This piece was kindly contributed by Dave Roberts, UK MD at energy storage specialist GivEnergy.
A home battery storage system can help you cut energy bills and carbon emissions. However, before diving in, there are plenty of factors you need to consider when choosing the right system for you. Break-even point, battery capacity, renewables, and everything else in between all require close attention. With high upfront cost, it’s important to see a home battery storage system as a long-term investment. Choose the wrong system, and you could end up with diminished ROI and slower payback periods. Choose the right system, however, and you’ll reap the financial and environmental rewards.
Here, we bring you five things you should consider before investing in a home battery storage system.
1. Upfront cost
How much you spend upfront will help determine how much a home battery can save you in the long-run.
The total upfront cost of a home battery includes the following:
- Battery unit and battery inverter
- Installation
… and if you want solar PV panels:
- Solar panels (number of, and quality of panels will affect overall cost)
- Installation
Here are the latest average battery and solar panel costs in the UK, according to figures from the Microgeneration Certification Service (MCS).
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Batteries
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For an average 1-2 bedroom property with 6 panels
Around £2,500
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For an average 3-bedroom property with 10 panels
Around £4,500
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For an average 4+ bedroom property with 14 panels
Around £8,000
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Solar panels
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For an average 1-2 bedroom property with 6 panels
Around £4,216
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For an average 3-bedroom property with 10 panels
Around £7,026
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For an average 4+ bedroom property with 14 panels
Around £9,837
Other things to consider in upfront cost
Remember that a home battery storage system is for the long-term. You want a system which will help save as much money as possible over as long a time frame as possible.
Pay attention to the following when choosing a battery storage system:
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Warranty / design life
Most home battery storage systems come with a manufacturer’s warranty, and will have a specified design life. (Note that those two figures aren’t necessarily the same length of time – design life will typically be longer than a warranty period.)
So, check that the system’s warranty / design life is in line with the anticipated savings to cover its cost.
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Depth of discharge (DoD)
DoD refers to the amount, in percentage terms, of battery capacity which can be discharged safely.
For example, let’s say a 12kWh battery has a DoD of 85%.
85% of 12kWh gives you a total of 10.2kWh. So, in practice, you can only use 10.2kWh of battery capacity before it needs to be recharged.
Batteries with a higher DoD will allow you to get more out of your battery. As a general rule of thumb, 80% DoD should be a minimum for home batteries. Premium products may go up to 100% DoD.
In the long-run, it might be worth spending a little extra cash upfront on a battery with higher DoD.
2. Payback period
Otherwise known as ‘break even point.’ Payback period refers to the time it takes to make enough savings to cover the upfront cost of your system.
Think of it like this.
Let’s say you spend £11,500 on a solar PV and battery storage system.
You save £11,500 on bills over seven years. Your payback period is… seven years.
You save £11,500 on bills over eight years. Your payback period is… eight years.
You get the idea.
Calculating your payback period is essential to make sure you choose a system which will save you money.
Other than upfront cost mentioned above, here are a few other things you need to factor into your payback period:
- Cost of electricity (if you’re storing cheaper electricity from the grid)
- Average use of electricity (factoring in seasonal variations, addition of high-powered devices, etc.)
- Generation of renewables (if you have installed renewable technology)
Let’s delve into some of these in a bit more detail.
3. Electricity usage
Knowing roughly how much electricity you use is the next key step towards sizing a home battery which will save you money.
Electricity usage is measured in kilowatt hours (kWh).
Let’s say you have a washing machine with a 1500W (1.5kW) power rating. You use it for three hours per week. That gives you a total weekly usage of 4.5kWh.
Use this simple formula to calculate the electricity usage of any electrical household device:
Power (kW) x no. of hours used = usage in kWh
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Monitoring electricity usage
Fortunately, keeping track of how much electricity you use has never been easier.
For monitoring overall household usage, a smart meter will suffice.
Meanwhile, for individual devices, you may want to consider using smart plugs.
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Adding high-powered devices
Your electricity usage may change over time as you add new electrical devices in your home.
New washing machine? New dishwasher? Lucky enough to have a hot tub?
Make note of how much electricity these devices will use.
