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On-grid domestic battery storage

edited 30 November -1 at 1:00AM in Green & Ethical MoneySaving
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  • ZarchZarch Forumite
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    Is this right then?

    I pay 13p per kW for my imported electricity.

    If I could max fill up the battery from excess solar every day that would save me 4 x £0.13 (£0.52) each day if I then used all of it?

    365 x 52p = £189.80 saved per year, so over 10 years i'd save £1898.

    A 4kWh battery is currently £3277. So it doesn't add up yet?

    At 13p per unit, the battery would need to be less than £1898?

    Granted, with inflation on energy prices over 10 years that estimation could rise to £2500 saved. But we still aren't quite there yet are we?

    Does that all sound about right? If not, what have I missed?
    17 x 300W panels (5.1kWh) on a 3.68kWh SolarEdge system in Sunny Sheffield.
    4.8kWh Pylontech battery storage system with Lux AC controller
    Creator of the Energy Stats UK website and @energystatsuk Twitter Feed
  • EricMearsEricMears Forumite
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    Zarch wrote: »
    Does that all sound about right? If not, what have I missed?
    You also have to estimate (guess ?) how many times you can take the battery from completely empty to completely full and back again then divide that number into the cost of the battery(ies) to get a cost per cycle figure. Divide that by the size of the battery to get a cost per kWh and subtract that from your 'saving per unit'

    You could probably reduce that cost/kWH stored if you never completely fill or empty the battery to 'de-stress' it and make it last longer.
    NE Derbyshire.
    4kWp S Facing 17.5deg slope (dormer roof).
    BEV : Nissan Leaf e+
  • Martyn1981Martyn1981 Forumite
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    Zarch wrote: »
    Is this right then?

    I pay 13p per kW for my imported electricity.

    If I could max fill up the battery from excess solar every day that would save me 4 x £0.13 (£0.52) each day if I then used all of it?

    365 x 52p = £189.80 saved per year, so over 10 years i'd save £1898.

    A 4kWh battery is currently £3277. So it doesn't add up yet?

    At 13p per unit, the battery would need to be less than £1898?

    Granted, with inflation on energy prices over 10 years that estimation could rise to £2500 saved. But we still aren't quite there yet are we?

    Does that all sound about right? If not, what have I missed?

    I think you have the basics, yes. Assuming that you have 4kWh spare to store each day (in the winter I don't), and you have 4kWh of demand to offset from storage (in the summer I don't). But heat pumps and EV's might change the demand side for me allowing use of much more generation (with storage) for 9 months of the year.

    Or, as Eric suggests you can come at it from the other direction and calculate the cost of using the batt and see how that compares to the leccy price. If we ever see export being metered, then you also have to deduct the lost export money.

    Regarding inflation, I wouldn't bother. To save time and headaches, I kinda (lazily) let inflation and cost of capital (lost interest) balance each other out. If energy inflation is significant, then you would include it, but it looks like such fears are now groundless. At worst the NAO suggest perhaps a 50% increase in wholesale prices over the next 10yrs, before costs fall back down again. Note that 50% of wholesale is about 2p to 2.5p/kWh on the retail price.

    The big wins for battery economics are prices (falling) and life expectancy / life cycles (rising).

    Purely for fun, think how different the picture looks if the leccy price is 15p+ (perhaps a NSC account), the batt cost falls to £2.5k, and the life / cycles double?

    You won't get rich, you won't save a lot of money, but long term you might benefit, and help to green up the grid a bit.
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
  • edited 2 November 2018 at 6:25PM
    TrevorLTrevorL
    18 posts
    edited 2 November 2018 at 6:25PM
    Zarch wrote: »
    Is this right then?

    I pay 13p per kW for my imported electricity.

    If I could max fill up the battery from excess solar every day that would save me 4 x £0.13 (£0.52) each day if I then used all of it?

    365 x 52p = £189.80 saved per year, so over 10 years i'd save £1898.

    A 4kWh battery is currently £3277. So it doesn't add up yet?

    Granted, with inflation on energy prices over 10 years that estimation could rise to £2500 saved. But we still aren't quite there yet are we?

    Does that all sound about right? If not, what have I missed?

