Solar & Battery install - How much can I save
Will solar & batteries save me money?
Now that I know roughly what size of system I need, it would be good to know if it is going to reduce my energy bills. So I looked at ways to calculate potential savings.
What does my electricity cost just now?
My daily electricity consumption is around 8kwh, that's around 2,920Kwh per year or 243kwh per month. My electricity charges after the price cap lifts will be 49.64 for standing charge and 27.84 per kwh - which makes my annual bill £994 (365 x 49.64p + 2,920 x 27.84p) - and that's before I consider charging my EV at home 😱
What would a battery only solution do to my electricity bill
A battery only system should allow me to charge the battery off-peak and then use that energy during peak times. There are some limits though
- Whilst I have sized my battery to cover my full days load, the inverter wont allow it to cover the full peak. As such there will be times when the grid is used along side the battery to provide power
- Most off-peak tariffs (like Octopus Go) now require you to have an EV. I have an EV so should be able to get an off-peak rate 🤞
I've estimated that about 10% of the time I will need to draw from the grid alongside the battery. So in simple terms 2,628Kwh (90% of my electricity) could be provided by charging the battery using an off-peak rate and 292kwh (10% of my electricity) would then need to be taken from the grid at peak rate. Using an off-peak tariff like Octopus Go, the standing charge is 24.86p, off-peak kwh charge is 7.5p per kWh and peak kwh charge is 30.83p per kwh. So my estimated annual charge would be around £377 (365 x 24.86p plus 2,628 x 7.5p plus 292 x 30.83) or £31.50 per month
Batteries alone would save me over £600 !!!!
How much electricity will my solar panels generate
There are some really good web sites out there that will help you calculate how much electricity your solar panels will generate. The one I used is linked below and it will work out how much electricity you will generate each month of the year based upon your location, roof pitch, house orientation and size of solar installed. I've based my calculations on a 5.2kwp system as that's what I've decided to get.
To use it :
- Select your house location on the map
- Select the “grid connected” tab
- Put in the amount of solar capacity you will have
- Select "mounting position" as Roof Integrated
- Put in the roof slope - I have a 45° pitch
- Put in the Azimuth - this is the orientation of your roof relative to due south. East of south is a negative value and west is positive (ie due east is -90° and due west is +90°). I used +25 as my roof is slightly Southwest facing
- Click the “visualise results” button
So what does this all mean to my bills
Well in the simplest possible terms, if I have a solar and battery system, my solar panels should charge my battery and provide most of my demand for 8 months. For the other 4 months I'll be relying on my battery.
Given the battery only solution works out at £31.50 per month, that means 4 months at £31.50 totaling £126.
For the months when solar will provide 90% of my capacity for free, I will still have to pay a standing charge and 10% of my capacity will still need to come from the grid at peak rate - so that's 243 days at 24.86p (8 months standing charge) or roughly £60, and 24.3kwh (10% of my monthly consumption) at 30.83p for 8 months again roughly £60. So my annual electricity bill should be £246.
In addition I will (or should if I fill out the forms properly), get some money back for the excess I generate which goes to the grid through the Smart Export Guarantee (SEG) scheme. Its not a lot as the rates are about 4p per Kwh exported. At a really rough estimate, based upon monthly consumption and monthly generation I expect about 1,500kwh of export in the 8 months when the solar generation exceeds my needs - so I might get back around £60 from SEG. That means my bottom line is an annual electric bill of roughly £186 or £15.50 per month
Batteries and solar should save me over £800 !!!!
So whats the payback period
As my system is costing £9,450 installed, it would take around 12 years to recoup my investment based upon £800 saving per year.
However I'm not looking at my investment from a "pure return on investment" basis. I am trying to:
- protect myself from future price increases
- invest in my property rather than putting money into the profits of the big 6
On this last point, it's hard to quantify but a good install of solar and battery will give your house a better Energy Performance Rating and reduce the running costs. As such it will add value to your house. Even if that is only a couple of thousand pounds, it makes the payback period even better.
Next Step: How the system should work
One final note
If this blog has helped and you go on to installing a solar or battery solution, please let me know by leaving a comment and sharing this page as I really like to know I've been able to help.
If you're considering a move to Octopus to charge your batteries in the darker months, please consider using my referral link below (click on the Octopus) as it will give each of us £50 off our Octopus bill.
