Can a battery storage system save you money on your electricity bills?

Solis Installer

As a homeowner, you’ve likely been stung by rising electricity costs in recent years. With UK prices showing no signs of stabilising, many people are seeking ways to reduce their bills and gain more control over their energy use. 

Battery storage systems offer a potential solution. They can help you save money by taking advantage of smart tariffs and storing electricity for use during peak hours.

Now, you may think that you can use battery storage only as part of a solar installation, but that’s not strictly true. Battery storage systems can be installed in most homes, allowing more people to take advantage of the potential long-term savings they offer. In this article, we’ll explore how battery storage systems work and how they can lead to significant savings on your electricity bills.

What is a battery storage system?

A battery storage system is a device that allows you to store electrical energy for later use. It typically consists of a battery pack, an inverter and a control system. The battery pack stores direct current (DC) electrical energy. When you need to use it, the inverter converts it into alternating current (AC) electricity, which is then distributed throughout your home via the control panel to power your appliances.

But there’s a clever part that many homeowners aren’t aware of. The battery pack can be charged in two ways: either by storing excess energy generated by solar panels or by drawing power directly from the grid. The latter allows you to charge the battery during off-peak hours when electricity is cheaper and use the stored energy during peak hours when electricity rates are higher.

Understanding smart tariffs

Smart tariffs are electricity plans that offer different rates depending on the time of day or the demand on the grid. There are two main types.

Time-of-use tariffs have set rates for different times of the day, typically with higher rates during peak hours and lower rates during off-peak hours. However, some smart tariffs have just two rates: a lower off-peak rate and a higher peak rate. The off-peak rate usually applies during the night and at weekends, while the peak rate applies during the day when demand is higher.

So, charging your battery storage system during off-peak hours when electricity rates are lower allows you to store the energy you purchased at a reduced cost. Then, when peak hours arrive and electricity rates increase, you can use the energy stored in your battery to power your home, rather than buying electricity at the peak rate. Over the long term, this can result in significant cost savings.

So, how much can you save?

The amount you can save will vary depending on several factors, including your battery storage system’s capacity and efficiency, your overall energy consumption and your chosen smart tariff’s rates. However, to give you an idea of the potential savings you can achieve, here’s a working example. It’s based on a 10-kilowatt hour (kWh) battery system with a 95% discharge depth and 15% conversion efficiency, and a tariff that charges 28p per kWh during peak times and 8p per kWh off-peak.

With this system and tariff, it would cost £2.80 to charge the battery to capacity during peak times, but only 80p off-peak – a £2 saving. After factoring in the discharge and conversion limits, the total saving would be £1.62-a-day, or £589-a-year. A 20kWh capacity battery on the same tariff could result in an annual saving of £1,179, based on a daily saving of £3.23. Not bad, right?

While you’d still have to cover the up-front cost of installing the system, it could be paid off within just eight years, without taking inflation and rising energy prices into account, or even sooner if used alongside solar panels, which leads us neatly onto…

Enhancing your savings with solar panels

You can maximise the savings by installing solar panels alongside your battery storage system. Solar panels provide numerous benefits, including reduced energy bills, lower carbon footprint and potential income through the Smart Export Guarantee (SEG) scheme.

When your solar panels generate more electricity than your home needs, you can store the excess in your battery and use it during peak hours when electricity rates are higher, or at night when your solar panels aren’t generating energy. This can further reduce your reliance on the grid and increase your potential savings.

Things to consider

Battery storage systems can lead to long-term savings, but they do require an initial investment. The cost will depend on factors such as the battery’s size and efficiency, how complex the installation is and any additional components you may require.

When choosing a battery storage system, consider the capacity you’ll need based on your energy consumption and the battery’s lifespan. LFP batteries typically last for between 10 and 15 years. It also pays to shop around smart tariffs from different energy providers to find one that offers the best rates and the most potential for savings.

And while battery storage systems require minimal maintenance, following the manufacturer’s guidelines to ensure optimal performance and safety is essential. Check the battery and inverter regularly and ensure proper ventilation and protection from extreme temperatures.

How can Electrical Innovations help?

With unpredictable electricity costs in the UK, a battery storage system could save you money and give you more control over your energy use. While there’s an initial investment involved, the long-term savings and benefits can be substantial.

At Electrical Innovations, we can supply a home battery storage system to help you reduce your bills and reliance on grid electricity at peak times. We specialise in installing battery storage systems, along with solar panels and inverters, to give you a complete solution. Our friendly, expert team is here to guide you through the options, help you understand the benefits and potential savings, and recommend the best system for you and your home.

To learn how we can help you save money on your electricity bills with a new battery storage system, give us a call today.