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Does this system design make sense?

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I think it's a bit more accurate to say the Gateway is capable of grid formation, in this case it's the Tesla Gateway, but also true for Enphase's gateway. With either gateway, I think any older Enphase micro can also produce power with the simulated grid (differences are more how limited in curtailment options).

Of course the gateway is there because there are batteries in this installation. I think IQ8 is not capable of grid formation by itself in a solar-only install. But Enphase gateway can be added without batteries to allow IQ8 to generate power, though it sounds like it doesn't work well - and anecdotal quote by my friend a few months ago, $10K+ just to add the gateway without batteries....

But anyways, no issues with HardHitter's installation.
Yes, you are right, the gateway shuts off the grid and commands the powerwalls to produce power. I think it is a hair split though, as the gateway doesn't store or produce energy itself, so on its own, its grid forming capacity is zero.

You are right that the IQ8s can't make a grid on their own; I thought it had been released, but it Is apparently vaporware still, so you would need batteries.

All the best,

BG
 
Thanks all, I ended up getting my questions answered. They said that Santa Clara county code is making it next to impossible to install batteries these days. Code won't let you stack them anymore and if you want them in the garage then you have to have other hardware I believe like smoke detectors and a sprinkler system in case of a fire. I do have some concern with the hardware being outdoors, but nothing really else I can do.