Home batteries

The idea of a home battery is attractive - it suggests complete energy independence, when combined with solar PV as the energy source, even off-grid living and protection from power outages. But although battery prices have been falling, and they are now VAT-free in the UK, one will still cost you several thousand pounds. And they are not of course an energy source in themselves, in fact they do consume a small amount. So is the investment worthwhile?

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How can a home battery help with net zero ?

We're repeatedly reminded that the sun doesn't always shine, and the wind doesn't always blow. So a charged battery can deliver you power overnight, avoiding any import of at least partially fossil fuelled electricity. A battery can also be integrated with the electricity grid, importing it for you when there is plenty of renewable energy and prices are cheap, and exporting it again at peak times. The arbitrage between import and export prices can earn you income - you import it cheaply and sell it for more. When millions of others do the same, this can help the whole grid to avoid switching on fossil power during low wind or solar generation. Finally, if set up correctly a home battery can be backup for you during a power cut.

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Is a home battery cost effective?

In the early days of solar panels in the UK, PV owners were paid for generation rather than export, and were paid whether or not they used the power generated. A small export tariff was paid, a few pence per kWh, but this was not normally metered but "deemed" - ie guessed at 50% of your metered PV generation.

This meant that exported power had no intrinsic value, as you would be in exactly the same financial position whether you used the power or not. So there was good reason to find a way to make that excess PV power useful, for example by using it to heat up water, or store it in a battery for later home use. We export around 3000kWh per year, and if we stored half that in a battery to avoid import, it would save us about £435 per year, which could be an ok  payback on, say, a £4,000 battery cost.

However, these sums have changed. The modern Smart Export Guarantee for new solar requires export to be metered properly, which means that if you put it in a battery you miss out on the export income. Secondly, the advent of smart tariffs for import and export means that there is often very little to be gained by storing power, rather than exporting it and importing again later. Sometimes export prices are actually higher than import.

 

Let's look at some ways of using batteries to make/save money:

 

Self use of solar + smart SEG tariff

As mentioned above, there are now much better export tariffs available, notably Octopus Fixed Outgoing at 15p, one of the most popular. Meanwhile daytime import rates are around 25p. So if you store 10kWh of solar for use overnight, you might save £1 per day, or maybe £200 a year (as you won't get that from solar every day). But you might not be able to use that much electricity overnight, especially in summer, and if you have a cheap night time rate like an EV tariff, you will save even less. 

This is a rather underwhelming benefit, with a modest return on an investment likely to be £3-5,000. 

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Storing  cheap off-peak power for your use during the day 

This is much more promising! Cheap night time tariffs can give you several hours at rates of around 7-11p. If you use your battery to store this you can then power your home for most or all of the following day at this rate, saving potentially 14-18p/kWh. This works best in the winter, when your electricity demand is highest, and we estimate would save around £300 for 10kWh per day.  On top of this, you get to export most of your solar power, as your battery will start the day full and won't need charging from solar.

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Storing  cheap off-peak power & exporting it back for more

This is ADDITIONAL to the above. Any spare power you have at the end of the day you export (often called "forced discharge" on the battery control system) back to the grid at your export tariff rate, so long as this is more than your off-peak cheap rate. As batteries do have losses, you should only do this if there is a margin over your import tariff - say about 30%. So for a 15p export tariff it'll be worthwhile for an off-peak import tariff of 12p or less. If you have, say, the 7p Octopus EV tariff and export at 15p you might make another £180 per year.

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Combining these approaches, therefore, might earn you £500 or so per year, which should get you above 10% ROI - beginning to be a worthwhile return, if not spectacular. A number of factors can tweak this return upwards:

• Getting the lowest off-peak rate and highest export rate

• Minimising the battery installation cost

• Ensuring you match your battery size to consumption: too small and you'll make lower savings; too large and you won't be able to use all the stored power for most of the year, and pay too much for installation. 

• Note also that you may be able to accept a high peak time import rate if this gets you a low off-peak rate, simply because you will normally not have to pay the peak - as your battery takes the strain. 

 

Optimising these factors enabled us to get to ROI  of around 15% on a 14kWh battery.