Hi interesting read. I already have 14 panels. I'm already on EDF Go so I get the 4 5p night rate and I have a Gen2 Smart Meter. What I'm looking for is a battery system. To enable me to keep my unused power to use in the evenings. I currently export to Eon at 16p kw but my day rate is 38p kw so I'd like to export as little as possible. I dont know which way to turn at the moment.
ReplyDeleteTo work out your battery size, you need to know your average daily consumption (which you should be able to work out from previous blog pages) as batteries should be sized based upon your daily consumption minus a bit. The bit is 2 parts
Delete1. how much your solar will generate on its worst days (you haven’t said if you have solar or not, but if you did it’s typically 10% of the solar capacity times fewest hours in the day - so a 3kwp system would be 300w x 6 hours or 1.8kwh)
2. How much you consume during off-peak hours as batteries also aren't used them as they're typically charging
There are some decent kits out there that can be installed by a good spark. I’m not able to recommend it or the supplier as I’ve not used them (although I do have both Pylontech batteries and Solis inverter), more just showing what is out there.
£3.4k for 7kwh kit - https://www.itstechnologies.shop/products/copy-of-pylontech-us3000c-3-5kwh-95-d-o-d-battery-storage-898-vat
£2.9k for 5.2kwh kit - https://www.itstechnologies.shop/collections/solar-battery-storage-buy-online/products/2-x-fox-hv2600-2-6kwh-5kw-ac-high-voltage-complete-kit-6kwh-charge-dicharge
Do keep in mind that if you add batteries this way, you’ll still need to notify the DNO that you can export and depending on the size of the inverter, this can be a relatively simple G98 notification after install (inverter up to 3.6kw) or for larger inverters a more complex G99 approval which must be completed before any work commences
Excellent write up, encouraging me to actually do some basic investigation into costs/ROI
ReplyDeleteThanks
Glad it helped.
DeleteSurely you need to factor in the cost of giving up any interest on the £9450 capital. If that were invested in say a 5yr fix at around 4%, you are losing £350-400 interest pa, so doubling the payback period. Clearly no one can know future electricity price or interest rates.
ReplyDeleteIt's an interesting point however if you put the money in the bank you still have to pay for your electricity so any interest you make will be offset by having to pay for your electricity
DeleteBaseline - Imagine a household with an average consumption of 10kwh per day and £8k in the bank. Each year the £8k will earn say £400 in interest (based on 5% return) and their electricity will cost just over £1k (based upon 27p/kWh) - that's a net loss of £600. So after around 13 years the £8k savings would be effectively gone and there would still be an annual bill of £1k. After 20 years they'd be down -£7k and getting worse by £1k every year
Solar & battery - The market price for 5kwp of solar is around £4k, and a 10kwh battery is around £4k fully installed (I know it varies depending on complexity etc - but this is the market price). So a 4kwp array & 10kwh battery should cost around £8k
If sized correctly, the system would cover a proportion of the household consumption - let's say 50%. So the peak rate part of the annual bill will be say £500, with 1800kwh (5kwh/day) being off-peak via battery. So thats 45p/day (based on off-peak tariff at 9p/kWh) or £160 per year. So the total annual electricity bill would be £660.
We also know that 1kwp of solar will generate roughly 0.8-1Mwh per annum. Using the low end figure of 0.8Mwh, if this was all exported at 15p/kWh it would make £120. So a 5kwp system would return £600 per year if everything was exported. This would give you a net annual electricity bill of around £60.
Think about that for a minute - that's £60 for the entire year!!
After 9 years, you've recouped the £8k outlay. Years 10-20 you would be saving £1k per year by not having to pay your electricity bill, so you'd have £11k in the bank. After 20 years that's a net position of being almost £18k better off than the baseline position - and that's before you add interest on those savings.
And all the above doesn't take into account beneficial tariffs like Octopus Cosy where you can get 3 off-peak charges per day 🤯 - which would make this even better - especially if your consumption is driven by a heat pump
https://www.facebook.com/share/p/18Ru2CBx28/
Now I know this is "man maths" and based on known knowns like export tariffs, and it doesn't factor in replacement kit over time, but neither does it factor in price rises in electricity costs or reducing costs of solar & battery. It also assumes only a 50% offset of peak rate consumption. If you increase this offset, say to 60% then £400 peak, £200 off-peak - net annual bill £0. Or 70% £300 peak £250 off-peak - net annual bill of £50 credit. 80% £200 peak, off peak £250 or roughly £150 credit on your annual electricity bill.
Bottom line - if you want to reduce your household running costs it makes more sense to have solar & battery rather than money in the bank, and it only gets better the more you use it.