    Your approach is correct, and paybacks are typically in the region of 8 to 13 years depending on the size of system, customer use pattern, etc.. The batteries are warrantied for 10 years but customers are assuming that they will last significantly longer, though of course at a lower capacity. When we run our financial model we assume 2% capacity degradation per year and an annual price rise of 8.4%.

    Let's consider a different example to yours. The average UK price for a kWh is about 15p (the average is higher for renewable electricity). So if we consider the SX63-4 model, just so I can be accurate about prices (other systems are available), then you get 25.2 kWh for £12k. In the first year you could save about 25 x £0.15 x 365 = £1350. At 8.4% price inflation that's £1500 in the second year, then £1600 in the 3rd year, etc. In that case, for a high energy user with deep pockets, payback is after about 7 years.

    Let's return to your figure of £0.13 with a more typical battery size, a SX45-2 with 9kWh for £5k. Potential first savings are 9 x £0.13 x 365 = £427. At 8.4% price inflation that's £463 in the second year, then £502 in the 3rd year, etc. Payback is about 9 years. So not bad.

    Having said all that, I'd be the first to say these examples are not entirely accurate which is why we have a very complex mathematical model that we run for customers, this is just to illustrate that people are buying home batteries for sound financial reasons. At the same time they benefit from fixed electricity costs, power cut backup, at least partial independence from the grid and the Big 6, and simply knowing where their electricity comes from. These are significant issues for many people.
  • Martyn1981Martyn1981 Forumite
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    TrevorL wrote: »
    we assume 2% capacity degradation per year and an annual price rise of 8.4%.

    :doh: Even by my standards that was a short term relationship. Just 5hrs and 4 posts.

    Oh well, time to log in to Screwfix and order more barbed wire and trenching equipment.
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
  • pinnkspinnks Forumite
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    Hmm, don't mean to be rude and I appreciate that you say you use a more complex model for customers (and need to be careful how you post here) but if anyone tried to sell me a battery with an assumed 8.4% inflation figure and 100% daily charge and discharge 365 days a year I would show them the door.

    I have a 5+kWp system and while I can generate up to 30kWh a really good day in the summer, the average expected for my system is about 19kWh per day in the middle of summer. All good for saving 9kWh per day but I wouldn't use more than about 3kWh of that during the dark hours, so it doesn't really help being able to save 9. In reality I would be topping up by 3 or 4 per day during those months, say 8 months for ease and say 5kWh per day to average out using a bit more at the beginning and end of those months when the nights are longer. So, the reality is more like 5*0.13*240 = £156 in that period.

    For the other 4 months my average daily excess generation is perhaps 2kWh which of course I would store and use, so 2*0.13*125=£32.50. This makes a more realistic annual saving of about £190, which as it happens is not a million miles away from Zarch's guess.

    In terms of inflation etc, I am with Mart and would generally ignore it but certainly wouldn't entertain 8.4%. My leccy price has increased by 4.5% over the last 6 years. True, it fell by 20% and then rose by 25% but estimating over 8% rise per year is not really reflected by recent events...

    So, the maths doesn't yet pan out for batteries for me, though I wish it did.

    There are some on here with deep pockets who have opted for batteries for green reasons but for most of us the prices still need top drop to below £2,000 for a 9kWh plus system...
    Wiltshire - 5.25kWp
    3.5kWp: 14 x Phono Solar 250 Onyx, Sunny Boy 4000TL, WSW 40 degrees, June 2013
    1.75kWp: 7 x Phono Solar 250 Onyx, Sunny Boy 1600TL, SSE 45 degrees, March 2014
  • edited 2 November 2018 at 8:58PM
    zeupaterzeupater Forumite
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    edited 2 November 2018 at 8:58PM
    TrevorL wrote: »
    ... Let's consider a different example to yours. The average UK price for a kWh is about 15p (the average is higher for renewable electricity). So if we consider the SX63-4 model, just so I can be accurate about prices (other systems are available), then you get 25.2 kWh for £12k. In the first year you could save about 25 x £0.15 x 365 = £1350. At 8.4% price inflation that's £1500 in the second year, then £1600 in the 3rd year, etc. In that case, for a high energy user with deep pockets, payback is after about 7 years.

