Energy Storage - the hottest of topics

January 4, 2021

By far the most common question we are asked at the moment is – ‘should we consider energy storage/batteries as part of our project/add it to our existing system?

Unfortunately, the answer to this question is slightly more complicated than you might imagine.

It depends almost exclusively on your motivation for installing a battery. Broadly speaking, the answer to the question depends on how important the following are to you:

1.

Installing energy storage to maximise self-consumption of the solar power in order to enhance your green credentials 

If you rank this above all then the answer is, yes, energy storage makes great sense if you wish to maximise self-consumption to enhance your green credentials. Solar power that would have otherwise been exported to the grid can be safely stored in a battery for use whenever the solar array is off – at night for example – or not producing enough to meet your demands.

2.

Installing energy storage to maximise self-consumption of the solar power in order to enhance the return on investment of your solar PV array

If, however, you rank this the highest then things become a little more uncertain. 

Owing to the fact you can still sell your surplus solar power to ‘the grid’ – rates vary from c. 3.5p – 5p per kW/h – storing your excess solar energy in a battery will only save you the difference between the export rate and what you would have otherwise spent to import the power. 

So, for example, if you were paying 13p during the day and 10p at night, your real saving with a battery would be 8p and 5p respectively – assuming you secure a 5p export rate. With this in mind, because the cost of batteries is still high, saving 8p or 5p per kW/h makes the business case difficult to justify. 

Although it is possible to strengthen the business case by making the battery available for the grid to use to balance their network – putting power into the asset when they have too much and taking power when they do not have enough – the contract terms are very short in length and the value of the contract is typically only known at the point the asset is ready to operate.

3.

Installing energy storage to mitigate the impact of power cuts on your business

For this, subject to the number and duration of power cuts, an energy storage asset could well prove useful and profitable. Certain systems can act as a UPS or be set up to deliver power to your most critical systems for a duration of your choosing. Of course, every site is unique so understanding the precise benefit requires detailed analysis.

Summary

In summary, if you want a battery to enhance your green credentials but need it to pay for itself in a reasonable timeframe – c. 10 years – it’s unlikely that you will get it to stack up.

If, however, your site suffers from frequent and prolonged power cuts, and you would like to enhance your green credentials then yes, a battery might make good sense.
 
This blog is designed to give a snapshot of things as they are today. There is no doubt whatsoever that at some point over the coming years, either the cost of energy storage will fall or the cost of electricity will increase to a point where the business case becomes very strong. Accordingly we advise all of our clients to ensure they install the hardware and software required to accurately measure the rate of solar energy generation, the rate of self-consumption and the rate of export. This data will allow us to model the benefits of a battery when the time comes. And it will come.