Will energy storage be worth it if the energy price is capped?

[George]

I've got 5.5kW of solar, generates 5MWh per year fairly reliably.

 

To make better use of that energy we had a quote for a 9.5kWh battery for £7k. 

 

I know I don't have enough information to know exactly how much I could save, since I don't know what utilisation I make of solar. I also don't currently have a smart meter or time of use tariff, which limits the battery payback for now. 

 

However, with prices heading towards 50p/kWh even pessimistic estimates meant the payback time was reasonable. 

 

So question is, what are people's thought about the plans for capping energy prices? Will the likely mechanism that we pay back with elevated energy prices over a long period still mean my original calculation is still sound?

 

Or will general high inflation just make buying it now a better decision by default? 

 

 

[Temp]

Do you know how much you export? At best a battery should allow you to use that rather than export it

[SteamyTea]

To make the sums simple, let us say that the 9.5 kWh system can reliably deliver up to 7 kWh and it will last 10 years.

So that is £1000/kWh installed, or, over the lifetime, 4p kWh delivered.

Now if you import energy to charge the battery, you have to add the 4p to the kWh price i.e. 20p/kWh on E7, so a total of 24p.

If you use your PV, you really need to work out what each kWh it generates costs you.

So say your system costs £1000/kW_p and each kW_p yields 1,000 kWh/year and your system lasts 10 years.   Each kWh of electricity costs you 10p.

So if used via the batteries, 14p/kWh.

The mean price if half is imported at 20p/kWh and half PV generated at 14p/kWh is, once the costs of the batteries is included, works out at 19p/kWh.  So up to £1.33/day.  That is a mean price, it will vary during the year, winter it will be closer to the higher price of 24p/kWh, summer, no use at all.

Now none of that really helps you much as it does not take into account your usage patterns and your generation profile.

You may use a lot of electricity in the evenings, in the winter, and very little during the day.

Work out your usage patterns (get reading that meter 4 times a day or make a logger) and though PVGIS work out your hourly generation profile.

Then see how they match up.

 

Also, consider fitting a storage heater connected to a PV diverter (I assume you already have one for your DHW).

One or 2 1.5 kW/10.5 kWh storage heaters can save you a bit on space heating (stick them where they are useful, not out of the way).  No use in summer, but the rest of the year it will be useful, sometimes.

 

I don't know what car you drive, or how many miles you drive it, but a more economical car will almost certainly save you more.

Edited September 6, 2022 by SteamyTea

[George]

Thanks - I'll start a detailed energy use log for a few days and see where I get to. I would think most electricity use is in the evening.

 

 

I did look at an Eddi, but that wasn't available at the time. Now looks to be £435 

 

 

I think with the battery it is a bit of a gamble that load shifting gets rewarded and off peak tariffs become more widely available. 

[Kelvin]

My guess is load shifting is the likely direction of travel especially with increased number of EVs. I had planned battery storage for our build but still in two minds about it. 

[Trw144]

9 hours ago, SteamyTea said:

If you use your PV, you really need to work out what each kWh it generates costs you.

So say your system costs £1000/kW_p and each kW_p yields 1,000 kWh/year and your system lasts 10 years.   Each kWh of electricity costs you 10p.

Surely the solar is now a sunk cost and should be ignored for the purpose of calculating on installing a battery or not.

[SteamyTea]

8 minutes ago, Trw144 said:

Surely the solar is now a sunk cost and should be ignored for the purpose of calculating on installing a battery or not.

That is up to the individual to decide.

£5k would buy me around 6 years of electricity at todays prices.

And I would still have £5k in the bank.

[Trw144]

13 hours ago, SteamyTea said:

That is up to the individual to decide.

£5k would buy me around 6 years of electricity at todays prices.

And I would still have £5k in the bank.

But the OP already has the solar panels on his roof not money in his bank and that can't be changed, so the calculation is whether the additional cost of a battery is beneficial.

[George]

Solar panels paid for themselves years ago. It's all FIT + reduced electricity costs, at least until the inverter goes pop.