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Seasonal variations
Think about how your electricity usage will change throughout the year.
For instance, average UK electricity usage tends to spike during December and January, and then drop over the summer months.
If you have a heat pump, your electricity will increase whenever you heat your home.
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Sizing a suitable home battery storage system
Here’s one idea for sizing a suitable home battery.
Make a rough calculation of your peak daily electricity usage during the course of a year; this will likely be during the height of winter.
You can then choose a battery storage system with at least enough capacity to cover said peak electricity usage. This way, you can get the most out of your battery storage system, even when your electricity usage is at its highest.
4. Cost of electricity
We know what you’re thinking.
‘A home battery storage system is supposed to save me money on bills. Why do I need to think about the cost of electricity?!’
Allow us to explain.
Let’s say you don’t have the means to install solar PV panels. Perhaps, you don’t have the roof space. Or maybe, you can’t afford a solar installation.
Standalone battery storage is a viable alternative, especially for those on a smart time-of-use tariff.
Charge your battery during off-peak hours when electricity is cheaper, such as overnight. You can then use that stored energy to power your home during more expensive peak hours.
This way, you can avoid more expensive electricity charges.
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For example…
… let’s say you live in the northeast of England and are on Octopus Energy’s Agile tariff.
During June 2024, the average electricity price during peak hours is 30p per kWh. Meanwhile, the average electricity price during off-peak hours is 15.8p per kWh.
In theory, this means you could save an average of 14.2p per kWh of electricity used, assuming you charge and discharge your battery strategically.
If standalone battery storage is for you, think about how much electricity your property uses during peak electricity hours. Choosing a battery with enough capacity to cover this usage will help you maximise the money you can save on bills.
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Even if you don’t have a standalone battery…
… factoring in electricity prices could still be important.
If you have solar, there will be days when your panels generate little energy. In this case, you may want to fill your battery up with cheap electricity from the grid to make up for the lack of solar.
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Bear in mind…
… nobody has a crystal ball and can’t say for sure what future electricity prices will be.
Electricity prices depend on:
- Your supplier
- Your tariff
- Price caps
However, getting a rough calculation will still help you size the right home battery storage system.
5. Solar PV
Home battery storage coupled with renewables is the perfect combination.
You have a means of generating clean energy, as well as a means of storing it for when you need it most.
Note that…
… other renewable technology can be combined with battery storage: wind turbine for home, hydroelectric generator, etc.
However, due to scalability and relatively low cost, solar PV panels tend to be the renewables of choice for homeowners.
So, for the sake of brevity, let’s stick to solar panels for now.
Solar and storage
To make the most of your solar PV panels, you need sufficient battery storage capacity.
Otherwise, a lot of the solar energy you generate will be wasted.
You need to know the peak power of your solar array. This is measured in kilowatt-peak (kWp). This number tells you the maximum amount of energy your panels can produce in ideal conditions. (I.e., well positioned panels in direct sunlight.)
When sizing battery storage to complement your solar array, consider choosing a battery with at least enough capacity to store your panels’ kWp.
This means on days when your solar panels are generating as much energy as possible, you’ll be able to store as much of it as possible.
What about days when you don’t generate much solar?
Inevitably, there will be days when your solar panels generate little energy, such as during cloudy and overcast weather.
On days like these, you could consider storing cheaper electricity from the grid to make up for the solar energy you don’t generate.
In short, your home battery storage system can be a mix and match between solar, and a standalone battery.
If you’re not sure about solar…
… check out this solar panel calculator from Energy Saving Trust. This will help you determine what kind of solar PV array is right for you.
So, can a home battery storage system really save you money?
With thorough consideration, the right home battery storage system really can save you money. Not to mention you can significantly reduce your carbon emissions.
All things considered, it’s near-impossible to size a home battery storage which will exactly meet your needs. Your energy needs may change over time. You don’t know what the price of electricity will be in 5, 10, 15 years’ time.
However, you can get a system which is as close as possible to meeting your needs, if you do your homework.
Consider that upfront cost, calculate that capacity, and size up that solar.
This will give you the best chance of choosing a home battery storage system which will save you money in the long run.
Good for you. Good for your bills. Good for going green.
