Solar Battery - Yes/No?

BBL70

I'm back with another solar related question, but first of all wanted to thank @Screwdriva for his help in getting my solar installation quote down significantly. 

The question:

What are the factors (or does anyone have a algorithm/calculator) to help decided if I should add battery storage to solar panels?

For context the system is likely to be around 7kW of generation and the house is 100% electric using approx 10,000 units annually.

What should I be considering?

Reed_Richards

I have an all-electric house which used about 8200 kWh in 2021.  I have 4.8 kWp of generation and and a 6.5 kWh battery.   On a reasonably sunny day in summer I can heat the hot water, fully charge the battery and have enough stored power to see me through to the following day (and still have more power than I can use in the afternoon).

In winter I use electricity faster than I can charge the battery but it still helps to smooth out demand so if the electric heating is off for a while whilst the sun is out the battery can build up a bit of charge to use when the heating comes back on.

I don't know if getting the battery was the right decision on purely economic grounds but for the convenience of not having to worry about using electricity mostly when the sun is shining, it is a tremendous boon.            

Screwdriva

Glad I could help! 

I think the answer to your question will become clearer when you model your consumption of electricity based on the previous year's usage data, your cost of electricity going forward, and the Agile Outgoing SEG tariff at 20p, 30p, 40p, 50p averages. 

For example, I used 200 kWh in December, it would cost me £X at 0.52p per kWh and Solar PV would generate 100 kWh, of which I'll use 30kWh at 0.52 per kWh and sell 70 kWh via Octopus Outgoing Agile at 20/30/40/50p. 

Reed_Richards

Octopus Outgoing Agile represents a huge distortion to the normal economic case for getting a battery.  In my case I don't have, and don't seem to be able to get, a smart meter so apart from leaving me a bit frustrated, it's not an issue.  

Exiled_Tyke

The calculation is an Internal Rate of Return. Excel can do this.  You need to estimate the benefits in terms of how much import electricity you will save at what price and for what period with a battery.   I have found my self-usage has gone from around 40 upto 60%.  For my calculations I used a pre-crisis rate of 15%.  However I also by from the grid at 7.5p (prior to June) at 5p overnight.   So that is an additional saving.   At current rate the savings are obviously far more substantial. I have calculated that my annual saving is around £550. On an investment of £3000.  Over 20 years this gives me an IRR of around 17%. But of course we all expect electricity prices to settle down again. 

Screwdriva

Exiled_Tyke said:

The calculation is an Internal Rate of Return. Excel can do this.  You need to estimate the benefits in terms of how much import electricity you will save at what price and for what period with a battery.   I have found my self-usage has gone from around 40 upto 60%.  For my calculations I used a pre-crisis rate of 15%.  However I also by from the grid at 7.5p (prior to June) at 5p overnight.   So that is an additional saving.   At current rate the savings are obviously far more substantial. I have calculated that my annual saving is around £550. On an investment of £3000.  Over 20 years this gives me an IRR of around 17%. But of course we all expect electricity prices to settle down again. 

I believe the question is what your savings would be if you didn't have a battery and exported via Octopus Agile vs. if you did as you currently do and use your battery.

Alnat1

The Agile Outgoing rates are not always going to be so high and basing the decision mainly on that is not the best idea.

You have to have electricity supplied by Octopus to be able to get Agile Outgoing rates. The rates for supply at the moment, unless you have an EV are 78p max on Agile/Tracker or the SVT at 52p which will probably go up again in Jan. 

One reason I decided to go with a battery was because I expect in future TOU tariffs will be available, rewarding people who don't use much from the grid between 4pm-7.30pm. I can avoid doing that most days of the year with a battery.

I'm Agile in (got on the 35p caped rate in July) and out and yes, I've done very well out of it this summer but my decision to get a battery was not based in anyway on this. I'm just happy that with a battery I can carry on using "free" electricity after the sun goes down and sometimes even make my breakfast toast and cuppa tea with it.

Exiled_Tyke

Screwdriva said:

Exiled_Tyke said:

The calculation is an Internal Rate of Return. Excel can do this.  You need to estimate the benefits in terms of how much import electricity you will save at what price and for what period with a battery.   I have found my self-usage has gone from around 40 upto 60%.  For my calculations I used a pre-crisis rate of 15%.  However I also by from the grid at 7.5p (prior to June) at 5p overnight.   So that is an additional saving.   At current rate the savings are obviously far more substantial. I have calculated that my annual saving is around £550. On an investment of £3000.  Over 20 years this gives me an IRR of around 17%. But of course we all expect electricity prices to settle down again. 

I believe the question is what your savings would be if you didn't have a battery and exported via Octopus Agile vs. if you did as you currently do and use your battery.

Not necessarily. It's what works best for you.  I'm on a FIT and have been on an Octopus Go tariff for a while  and so am not eligible for Agile outgoing.  The certainty of all this is preferable to SEG and Agile (which is volatile) for me.   Others not entitled to FIT will need to make their own decision as to the risk and return of going with Agile.  

Screwdriva

Alnat1 said:

The Agile Outgoing rates are not always going to be so high and basing the decision mainly on that is not the best idea.

Every available bit of information I can find tells me that Agile will likely be substantially higher for the next year at a minimum, if not the next few. There appears to be a semi tangible link between the price paid and the price of natural gas used to power our grid, which as we all know isn't looking likely to reduce anytime soon! 

Exiled_Tyke said:

  The certainty of all this is preferable to SEG and Agile (which is volatile) for me.   Others not entitled to FIT will need to make their own decision as to the risk and return of going with Agile.  

The certainty is available for FIT beneficiaries but for anyone installing solar now, the question of payback with the upfront cost of a battery at £6K minimum vs. selling that energy for a lucrative tariff is the crux of this post 

Exiled_Tyke

Exiled_Tyke said:

  The certainty of all this is preferable to SEG and Agile (which is volatile) for me.   Others not entitled to FIT will need to make their own decision as to the risk and return of going with Agile.  

The certainty is available for FIT beneficiaries but for anyone installing solar now, the question of payback with the upfront cost of a battery at £6K minimum vs. selling that energy for a lucrative tariff is the crux of this post 

And no one knows the answer to this. We all have to form our own judgement on the future of prices.   But a battery does (to some extent) hedge against this.  Finally as I've said many times before on these threads payback is not ever a suitable method for appraising an investment. 

Screwdriva

Exiled_Tyke said:

And no one knows the answer to this. We all have to form our own judgement on the future of prices.   But a battery does (to some extent) hedge against this.  Finally as I've said many times before on these threads payback is not ever a suitable method for appraising an investment. 

I don't believe either of these points to be accurate. You can model average prices of 10-60p to determine the point at which an export tariff outperforms battery savings and then just follow global events to see where prices are trending.  

As far as the importance (or lack of) payback on an investment goes, I'm afraid you're in the absolute minority there.