Thursday, 16 June 2016

Is it worth getting battery storage to go with your solar PV?

Now that the Feed in Tariff rates are reduced and PV is hard to sell, some solar power companies are pushing battery storage instead, to people who already have PV. Unless you are very eco-minded you probably expect the system to at least pay for itself but it is very hard to estimate savings. I have just been visited by salesmen who made some rather misleading statements. Here are some things to ask and some very simple calculations you can use to fact check what the salesman tells you.

Also, always get at least two quotes.



By the way, I won’t say which company sent the salesman I have just been listening to. This advice applies to all companies.

Misleading statement 1: putting in a battery system will not affect your generation meter readings (and hence your FiT payments) because the generation meter comes before the inverter.

It is not true that the generation meter comes before the inverter. The DC power from your panels is converted by your inverter to AC and this is what the generation meter measures. This incorrect statement from the salesmen immediately made me suspicious. They could be lying or simply misinformed or confused. Either way, everything else they said should be considered carefully.

In this case, the system being offered connected the battery to the inverter so it would definitely reduce our payments at least a bit. Connecting the battery behind the inverter (DC connection) avoids an extra inverter for the battery but is only possible for some inverters and configurations. Suppose the battery is 95% efficient. Then for every 1000 kWh stored and used later, 50 kWh is lost and only 950 kWh goes through your generation meter. For us (at about 50p/kWh) that would mean our Feed in Tariffs reduce by about £25/year.

Misleading statement 2: you can reduce your electricity bill drastically (if you take care to use as much power as possible when the sun is shining through the day).

The salesman made no guarantees but they said we could save up to £1000/year. This is because I said our bill was £1500 per year which is about 3 times our actual bill. They already knew we had a small system (1.8 kWp) and you cannot reduce your bills by more kWh than you generate. To save £1000/year we would need to generate at least 7100 kWh/year. In practice we only get about 1300 kWh/year.

Using power when the sun is shining is a good idea anyway, whether or not you have a battery. Running your washing machine off your own power when the sun is shining costs you nothing. Running it in the evening or when it is cloudy, so you have to draw power from the grid, will add to your bill.

Misleading statement 3: Since we work from home we will get more benefit from the battery

This is not true. Since we work from home we use a lot more of the power from our PV panels directly so there would be less spare power for the battery.

Predicting the savings from your PV is really hard. It depends on your PV system, the battery size, and your usage - not just how much you use but when. I have written about this in more detail before but here are some very simple calculations that can at least give you an upper bound on your savings. I have coded them into a tool you can use for yourself on my website. Read on if you want to know exactly how it works.

All my examples here assume the price of electricity is 14p/kWh. Life is more complex if you have Economy 7 or another time varying tariff.

Rule 1: The battery can give you no more than the energy you have generated.

Annual generation: 1600 kWh/year
Max savings 1600 x 0.14 = £224/year

Annual generationMaximum Savings
1,600 kWh/year (Cambridge 2kWp)£224/year
3,200 kWh/year (Cambridge 4kWp)£448/year


This simplest possible example assumes that before you have the battery you use none of your generated electricity and afterwards you use all of it. That is, your self-consumption rate has gone from 0% to 100%.

You can check your annual generation if you have kept the readings you give to your FiT company. Also if you still have your original documentation it should include a prediction of your annual generation.

1600 kWh/year is reasonable for a 2 kWp system in Cambridge. The sales company I spoke to was targeting people with at least 8 panels or 2 kWp and charging £5000. That means the payback time for a 2 kWp system would be at the very best 22 years - probably longer than the lifetime of the battery.

Rule 2: The battery can only save you energy that you use.

Check your bills. The battery cannot possibly save you more than this.

Annual bill (excluding standing charge) £420 year
Max savings £420/year

A medium user is typically about 3200 kWh/year. If you have PV panels you probably use at least some of the output already so say 3000 kWh/year. At 0.14 p/kWh that will cost you £420/year. The £5000 system I was offered would take at least 12 years to pay back.

Rule 3: Calculate summer and winter separately to improve your estimate.

In practice you are likely to be limited by Rule 1 in winter, when generation is low, and Rule 2 in summer, when generation is high.

You will get about 67% of the PV yield during the summer months April to September and only 33% during the other months.

In practice your bills are almost certainly higher in winter than in summer but as a worst case let's assume they are all the same all the year round. This example is based on the 4 kWp system and a medium user as before.

Annual generation 3200 kWh, £450
Annual bill 3000 kWh, £420
Months (% of generation)Generation (kWh)Consumption (kWh)Generation (£)Consumption (£)
Apr-Sep (67%)21401500£300£210
Jan-Mar, Oct-Dec (33%)10601500£150£210

In the summer savings are are limited by consumption to 1500 kWh/year, £210
In the winter savings are limited by generation to 1060 kWh/year, £150
Maximum savings 1500 + 1060 = 2560kWh/year, or £210 + £150 = £360

At £360/year the £5000 system I was offered would take at least 14 years to pay back.

Rule 4: Factor in the reduction to your Feed in Tariffs (if the battery is connected to the inverter).

This only affects you if the battery will be connected to the inverter so behind the generation meter, as already described. If you have an AC connected system this is irrelevant.

In our case we get about 50p/kWh from the FiTs (including the export tariff). This is very high because we were early adopters. In your case it may well be less.

To do this calculation you will need to find out what the charge/discharge efficiency of the battery is which depends on the type. It is likely to be 80% to 95%.

Battery efficiency 95% (so losses 5%).
FiTs 50p/kWh
Basic bill savings 14p/kWh
Actual bill savings 14 - (50 x 0.05)= 11.5p/kWh
Savings reduced to 11.5/14 = 82%.
Applying this to the £360/year calculated above: 360*0.82 = £295/year


Rule 5: Check the battery guarantee is longer than the payback time

From the savings/year calculations and the quoted cost you can calculate a payback time. Assuming this is what you want, you need to make sure that the guaranteed lifetime of the battery is at least this long. Or, make sure you have battery replacements factored into the cost.

Maximum savings £295/year
System cost £3200
Mimimim payback time 3000/295 = 11 years

Other things to be aware of.

These calculations are for maximum savings. In reality your savings will somewhat less, depending on how much of your panel power you use already and how your consumption varies through summer and winter time.

The battery has a limit to how much it can store. If you get 8 kWh during the day and you only use 1 kWh, you have 7 kWh left over but your battery is likely to be smaller than this. Also a battery cannot fully discharge without damage. A 4 kWh battery might only give you 3 kWh useful storage, depending on the battery type. This factor limits how much savings you can make from your battery during the evening and overnight. However, if you use power during the day the battery can help you then as well. For example if it charges in the morning and then is cloudy for a while and then sunny again, it can give you some power when it is cloudy if you need it. So the battery storage capacity is not a hard limit to the savings/day calculation but it is something to think about, especially if you do not use much during the day.

There is a limit to how fast the battery can charge and how fast it can discharge. This depends again on your battery type, but a 4 kWh battery might be limited to 3.2 kW  for both charge and discharge. In practice you will rarely get more than that from your panels and you will not need more than this unless you have an electric shower.

Battery storage is more likely to be economic with smart meters and time of use tariffs.

When we all have smart meters, then it is likely that energy companies will offer time of use tariffs with expensive peak time power and cheap power at other times. You are unlikely to be forced onto these tariffs but if you do choose to take them up this increases potential savings from batteries. You can make use of cheap off-peak power and rely on the battery to provide expensive peak time power. However calculating your savings will be even more complicated.

This article was changed 17/Jun/16 to reduce the battery system cost and to point out that DC connection is not always possible.

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