Is now the right time to install an energy storage battery?
18 April 2019
Energy storage batteries make the most of electricity by storing it so you can use the energy when you need it. The latest analysis by research company BloombergNEF (BNEF) shows that the benchmark cost of electricity, from lithium-ion batteries has fallen 35% since the first half of 2018. So now could be the perfect time to invest in a battery for your home or business. This applies especially if you have PV solar panels or are thinking about installing solar panels for self-use renewable energy. An energy storage system can reduce your fuel bills and carbon emissions. The fuel bill savings can be up to 60%.
Some energy storage systems will also work with smart energy management systems. These allow you to keep track of your energy use online and can control when to charge your storage battery and when to draw power from it. This allows savings greater than 60% to be achieved.
Storing excess renewable energy from solar
Hundreds of thousands of solar PV systems have been installed in the last 10 years under the Feed-in Tariff scheme. These systems typically export around 60-70% of the electricity generated back to the Grid for little or no payment. The Feed-in Tariff scheme finished completely at the end of March 2019.
It now really makes sense to use as much of your solar power yourself as possible. An appropriately sized storage system should increase the proportion of solar electricity used on site from around 40% to 90%.
“Peak Shifting” - Buying cheap and using at peak tariff times
In the UK, electricity demand reaches a high in the late weekday afternoons (4-7pm), and then falls to a low overnight. Most homes have a single rate electricity tariff which doesn’t reflect the peaks and troughs of demand. Some homes and businesses are on an Economy 7 (or Economy 10) tariff with a ‘peak’ rate (15-20p per kWh) and an ‘off-peak’ rate (7-9p per kWh).
Most energy storage batteries allow the home or business owner to control the charge and discharge windows, thus enabling the system to ‘buy cheap’ (i.e. charge at night) and ‘use peak’ (discharge in the day), avoiding the punitive day time rates as far as possible. If you have an electric car this can be set to charge overnight using an energy management system and, based on a typical performance of 3 miles per kWh, your car will cost less than 3p per mile to run.
Selling electricity back to the Grid
The National Grid has to balance electricity supply and demand. This known as “demand side response”. In order to do this, it pays fees for energy from storage batteries that it can call for additional electricity as required.
Home and business owners can access income from these services by allowing their battery to be accessed remotely. This allows your excess energy to be used to support the grid at peak times. These are known as "smart export tariffs" which are beginning to emerge from companies such as Octopus Energy
Do Energy Storage Batteries Make Sense Economically?
The benefit of energy storage batteries depends on a few things:
whether the home or business has excess solar electricity;
the choice of electricity tariff;
income available from allowing the battery to export to the grid and trade your excess electricity;
whether you use electric vehicles which could benefit from cheap rate electricity at night;
the home or business electrical load – there are economies of scale with larger solar and battery systems.
For larger homes and businesses, or where there is a clear oversupply of solar power, battery storage makes sound economic sense. For smaller properties, the factors set out above will determine economic viability. Now could be the right time to invest in an energy storage battery. Contact us or visit our website to find out more about energy storage for homes and businesses.