SCE Approves the Tesla Backup Switch Paving Way for Lower Powerwall Pricing
Home battery storage is crucial for backup power and maximum solar savings in California — and it just got faster and more cost-effective to install.
On October 16, Southern California Edison (SCE) became California’s third and final investor-owned utility to approve the Tesla Backup Switch. This breakthrough device streamlines backup battery installations to reduce the upfront cost and increase the number of appliances homeowners can access during a power outage.
The Tesla Backup Switch was previously approved by Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E) and has already been installed in those service areas. Reports from solar.com’s network of installers indicate that Powerwall battery systems using the new Backup Switch take one-third of the installation time and cost $3,000 to $5,000 less for the homeowner.
Let’s take a closer look at what the Tesla Backup Switch does and why it’s reducing the cost of battery storage in California.
What is the Tesla Backup Switch?
The Tesla Backup Switch is a device that connects to your electricity meter to instantly detect power outages and safely disconnect your solar + battery system from the utility grid so it can continue to power your home. This disconnect feature is required by utilities to protect line workers as they repair the grid during power outages. Without it, your solar and/or battery system will shut off when the power goes out.
Traditionally, disconnect devices (often called gateways) are mounted to the wall in a control box about the size of a pillow and are wired to an additional breaker box (known as a sub-panel). The sub-panel takes up wall space and limits the number of appliances your solar + battery system can power during an outage. Installing and wiring these additional components takes time, adding to the overall cost of the system.
How the Tesla Backup Switch does more with less
The Tesla Backup Switch streamlines the battery system by connecting to existing components in your home — namely your electric meter and your main breaker box. This has several benefits.
- Solar panels and Powerwall battery systems can supply power to any appliance in your home during power outages, including heating and cooling systems.
- Powerwall battery systems can be installed several hours faster and at a substantially lower cost
- The Tesla Backup Switch frees up wall space by eliminating the need for wall-mounted control boxes and sub-panels
You can see the streamlined process in the diagram below. On top, the Backup Switch attaches right to the utility meter, eliminating the wall-mounted Gateway and the additional panel box or “load center” required by the system below it. It also eliminates the wiring and conduit between these components and the hours of labor required to do it properly.
By connecting to the main breaker box, the Powerwall 3 with Backup Switch can power any system in the home, including heating and cooling (provided there is sufficient energy from the solar panels and/or battery storage). Down below, the Powerwall 3 with Backup Gateway 2 is limited to powering “essential” loads on the sub-panel. This often includes refrigeration, medical devices, and select lights, outlets, and kitchen appliances — but does not include heating and cooling.
Importance of battery storage for SCE customers
For SCE customers, battery storage does much more than provide backup power. It’s also key for maximizing your solar savings under the NEM 3.0 solar billing policy, which drastically lowered the value of selling solar electricity back to SCE.
For example, let’s say the value of your solar electricity is 10 cents per kilowatt-hour. Under NEM 3.0, you’re typically compensated at 4-5 cents per kilowatt-hour — about half of what it’s worth — when you sell your excess electricity back to the grid. And when the sun isn’t shining, you’ll end up buying electricity from SCE at around 30 cents per kilowatt hour.
With battery storage, you can store and use your own solar electricity to avoid selling low and buying high.
So, battery storage is crucial for solar savings in California and the Tesla Backup Switch is a game-changer because it lowers the overall cost of a Powerwall battery system by $3,000 to $5,000. And while Tesla is the first to offer this breakthrough technology, other manufacturers are expected to follow in early 2025, paving the way for lower battery pricing across the board.
The bottom line
The Tesla Backup Switch is a major advancement that both increases the performance and lowers the cost of Powerwall battery systems — and it’s now approved for customers of SCE, PG&E, and SDG&E.
If solar + battery wasn’t in the cards before, it’s time to check again. Start your journey on solar.com to design your Powerwall battery system with a Backup Switch and compare quotes from trusted installers.
Frequently asked questions
Is the Tesla Backup Switch approved by PG&E?
Yes, the Tesla Backup Switch is approved by all three California investor-owned utilities. This includes PG&E, SCE, and SDG&E.
What does a Tesla Backup Switch do?
The Tesla backup switch attaches to your utility meter to detect power outages and instantly disconnect your home from the grid. This allows your solar + battery system to stay active so it can power your home during power outages.
How much do I get for selling electricity back to the grid in California?
Under NEM 3.0, homeowners earn around 4 cents per kilowatt-hour on average for selling their electricity back to the grid. This is typically much lower than the cost of generating solar electricity and it is more valuable to store and use your own solar energy in home batteries.
