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Tuesday 21st May 2024

Should you get home storage batteries?

Nick Daws discusses the changing landscape of home storage batteries, now more affordable with rising electricity costs


Only a few years ago home storage batteries were very costly and hard for most people to justify. 

Times have changed, however, with the price of batteries falling while the cost of electricity has risen dramatically. 

So today I’m looking at the case for purchasing a battery energy storage system (or BESS as it’s sometimes called). This will apply principally if you have solar PV panels (or plan to get them) but may still be relevant even if you don’t. 

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If you want more information on solar panels, I’ve already written a piece about the pros and cons of those here.

Below I’ll look at the pros and cons of home storage batteries and set out some other considerations to bear in mind. I will also reveal why I recently took the decision to get one myself (and what I chose).

Pros and Cons

Pros

Energy independence – In association with solar PV panels, batteries enable homeowners to generate and store their own energy, reducing their dependence on traditional grid-supplied electricity. This provides increased energy independence and potentially lower bills.

Back-up power supply – During power-cuts, home storage batteries can act as a back-up electricity supply. This may be especially valuable in emergencies or during periods of high demand on the grid.

Maximising solar power usage – Solar PV systems often generate more electricity than needed during sunny days. With storage batteries, this excess energy can be stored for later use, e.g. in the evening or overnight.

Environmental benefits – By storing solar energy and reducing reliance on the grid, homeowners contribute to a decrease in carbon emissions and potentially help combat climate change.

Reduced grid demand – Home storage batteries allow their owners to draw electricity from stored energy during peak hours, reducing the demand on the grid and potentially lowering their overall electricity bills (further discussed below).

Cons

Initial cost – The up-front cost of purchasing and installing home storage batteries can be substantial – almost certainly a few thousand pounds. While costs have fallen in recent years, this remains a significant barrier for some.

Limited energy storage capacity – The storage capacity of home storage batteries is limited, which may pose a challenge during periods of prolonged low sunlight. This could require homeowners to rely more heavily on the grid during such times.

Lifespan and maintenance – Home storage batteries have a finite lifespan, typically 10-15 years. This means they will likely have to be replaced at least once during the life of your panels. Otherwise home storage batteries are pretty low maintenance, but as with any technology problems can occur requiring repairs or replacements.

Space requirements – Modern lithium-ion batteries are fairly compact, but they do still need to go somewhere. They have to be positioned away from any direct heat sources, with reasonable ventilation around them. The garage or kitchen/utility room are popular choices. For homeowners with very limited space this could be a constraint, however.

Grid connection still necessary – Despite having storage batteries, a connection to the grid remains necessary for times when energy demand exceeds the stored capacity or during extended periods of low sunlight. You are unlikely to be able to live ‘off the grid’ entirely using solar PV battery storage.

Other considerations

Another factor to consider is that from February 2024 the VAT rate was reduced from 20% to 0% for all battery energy storage system installations. The reduction applies to both new and existing solar PV systems and also to stand-alone battery systems.

Effectively this change has cut the cost of buying a battery by 20%. The tax relief is due to end in March 2027 when VAT will be reimposed, though at a lower rate of 5%. Purely from a tax perspective, therefore, there will never be a better time to purchase a battery energy storage system than now!

Another thing to note is that while batteries are currently used mainly for storing energy generated by solar panels, there are other ways they can be deployed as well. For example, some energy companies currently offer electricity at lower prices at off-peak times. You could potentially charge your battery from the grid at cheap rates and then use electricity from the battery at peak times when you’re most likely to need it. 

In recent weeks it’s been suggested that energy companies may introduce ‘surge pricing’ to balance supply and demand. This would be controversial, but if it happens peak-rate electricity will cost more for everyone and off-peak less. Obviously, the potential savings for homeowners who can shift their electricity consumption times using batteries would be considerable.

In addition, you might be able to charge your battery from other ‘green’ sources such as a wind turbine (though this technology is not currently as accessible as it ought to be). I will discuss home wind turbines in more detail in a future article for Mouthy Money.

Finally, bear in mind that all batteries are not equal. Prices vary considerably, in line with battery type, storage capacity, and other features. For example, more expensive batteries may automatically switch to supplying power during outages, but with others you may need to have a manual EPS (emergency power supply) switch installed. This is a complex field, and it’s important to research the options carefully and take expert advice as required.

My own example

As anyone who read my recent article about solar panels will be aware, I have had a solar PV system in my home for a number of years. 

I’d been considering getting a battery storage system for a while, and the news that VAT was being cut to zero provided the extra incentive I needed to set the wheels in motion.

I had two main reasons for wanting a home storage battery. One was (of course) to save some money on my electricity bills. But in addition I liked the idea of gaining a degree of independence from the grid. 

With the planned transition to ‘greener’ electricity in place of fossil fuels, I expect that power cuts will become increasingly frequent in the next few years. So I wanted a system that will keep the lights (and power) in my house on, even if everywhere else in the neighbourhood is in darkness!

Anyway, I sought quotes from three home storage battery companies. The prices all came out broadly similar (like for like), so I chose a local company called The Energy Box who came to see me and impressed me the most.

I wanted a (hopefully) future-proof battery, so I paid a bit more for a 13.5 kW Givenergy ‘all-in-one’ battery rather than the smaller Growatt 6.5 kW model that was offered to me as a lower-cost alternative. The Givenergy is a premium lithium-ion battery with a 12-year guarantee and built-in EPS (see above).

The battery was installed in mid-March and so far everything has been working fine. I have an app I can use to monitor the battery condition and check the charge. In addition, I have remote monitoring from both the battery company and The Energy Box to ensure there are no issues. This service is provided free of charge.

Closing thoughts

If you’re considering getting a battery energy storage system, I hope this article will have given you food for thought. 

As mentioned earlier, the falling price of batteries (and lifting of VAT) combined with the rising price of electricity have undoubtedly made these devices a more attractive option in recent years. 

In addition, the growing likelihood of outages (in my opinion anyway) provides a strong additional incentive to secure a measure of independence from the grid. 

And finally, there are potential environmental benefits to installing a home storage battery, though that may or may not be a major consideration for you.

As always, if you have any comments about this article, please do leave them below.

Photo credits: Pexels

Nick Daws

Mouthy Blogger

Nick Daws is a semi-retired freelance writer and editor. He is the author of over 30 non-fiction books, including Start Your Own Home-Based Business and The Internet for Writers. He lives in Burntwood, Staffordshire, where he has been running his personal finance blog at Poundsandsense.com for over seven years.

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