The more expensive the grid electricity a battery can avoid, and the lower the value of the solar it would otherwise export, the more useful storage may become. But the answer depends on the actual tariff, how much surplus solar is available and when the property uses energy.
Not every kilowatt-hour has the same value
A unit of solar used to avoid an expensive grid purchase can be worth more than the same unit exported for a lower payment. This is why I do not assess a battery using annual consumption alone.
Time-of-use tariffs can change the result
Some tariffs charge different rates at different times. If grid electricity is more expensive later in the day, stored solar may be able to replace higher-cost purchases. If later electricity is cheap, the saving from each discharged unit may be smaller.
Export value matters too
Charging a battery from solar means some energy is no longer exported. That export has a value, even if the payment is low. A fair battery comparison should account for the export income given up as well as the grid purchase avoided.
A simple way to value stored solar
A useful first check is the difference between the grid rate you avoid and the export credit you give up.
Simple example
If grid electricity costs 30 cents per kWh and exported solar earns 5 cents per kWh, the gross value gap is 25 cents for each kWh shifted from export to later use. The real value will be a little lower because batteries have energy losses, and a full financial model should also consider battery cost, degradation and any fees.
This simple comparison helps explain why a battery can become more attractive when feed-in tariffs are low and later grid electricity is expensive.
Flat tariffs can still support a battery
A property does not need a time-of-use tariff for storage to have value. If there is useful solar surplus and significant grid use after solar production falls, a battery may still reduce purchases. The economics simply need to be modelled against the actual rate.
Season can change the result
Solar surplus can be much lower in winter and much higher in summer. A short period of monitoring can therefore give a misleading picture of how often a battery will fill.
Where possible, I prefer to look at several bills, interval data or a longer period of export information. This helps avoid sizing a battery around one unusually sunny or cloudy period.
Tariffs can change over time
Retail plans and rates can change. That is one reason I prefer not to present a battery return as a guaranteed number. A proposal should show the tariff assumptions used in the model.
What I check
- Current usage rates
- Peak, shoulder or off-peak periods where relevant
- Solar feed-in or export value
- Supply and demand charges where relevant
- How much solar is available to store
- How much electricity is bought after solar hours
- Seasonal changes in solar exports
- Battery losses, usable capacity and project cost
The tariff is only one part of the decision, but it can materially change the answer. That is why I ask for a recent electricity bill before making a battery recommendation.
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