost A$300/MWh to around A$100/MWh.

Importantly, evening electricity demand hasn't disappeared.  What has changed is how that demand is being supplied.

Batteries charge during the middle of the day when solar generation is plentiful and electricity is inexpensive. They then discharge that stored energy during the evening when solar production falls and demand remains high.

The result is that expensive sources of generation such as gas and hydro are required less frequently to meet peak demand.

In Q1 2026, batteries were reportedly the technology setting the wholesale electricity price most frequently in Australia's National Electricity Market, doing so in approximately 32% of intervals.

Australia already has around 9.5 GW / 21 GWh of grid-scale battery storage, with projects under construction or commissioning expected to increase this substantially over the next few years.

It is an extraordinary demonstration of what happens when you combine large amounts of solar generation with large amounts of storage.

Portugal is heading in the same direction

Portugal isn't Australia, but many of the underlying dynamics are remarkably similar.  We have an exceptional solar resource and rapidly growing photovoltaic capacity.  Residential self-consumption is also expanding quickly.

According to ERSE, Portugal had approximately 237,000 electricity self-consumers and 1.8 GW of installed UPAC capacity by the end of 2024. Between 2021 and 2024, installed self-consumption capacity grew by an average of 57% per year.

More solar inevitably means more electricity being produced at the same time.  And that has consequences for the value of electricity.

ERSE's own analysis illustrates the effect clearly. In 2024, Portugal's average marginal wholesale electricity price was €63.50/MWh. Solar PV, however, captured an average price of only €43.60/MWh because so much solar electricity is naturally produced during periods when electricity is abundant and prices are lower.  That is an important number for anyone considering solar.

It demonstrates why simply generating as many kilowatt-hours as possible isn't necessarily the objective.

The objective should increasingly be to maximise the value of every kilowatt-hour you generate.

This changes the economics of home solar

Imagine your solar panels generate 30 kWh during a sunny day.  Your house might only consume 10 kWh while that electricity is being generated.  Without a battery, much of the remaining 20 kWh has to be exported to the grid.  Then, several hours later, your solar production falls and you start buying electricity back from the grid to run your home.

Technically, your house may have produced enough electricity to cover much of its daily consumption.  Economically, however, you produced the electricity at the wrong time.  A battery changes that equation.  Instead of exporting surplus solar electricity, you can store it and use it later.

Solar produces the energy and the battery decides when that energy becomes valuable.

Batteries are about much more than backup

People often think of a home battery primarily as protection against a power cut.  Backup is certainly valuable, particularly when a system has been designed with proper EPS or whole-home backup capability.

But economically, the more interesting role of the battery is energy shifting.

A modern solar and battery system can potentially:

• Store excess solar production during the day;
• Supply the house from the battery during the evening;
• Reduce expensive grid imports;
• Charge an EV using stored or surplus solar energy;
• Charge from the grid during cheaper tariff periods where appropriate;
• Discharge during more expensive tariff periods; and
• Provide backup electricity during a grid outage.

The battery therefore becomes an energy-management asset rather than simply an emergency power supply.

The next step is intelligent energy management

This is where things become particularly interesting.  Today's solar systems generally operate according to relatively simple rules:

Solar → House → Battery → Grid.

But the next generation of home energy systems will be much more intelligent.  They will understand tomorrow's weather forecast. They will know your household's normal consumption profile.  They will know when your EV needs to be charged.  They will understand your electricity tariff. They will know the battery's state of charge. And eventually they will increasingly respond to electricity-market conditions.

The system might deliberately leave battery capacity available because it knows tomorrow will be extremely sunny.  Or charge the battery overnight because electricity is unusually cheap and poor weather is forecast the following day.  Or delay EV charging until excess solar production becomes available.

Instead of simply producing electricity, the home starts managing energy.

This is why sizing matters

It also explains why Sol Viva doesn't believe solar systems should simply be designed by filling every available square metre of roof with panels.  We model the household.

We look at historical electricity consumption, the time at which energy is being consumed, future EV charging, swimming pools, heating and cooling, electricity tariffs, roof orientation, shading, solar production and battery capacity.

Then we model how those components work together.

• Sometimes the right answer is more panels.
• Sometimes it is a larger battery.
• Sometimes it is changing electricity tariff.
• And increasingly it is a combination of all three.

The objective isn't the biggest solar installation, it is the lowest-cost and most resilient energy system for the home.

From solar homes to intelligent homes

Australia's experience gives us an interesting glimpse of where electricity systems are heading.  Solar created an enormous new source of inexpensive daytime electricity.  Batteries are now moving that electricity into the periods when it is actually needed.

The same transition will increasingly happen inside our homes.

The first generation of residential solar was about generating your own electricity.  The second generation is about storing it.  The next generation will be about intelligently managing when you generate, store, consume, buy and eventually sell energy.

That is a much bigger transformation than simply putting solar panels on a roof.  And for a country with as much sunshine as Portugal, it represents an enormous opportunity.

Sol Viva helps homeowners across Portugal design, install and manage solar, battery and intelligent home-energy systems. We independently analyse your energy needs, determine the right system size, select and manage installers, handle registration and help optimise the system once it is operating.

Because the future isn't simply about generating more energy. It's about using energy more intelligently.