Adding a battery to your solar system is a great way to maximise your use of the solar energy you produce, but is it worth the cost? This help sheet provides an overview of how batteries work, how they don’t, and whether they are likely to prove a good investment for your not-for-profit on its transition to zero carbon.
Batteries are a great idea but right now they are too expensive to be worthwhile for many not-for-profits. For most organisations, there are better ways to reduce your carbon footprint.
How do batteries work?
Batteries have been around for a while, but in some ways they’re the super cool new technology on the block. When used with a solar system they can create a sustainable energy network for your building that produces and stores enough energy to run your building, charge your electric vehicles and potentially even return energy to the grid.
Battery storage works by storing the electricity you generate when the sun is shining on your solar panels during the day, so you can use it at night when the sun has gone down. Without batteries, any excess energy your solar panels produce during the day is sent back to the grid. In return, you are paid a feed-in tariff (FiT) per kilowatt hour (kWh) that is far lower than the amount you pay to buy energy from the grid.
How will a battery storage system save money?
There are several ways a battery can save you money. Batteries help reduce electricity costs by:
- ensuring you get maximum benefit from your solar panel system
- helping you use energy when it’s cheaper (off-peak tariffs)
- helping you manage your capacity load (only if you pay capacity charges).
Many retailers charge more for electricity at peak times. By storing surplus energy during the day for use at night, batteries can help you avoid using energy from the grid at peak times. With a battery you can coast through the expensive times using battery-stored solar energy that you harvested during the day. If your battery runs out, you’ll be using grid energy at cheaper off-peak times.
The right battery storage system may also save you money if the grid goes down. You should be able to keep essential appliances (fridges, basic energy) going so you won’t have to deal with food wastage or shut your doors if there’s a power outage.
How much will a battery storage system cost?
If the cost savings sound too good to be true, that’s because there’s an important factor to consider: batteries are expensive. Although batteries are becoming more viable every year (especially with the rising cost of energy and the instability of the grid) they are still very expensive.
At the moment, a typical battery storage system would take the average household 10–15 years to pay off, once you take into the account the money you are likely to save on electricity, versus the money you are likely to spend on batteries. For organisations the cost and payback period are likely to be higher and longer.
For many organisations and households, batteries just don’t make economic sense right now. But watch this space. As they get better, more efficient and cheaper and as electricity prices continue to rise, the return on investment will become much more appealing in the near future.
Is a battery storage system right for your organisation?
There are many reasons not-for-profits are keen to invest in battery storage systems but whether or not they are right for your organisation depends on many factors:
- Can you afford it?
- Do you rely on electricity and need backup in case the grid goes down?
- How do you use energy? Will you benefit from lower tariffs if you have battery storage?
- How important is it for your organisation to be an early adopter of green technology?
- Does it make sense for your business?
Unlike solar panels, battery storage systems aren’t such a clear cut “good” investment for most not-for-profits on their journey to achieving net zero. In fact, for the vast majority, battery storage solutions represent high cost and relatively low impact.
Choosing the right battery storage system for you
If you are keen to invest in batteries, you need to work out what sort of system you need.
Basically this comes down to these questions:
- How much energy do you want to store? (What size battery or how many batteries you need?)
- How much space do you have to house them?
- How much (if any) excess solar energy do you currently produce? Will your current solar panel system be enough? Does your excess output make the cost of installing batteries worthwhile?
Batteries are simple to understand in theory but quickly become complicated when you get into the nitty gritty. As with solar panels, your best bet is to find a reputable and accredited supplier and lean on them to answer your questions and explain the system they are suggesting.
Understanding battery size and capacity
Battery capacity is usually measured in kilowatt hours (kWh) or how much power can a battery can hold. The separate kW (kilowatt) rating tells you how fast that power can flow from a battery.
For example, a 5 kWh battery is capable of storing 5 kWh of power, and it can discharge power at a maximum rate of 5 kW. So if your organisation has an appliance that requires 7 kW to run (e.g. a ducted air-conditioner), a 5 kW battery won’t have enough power to run it.
The other thing to be aware of, especially when comparing batteries, is the depth of discharge (DoD). A battery can never discharge 100% of the energy in it, so DoD is a percentage that refers to the actual maximum amount of energy that can be drawn from a battery. For example, a 5 kWh battery with a DoD of 80% can discharge only 4 kWh in total. In other words, a 5 kWh battery has 4 kWh of usable energy you can draw on.
How to choose a battery storage retailer
The same checklist for choosing a solar panel supplier applies to battery storage installers and retailers. (See the help sheet “Solar panels”.)
The Clean Energy Council of Australia ((www.cleanenergycouncil.org.au) is a fantastic place to start when looking for battery installation quotes and accredited suppliers.
Can I charge my electric car fleet from my solar battery system?
Sort of, but not really. Technically it is possible, but it’s also inefficient and slow. The best way to use the solar energy you produce is in running appliances – air-conditioners, electric hot water heaters, computers and so on.
Electric vehicles have their own charging systems. It doesn’t mean you can’t use the solar energy you produce to provide the energy needed to charge your car, but it isn’t as simple as plugging straight into your battery.
See the help sheet “Electric cars” for more information, and ask your provider to explain the best set-up for your organisation.
Joining a virtual power plant (VPP)
A virtual power plant (VPP) is a network of individual solar battery systems connected (online) so that they can operate as one large power source. A VPP is also connected to the grid, and is able to support the grid network by helping to balance supply and demand.
Normally when your battery is fully charged, any excess energy is fed back into the grid. You get paid for this with a feed-in tariff (typically 5.2 cents per kWh in Victoria, for example, but the tariff varies from state to state and from retailer to retailer). By joining a VPP you get an additional payment on top of this tariff. How much you receive depends on your provider and how many times they access your system. Most providers also offer discounted energy rates to participants.
When a VPP is activated, battery power from connected systems flows back into the grid – think of a super sunny day when lots of air-conditioning systems are in use. Sometimes the energy required from the grid is too great and we get blackouts. A VPP can support the grid in times of high demand by providing extra electricity. The VPP operator will only use the power you’ve agreed to share and won’t use it very often, and they will never drain your battery.
Being part of a VPP means you are helping to build a greener, more reliable grid network that supports renewable energy. Note that the type of battery you have will limit the VPP you can join.
The Australian Renewable Energy Agency (Arena) has a good overview of VPPs; go to https://arena.gov.au/blog/what-are-virtual-power-plants-and-why-do-they-matter/.