    Let's return to your figure of £0.13 with a more typical battery size, a SX45-2 with 9kWh for £5k. Potential first savings are 9 x £0.13 x 365 = £427. At 8.4% price inflation that's £463 in the second year, then £502 in the 3rd year, etc. Payback is about 9 years. So not bad ...
    Hi

    Sorry, but that's far too simplistic an approach resulting in far too optimistic a return! ...

    On the 25kWh system with a 25kWh/day usage you'd need to have a property with an electrical demand of at least 25kWh/day (so a minimum of around 3x UK domestic average) and have a solar array likely well in excess of 40kWp to get anywhere near being able to achieve an average 25kWh of charge into storage in mid-winter months & probably well over 100kWp to stand a chance of providing any kind of reasonable guarantee ... the incremental investment in solar would logically need to be added to the battery in order to calculate any form of storage payback on that basis so somewhere around £50k-£100k in addition to your £12k for a return of £1350/year ... then again, ensuring there's a need for 25kWh of overnight discharge in the summer would be more than a little problematical for most.

    There are reasons for having a 25kWh battery in a domestic property, for example - to provide multi-day autonomy for most of the year, however, that would reduce the number of cycle equivalents over a year with a corresponding reduction in annual savings ....

    Now, the 9kWh is interesting, it's probably in the region of what we would look to install, but even then the solar+storage payback assumption is overcooked ...

    A typical 4kWp system may average generation of ~16kWh/day in high summer, but that's not guaranteed, some days there wouldn't be enough available spare generation to charge to the batteries to full, whilst in achieving ~2.5kWh in mid-winter, little would be available to divert to storage as it'd mostly be used in the daylight hours ... some mid-winter days there'll be no generation at all, others may achieve ~7kWh or more, of which only ~5kWh would likely be available to store!

    What I'm attempting to convey is that it's no use using simplistic payback calculations for such technology on these threads as we've had this very discussion so many times ... having said that, I do like the concept of modular storage solutions as it provides the consumer with a potential growth-path (as long as the manufacturer has a long-term view on backward-compatibility of their product offerings) and the referenced range certainly looks to be more suitable to 'buy into' than the Powerwall, which has a minimum capacity configuration which would likely be far too large for the UK homes with solar considering that they would typically be far more energy efficient than average ... as such I tend to agree with... this article on the PW2's market positioning ... from last year that covered this very issue ...

    It's also relevant to note that until storage costs fall well below the £200/kWh level they will effectively remain far too costly to show any form of payback and that most wouldn't even consider 'investing' in one until the achieve a price point of ~£150/kWh, which for a 9kWh system would give a basic 'starting to get interested' range of ~£1300-£1800 installed, so a cell price of around/below $75/kWh would need to be achieved first ... additionally, at £100-£120/kWh for the battery solution, the solar+storage decision becomes a 'no-brainer & that's where the market segment will become very interesting! ...

    ... as for the energy price inflation assumption used within a justification ... we early PV adopters all saw that approach when talking to various solar panel salesmen, so let's not go anywhere near that one on batteries! ...

    HTH
    Z
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    B)
  • edited 3 November 2018 at 1:08PM
    TrevorLTrevorL
    18 posts
    edited 3 November 2018 at 1:08PM
    Martyn1981 wrote: »
    :doh: Even by my standards that was a short term relationship. Just 5hrs and 4 posts.

    Oh well, time to log in to Screwfix and order more barbed wire and trenching equipment.

    We rely on third parties to estimate future rises. The most recent update we've seen said 8.4% - I can't post links but you'll find it you Google for "UK Energy Price Rises Report 2017". Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    The second source clearly takes the view that electricity price rises over the last decade have little relevance to how they expect prices to increase over the next one as the market is being transformed.

    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.
  • edited 3 November 2018 at 1:33PM
    TrevorLTrevorL
    18 posts
    edited 3 November 2018 at 1:33PM
    pinnks wrote: »
    For the other 4 months my average daily excess generation is perhaps 2kWh which of course I would store and use, so 2*0.13*125=£32.50. This makes a more realistic annual saving of about £190, which as it happens is not a million miles away from Zarch's guess.
    zeupater wrote: »
    Sorry, but that's far too simplistic an approach resulting in far too optimistic a return! ...