[Spacey73]

I can not justify the cost of ‘installed’ batteries. I bought 16 x 320ah Eve automotive lifepo4 cells, a really good 200a BMS fully programmable in a solid steel case with display. 17kwh for £3,400. So good I bought 2. 
 

Cells will die from age before they run out of cycles. Now it’s getting harder on a cloudy day for solar I’m just charging on cheap £0.14 kWh to 30% and then use battery at 7am at £0.42 and wait for solar to catch up depending on weather.

 

battery is called Seplos. 

[Benguela]

16 hours ago, Spacey73 said:

I can not justify the cost of ‘installed’ batteries. I bought 16 x 320ah Eve automotive lifepo4 cells, a really good 200a BMS fully programmable in a solid steel case with display. 17kwh for £3,400. So good I bought 2. 
 

Cells will die from age before they run out of cycles. Now it’s getting harder on a cloudy day for solar I’m just charging on cheap £0.14 kWh to 30% and then use battery at 7am at £0.42 and wait for solar to catch up depending on weather.

 

battery is called Seplos. 

Hi Spacey73,

 

Interesting!

 

What inverter do you use with that Seplos battery?

[JamesPa]

I just did some back of the envelope calculations for myself.  The rationale might interest others and the answer is a definite maybe, (ie yes if several factors work out in favour, but no by default). 

 

I have solar panels and a solar diverter to heat my hot water (doing this seems to be a no brainer financially).  I don't have an electric car (yet).

 

For about 6-8 months of the year I get more energy from the solar panels than I use in hot water heating and daytime electricity consumption.  I know this because the hot water needs to be 'topped up' from sources other than solar between mid Oct & Mar. So let’s call it 200 days per year that I have excess generating capacity.  The other days don't matter because there is no excess capacity to store, so the batteries will perform no useful function.

 

The maximum I can store each day is the capacity of the battery, thus this becomes the limiting factor on the savings.  Therefore my maximum annual import saving from battery storage is 200kWh per kWh battery capacity.

 

With electricity at 34p/kWh import and about 5p/kWh export, this translates to just £58 per kWh of battery capacity.  Since battery storage systems seem to be £500-£1000 per kWh and seem to last about 10 years, there is no viable business case with this simple calculation (and there isn’t an environmental case given that, without onsite storage, the excess energy is exported to the grid).

 

I were to switch to a tariff with a cheap night time rate (and assuming AC coupled batteries so that I could charge from imported electricity), the numbers get a bit more favourable.  Octopus offer a 10p/kWh night time tariff aimed at EV charging (so far as I am aware they aren’t fussy how its used).  So for the 166 days of the year when I don’t have excess solar capacity, I could save 24p/kWh of battery storage capacity by charging them at night, a further £40 saving per year.  This saving would be offset during periods of peak daytime usage, when I am forced to import at a higher rate than I otherwise would, but with a bit of clever shifting of loads that might be a fairly small given that the batteries would do some smoothing.  So, generously, that gets me to £100 saving per year per kWh battery capacity. 

 

Based on £1000 per kWh battery system cost and a 10 year life it still doesn’t work out, because I only just cover the cost over its lifetime.  However if the battery cost is only £500 per kWh there is a return of £500, roughly 10% per year, which isn’t a bad figure. 

 

If energy prices double or battery prices halve the calculations become more favourable.  Of course if energy prices fall back to pre-war levels then the case is shot.

 

I would have guessed that these calculations apply, more or less, to quite a large number of people assuming they have got a solar diverter (and if they haven't, then they should).  

 

 

[Nick Thomas]

Quote

With electricity at 34p/kWh import and about 5p/kWh export

 

If you're with octopus you can get 15p/kWh export, which helps a fair bit.

 

 

Quote

I have solar panels and a solar diverter to heat my hot water (doing this seems to be a no brainer financially).  I don't have an electric car (yet).

 

Again, with export at 15p/kWh, this all starts to look a bit different too. Feeding my heat pump to heat the water, the worst case is exporting at 15p to later import at 34p; I get a bit under 1.5kWh of heat per kWh solar exported that way, rather than the ~1kWh heat/kWh solar the diverter gives me. Mind you, payback on the heat pump is a whole other game.

