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:

Avoiding import +  smart tariffs

Recently our average prices on a daily tracker have been around 20p for import on a dynamic tariff, and 15p for export. If you store 1500kWh to displace import, you only save 5p a unit, or £75 a year.

Or, you could use hourly tariffs to import power during the night. An expert we know does this, and has reduced his effective power price to 12.5p/kWh. Over the same period we paid 16.9p on a daily tracker. For 2500kWh per year this would save £110. Neither of these give you any kind of worthwhile payback.

Import/export + smart tariffs

You could alternatively go for power arbitrage, importing power at, say 10p at night and exporting it back to the grid at peak prices of, say, 30p. Using 7kWh of battery capacity, you could make £511 per year. But a battery that size would be maybe £7,000, so again this use case alone struggles financially.

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For these reasons we do not consider that a home battery is currently a worthwhile element of the Net Zero Home, so long as you make the most of smart tariffs (which are free to access). There are other reasons to have a battery, for example if you are in an area vulnerable to power cuts, but this is a completely different financial decision.

If you already have a battery, then you can make the best use of it by using a half-hourly tracker like Agile Octopus, which will enable you to store power at the lowest price overnight.

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All of this could change if battery prices fall significantly, and we will update this section if needed.