Domestic energy storage - in the form of batteries - is driving a resurgence in solar power installations in our homes. It offers a boost to fuel bill savings and to the payback on the investment. Since the UK Government reduced the feed-in-tariff for solar photovoltaics, households now earn less from simply generating and exporting electricity back to the grid. By storing excess solar energy for use later in the day when it’s needed, homes can now use more of the electricity they generate themselves, which saves money off their fuel bills.
Until recently, battery storage wasn’t an area of interest for landlords as the beneficiary of the battery is the energy bill payer (the tenant) rather than the owner of the solar installation (the landlord), so there would be a split between the party investing in the battery and the party receiving the ‘payback’. This could change. Commercial battery-owners can now earn a revenue from their asset that’s independent from any solar photovoltaics where it might be located. How? They can offer its services to the National Grid to help regulate the supply of electricity and manage the frequency of the electrical grid. This same opportunity could be offered to domestic storage in the not-too-distant future.
When connected together using smart technologies, domestic batteries can provide valuable ‘balancing services’ to the grid. Owners of batteries can now enter into a contract with a third party ‘aggregator’ that links together a host of batteries (and sometimes other equipment too, but I won’t explain about that here) in a variety of different settings and that could be spread around the country. The aggregator sells the services of this battery system to the National Grid, District Network Operator, or to an energy supply company. They receive payment that’s then split with individual battery owners. Within this agreement, the batteries are hooked-up with smart kit that allows them to store and release energy back to the grid according to the needs of the system as a whole.
What should organisations and homes looking to invest in aggregated battery storage solutions be thinking about as they decide which option to go to for? It’s a rapidly evolving area so I think the first consideration is whether you could inadvertently get ‘tied’ into a package that prevents you from changing how you use your asset as the market matures. Where you’re having hardware and software installed that’s compatible with only one aggregator, you are limiting the flexibility of your investment and your ability to upgrade and redeploy it as your own needs and as wider circumstances change.
We talk a lot about the benefits of a more flexible grid, but when we use the world ‘flexibility’ we’re often talking about the flexibility of electricity supply and demand rather than the flexibility of homes and organisations to decide how to participate in the system. For our grid to work best in the interests of society - and for it to continue to develop and improve - then homes and organisations must be free to adapt and change.
David Kemp is sustainability manager at Procure Plus.
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