If you’re thinking of buying a home battery to protect your house from outages or to cash in on rooftop solar panels, a startup called Lunar Energy this year will bring some new competition to the Tesla Powerwall. The Lunar Battery is a compact, modular design intended to automatically control home appliances and pay for itself as soon as possible.

The battery system monitors factors like weather, power usage and varying electrical rates to control when the system charges the battery, powers your home or pumps power back onto the grid. Lunar Energy plans to start shipping its battery system in volume starting in October.

The product is part of a growing consumer movement — reinforced by regulatory rules and incentives — to reduce emissions of carbon dioxide, the greenhouse gas chiefly responsible for climate change. Home electricity, still supplied in large measure by oil and gas power plants, is responsible for about 20% of greenhouse gas emissions in the US. Appliances like oil-burning furnaces and gas-powered stoves and dryers add more. But batteries, especially when paired with rooftop solar panels, can play a role reducing that carbon footprint.

And that’s where Lunar Energy is trying to cash in.

“Our North Star is to power homes around the world with endless clean energy,” Kunal Girotra, the company’s chief executive and founder, said in an interview at Lunar’s Mountain View, California, headquarters. “We’re not building electric cars, electric planes or batteries for other applications. We’re laser focused on decarbonization of homes.”

Before Lunar’s founding in 2020, Girotra led Tesla Energy, the division that makes its Powerwall home batteries and Megapack equivalent for grid-scale energy storage. And the startup’s chief engineer, Kevin Fine, founded Tesla’s Powerwall team.

It’s complicated to set a price, since Lunar will sell its batteries through Sunrun and other solar panel installers that set their own prices. Costs should range from $20,000 to $30,000 for a 5-kilowatt solar panel system and a 20-kilowatt-hour battery, after the US 30% federal tax credit. That means a range of about $28,000 to $42,000 before the credit.

Lunar will begin sales in California and Hawaii but should be available in Texas, Florida and Puerto Rico within six to nine months. Its batteries can handle hot and cold temperatures, and the company expects to expand to Canada, Japan and Europe.

Home batteries become more mainstream

Solar panels once were exotic but now are more mainstream. Home batteries look to be headed in the same direction. But that’s changing as new competitors arrive on the home battery market.

After struggling to keep up with demand for months, market leader Tesla now is offering a $500 rebate on its Powerwalls. Anker, a leader in portable batteries and electronics accessories, is upscaling to whole-home power backup with Solix batteries scheduled for 2024.

And there are new financial incentives to buy a battery. The Inflation Reduction Act offers a 30% tax credit for home batteries. New California rules called Net Energy Metering (NEM) 3.0, which drastically cut the price that electrical utilities pay for rooftop-generated power, made solar panels alone a much worse investment than before. But the combination of solar panels and a battery makes financial sense under NEM 3.0. You can charge your battery during the day and use it to avoid paying steep rates in the evening.

For a California home with a 5kW solar panel system and 20kW Lunar battery, the solar and battery setup should pay for itself over about six to eight years, Girotra said.

Power storage, whether in individual homes or massive grid-scale installations, are key to making the energy transition to renewable, zero-carbon power. Solar panels now produce an overabundance of power during the day in sunny areas but do little to help in the evening when power usage surges. Wind power is intermittent too. Energy storage smooths these ups and downs, helping to avoid the use of expensive “peaker” power plants to handle the evening demand.

And for many, protection against power outages will be an incentive to buy a battery. Power outages increased 78% from 2011 to 2021 in the US, according to research from nonprofit Climate Central. Most of those were triggered by weather that’s getting more extreme because of climate change.

Lunar Energy’s battery system, explained

Lunar Energy’s battery system is a collection of products all designed to work together to ease the integration difficulties posed by batteries. The company expects many customers to have it installed at the same time as they’re getting solar panels.

The biggest is the battery itself, a stack of stacked modules that each are about the size of a microwave oven and have 5 kilowatt hours of capacity. Lunar suspects most customers will want between 15 and 25 kilowatt-hours of energy, but it’ll offer configurations from 10kWh to 30kWh. 

For comparison, each Tesla Powerwall has 13.5kWh of capacity. US households use 29kWh of energy per day on average.

Next is the bridge, a smaller box that links the battery to the grid power, detects outages, and controls specific circuits you might want to power or shut down during an outage.

Then there are “maximizers” that connect to each solar panel to oversee their electrical output. They can be installed with new solar or retrofitted to existing panels, though not likely leased solar.

The Lunar Battery system doesn’t require the company’s equipment to be attached directly to solar panels, but it’s more efficient in that configuration because there’s no power loss converting from direct current to alternating current and back.

An app shows you what’s happening at any moment — solar power generation, house power consumption, whether the battery is charging or discharging — and lets you control the system. Lunar expects most people will set the system up to maximize savings by charging the battery during the day and then using the power or pumping it back onto the grid during the evenings when power rates are often higher.

But you can set the system to work in other modes, for example, setting a reserve level that sequesters enough power to give you peace of mind or keeping the battery charged all the time for maximum protection for power outages.

Lunar’s app already can be used to let battery owners participate in virtual power plants, or VPPs, agreements in which a utility pays to be able dispatch some of battery owners’ collective power supply when needed.

Solar installer Sunrun, which participated in a $300 million investment in Lunar Energy and which will be a Lunar Battery installer, already has 12 VPP programs, Girotra said.

Inside the Lunar Battery

At the heart of the battery are dozens of thin “pouch” cells made by SK On, another of Lunar’s investors. They’re mounted in metal trays that are separated by materials that can absorb a lot of heat to cut the risk of runaway fires.

Each module weighs 90 pounds — hefty, but not nearly as heavy as a bigger battery like a Powerwall. Lunar argues its batteries are easier to install.

The batteries have cooling and heating systems to handle weather extremes, and they can be mounted indoors or outdoors. With IP67 protection against water, they can be submerged up to 3 feet underwater in case of flooding, engineering chief Fine said. 

And they come with a warranty that guarantees 70% capacity after 12.5 years.

The app also lets you configure the appliances in your house that should keep power, like refrigerators and broadband routers, and which should be cut off to conserve power, like TVs and washing machines. The system controls such circuits either directly through the bridge or remotely through a connection to an ordinary circuit breaker panel over the house power network.

Later, Lunar plans to add its own electric vehicle charger too, potentially easing a big step in the electrification of our lives.

“We don’t have an EV charger today, but that is the next thing on our road map,” Girotra said. “Our goal is to say to a homeowner, with this system, you get generation, storage, control and charging through one app.”