 

More generally, with import/export at these levels, the grid can be thought of as a battery with 50% efficiency. Since it's free, any installed battery has to compete with that, which makes payback a lot harder.

 

I'm still getting batteries, though. They'll still be there when the grid fails!

[Nick Thomas]

Huh. Never mind the heat pump - even with gas, exporting 1kWh electricity at 15p lets you import 1.5kWh of gas (10p/kWh), which you can burn for ~1.5kWh of heat. What a world.

[SteamyTea]

54 minutes ago, Nick Thomas said:

What a world.

(expletive deleted) that, can get £3/kWh for not using any.

https://www.bbc.co.uk/news/business-63329233

[Radian]

4 minutes ago, SteamyTea said:

(expletive deleted) that, can get £3/kWh for not using any.

https://www.bbc.co.uk/news/business-63329233

I didn't use 333,333kWh yesterday. Does that make me millionaire?

[SteamyTea]

8 hours ago, Radian said:

I didn't use 333,333kWh yesterday. Does that make me millionaire?

Yes.

If it was based on historic data, it would have required a smart meter, which EDF have not managed to fit yet.

[Nick Thomas]

...time to get a much larger battery 🤑

[JamesPa]

14 hours ago, Nick Thomas said:

 

If you're with octopus you can get 15p/kWh export, which helps a fair bit.

 

Yes, and makes the argument for a battery even weaker!

[JamesPa]

14 hours ago, Nick Thomas said:

Feeding my heat pump to heat the water, the worst case is exporting at 15p to later import at 34p; I get a bit under 1.5kWh of heat per kWh solar exported that way, rather than the ~1kWh heat/kWh solar the diverter gives me

Good point.  As you say with a decent export rate and a decent heat pump it might well be worth using the HP to heat water (rather than a solar diverter) and accepting an increase in exported power. 

 

If your COP (at the ambient temp when you heat water and whatever flow temp you use for water heating) is greater than the ratio of import price to export price (plus a bit of margin for system losses), you are better off using the HP and disabling the solar diverter, even if you are importing while the water is heating.  With a 15p export rate and capped import rate of ~34p it probably is greater most of the time when there is excess solar power (the possible exception being cold, sunny winter days where the COP will be low but the solar production high).  At the more usual 5p export rate or if the cap on import rate is lifted without a corresponding uplift in export rate, then its less likely to work out in favour of using the HP.

 

 

[George]

12 hours ago, Nick Thomas said:

...time to get a much larger battery 🤑

I did put the order in, plus an extra 2.4kW of solar (if the DNO says yes). 

 

Won't get installed until March but in time for the price cap to end. Fully aware prices could drop back to 'normal'. But a non-financial benefit is I should be close to being energy neutral, even if I still rely on the grid. 

[Spacey73]

On 21/10/2022 at 09:20, Benguela said:

Hi Spacey73,

 

Interesting!

 

What inverter do you use with that Seplos battery?

It’s the big green one that I overpaid for as I’ll never use battery backup…doh could have saved £300. It’s on the Voltacon website hybrid 48v inverters for about £1,600. Using the 8kw one from there as well for way cheaper when it’s finally got the new board fitted.

[Spacey73]

On 22/10/2022 at 11:36, JamesPa said:

 

Yes, and makes the argument for a battery even weaker!

The thing is…is that prices are changing as fast as our prime ministers. I can’t base a long term purchase on prices that might stay or might be taken away. Off grid is aim but with grid as backup should anything break. Battery essential for this 2hrs of breakthrough sunshine powers house for day. 

[Marvin]

On 22/10/2022 at 12:03, JamesPa said:

Good point.  As you say with a decent export rate and a decent heat pump it might well be worth using the HP to heat water (rather than a solar diverter) and accepting an increase in exported power. 

 

May be but we heat the hot water higher than our ASHP to last the next day as well in case there is not enough PV.