    I agree, which is why I wrote "I'd be the first to say these examples are not entirely accurate which is why we have a very complex mathematical model that we run for customers." A key element of the model is it compares the savings for 3 cases:

    1. Staying on a 24 hour tariff and adding a battery
    2. Moving from a 24h tariff to an Economy 7 tariff with a battery
    3. Being on an Economy 7 tariff and adding a battery

    This is because a key benefit of these systems is that you can fill them with Economy 7 in the winter when solar generation is low. Obviously only by cycling the battery daily can you get good paybacks. Our model runs an optimisation algorithm to calculate the percentage of charge that a householder needs to put in from Eco7 to optimise their savings (e.g. 40% in October and March, 65% in November and February, 90% in December and January, or whatever).

    While Economy 7 had largely gone out of fashion, it's now back and increasingly popular because of the rise of EVs. Certainly a significant portion of our customers have an EV or are considering one, so they may not be representative of the country at large.

    With this approach instead of saving the cost of a unit by using solar, you are saving half the cost by using Economy 7.

    The results from the modelling are pretty clear - the shortest paybacks are for those who are already on Economy 7 and just add a battery. Next best is moving from a 24hr tariff to Economy 7 with a battery, and least savings go to those who just stay on a 2hr tariff and add a battery (in which it case it will be idle for much of the winter).

    Another key element that is often ignored is lifestyle. At the risk of pointing out the obvious - but it doesn't seem to have been highlighted so far - home batteries are for people with solar who are out during the day. If we get an enquiry from someone retired or at home with small children we tell them straight up that it's unlikely to save them money. The benefit is for people who are out during the day - they are generating free solar but don't get to use it without a battery.

    Forums are imperfect means of communication, but hopefully through conversing we will see that we're not a million miles apart.
  • Martyn1981Martyn1981 Forumite
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    TrevorL wrote: »
    We rely on third parties to estimate future rises. The most recent update we've seen said 8.4% - I can't post links but you'll find it you Google for "UK Energy Price Rises Report 2017". Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.

    1. Happy to go through all the latest CfD auction prices and estimates for nuclear and RE. We see the highest at £100/MWh for HPC, and of course gas lower, though we may see a rising carbon tax. So that's an increase of about 5p-6p/kWh on the wholesale price giving an increase of approx 33% on the retail price.

    But, we now have on-shore wind and PV going subsidy free at around £50/MWh, and off-shore wind CfD's at £64/MWh (£57.50 CfD bid at 2012 baseline price). So increases of about 1p/kWh on the wholesale price giving an increase of about 7% on the retail price.

    These increases are above and beyond 'normal' inflation.

    2. We also know that with better management and avoidance of peak prices, the annual average can be reduced, and we are starting to see the rollout of batteries as frequency response, being cheaper and faster than diesel farms or gas OCGT peakers.

    Interestingly, the adoption/rollout of storage, be it demand side, supply side, or both, will actually reduce the peak price and therefore the extremes of the peak in the peak and trough daily price cycles.

    3. We also have common sense and awareness, and a history of considering and pushing back on these claims of enormous leccy inflation dating back on these threads to about 2010 when some (not all) PV salesman and sites used them to justify prices.

    On that same subject, the exact same tactic is used, still, by one company - Project Solar - when posters come on and ask for advice on the deal they've been offered, which will almost always be 50%-100% more expensive than it should be, but seemed good to them when a breakdown of income was given. However the enormous leccy inflation figures are never written down on the quote, only made verbally.

    4. But, as you say, you can't take my word for it, so I'd refer you to the NAO who in 2015 revised down their peak price for leccy in 2029 of £85/MWh to a 2027 peak of £70/MWh - please see page 40.

    Then one year later, they further revised the peak down to £55/MWh through the 2020's, before dropping down towards £45/MWh and less in the 2030's - please see page 39.

    If we are generous and stretch to a 1.5p/kWh rise in the wholesale price, then we will see an approximate rise (from 15p/kWh retail) of about 10% over 10yrs, so about 1% pa simple, or 0.95% pa compounded. Again, this is the rise above and beyond normal inflation, but that can simply be put against the lost interest invested in a PV or batt system (cost of capital).


    A high energy inflation figure, compounded forward to improve the economics of an item is not going to go down well here - we've been there, seen it, fought tooth and nail against it, and got the memorial T-shirt to wear with pride.
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
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