Do I Need a Battery System and What’s the Payback Period?

There’s been much talk in recent times about the benefits of battery storage for renewable systems such as solar. There’s currently a lot of time and investment going into research and development, including by the UK government who are looking to put some £246 million into the technology over the next few years. You can expect big things to happen over the next decade or so.

The Benefits of a Battery System

While home owners have been finding it more affordable than ever to install renewable technology such as solar, the prospect of being able to store that electricity has been a little harder to come by. With new products such as Tesla’s Powerwall coming onto the market, we’re at last beginning to see the real benefits of being able to access our energy 24/7.

  • A battery system essentially allows you to store electricity for when the sun isn’t shining or the wind isn’t blowing.
  • That means you can maximise the amount of power you get from your solar panel installation and reduce your reliance on the grid.
  • With the UK Government looking to reduce the solar industry’s reliance on feed in tariffs and subsidies, it makes sense to focus on battery storage to improve the return on investment from installing panels.
  • If you’re living off grid, installing a battery system is vital if you want to have electricity at all times of the day and night.

The Cost of Storage

Of course, the first question most people ask is how much it’s going to cost. The good news is that the price of battery storage is starting to come down as competition increases and new models come onto the market. Costs are going to vary across installers and manufacturers and you need to look at just more than simply the price but issues such as capacity, cycling and reliability as well.

The Tesla Powerwall 2 at 14 kWh, for example, has a recommended retail price of £5,400 and you can expect to pay around £500 for additional hardware. It’s one of the top of the range batteries currently available. Installation costs can vary depending on your system and the location you want the battery placed in. That can mean you’re paying anything from £800 to £2,000 on top of the cost of the battery.

There are other batteries on the market today but you really need to look at a lot more than just the price – aspects such as the kWh you can expect under the warranty as well as the length of that warranty. Different batteries also have different expected shelf lives.

Average Payback

There’s little in the way of strong comparative data for each battery manufacturer and what they say on their sites is not always what you get in reality. How much you use your electricity during the day, for example, will impact on how much you save. An average family that is out during the day and uses most of their energy in the evenings will have different amounts of electricity available compared to someone who uses their home as an office.

Solar Plants details a family who used only 15% of their solar produced power during the day and were able to save in the region of £391 in the first year by installing a storage system. Their Powerwall 1 was installed for a cost of £6,000. Some research suggests that the payback time for a full solar panel and battery system can take as long as 16 years. There are, however, a lot cheaper options – the Powervault has an installation cost of about £3,400. You need also to look at some of the other technological specs.

Cycles, for example, are important: This is the number of charges and discharges you can expect to get out of a battery. For the Powervault, this is expected to be a minimum of 3,000 under the warranty time while the Powerwall stipulates unlimited under warranty. The Powerwall also promises a lot more kWh output under warranty. All this can be very confusing if you’re trying to choose the right battery for your family needs.

Is It Worth the Investment?

Research done in Australia has found payback periods of between 8 and 12 years with ROIs varying between 8 and 13% depending on the system used and the location installed (Australia being a much larger country than the UK, of course). The common consensus seems to be that we are not quite at the point where you are going to quickly break even with a battery system but you should, if you choose wisely, be looking to repay your investment within the warranty time of the make and model.

Undoubtedly, it’s vital that you get the best advice available when considering a battery system and explore all aspects of any potential installation not just the price and warranty. Take a look at our simple guide to all things battery on our main site if you want to find out more.