Battery storage has become a common proposal in domestic retrofit schemes. However, adding batteries to a project requires careful assessment. They are not universally beneficial and can represent poor value if installed without clear purpose. This guide helps retrofit teams and installers determine when battery storage genuinely makes sense within a retrofit intervention.
Battery storage operates on a simple principle: store low-cost electricity when generation or grid supply is plentiful, and use it when prices are high or demand peaks. In retrofit scenarios, this typically involves:
The financial case depends entirely on matching generation capacity with storage size and household consumption patterns. Oversizing either component wastes capital.
Solar PV retrofit with significant evening demand: If a property receives solar retrofit and occupants use considerable electricity in evening hours (heating systems, hot water, lighting), batteries become viable. Storage allows the household to use their own generation rather than importing grid electricity at higher rates.
Time-of-use electricity tariffs: Where occupants have access to economy 7 or newer time-varying tariffs, batteries can arbitrage the difference between cheap off-peak and expensive peak periods. This model works particularly well in properties where consumption patterns are predictable.
High self-consumption requirements: Social housing, sheltered accommodation and properties with consistent daytime occupancy (elderly residents, work-from-home occupants) show strong payback cases. The ability to use on-site generation immediately is valuable.
Larger multi-unit retrofit schemes: On apartment blocks or housing schemes with shared generation infrastructure, communal battery storage can serve multiple units. The economies of scale improve financial returns compared to individual installations.
Without adequate generation capacity: A 5 kWh battery installed on a property without solar PV, or paired with undersized PV, cannot achieve meaningful charge cycles. The battery will sit idle or charge from grid supply, which typically offers no economic advantage.
Low evening occupancy profiles: Properties where residents are absent during peak evening hours cannot use stored energy effectively. This includes many retrofit schemes for workers in daytime employment.
Single-rate tariffs: Where households are on simple, non-time-varying electricity rates with no demand charges, the economic case for batteries becomes very weak. There is minimal arbitrage opportunity.
Short retrofit lifecycles: If a property is scheduled for major intervention (heating system replacement, fabric upgrade) within 5-7 years, the battery payback period may extend beyond these timescales. This suggests waiting until the full scheme is planned before battery inclusion.
Battery storage costs have fallen significantly, but remain substantial. Current installed costs (including inverter, balance of system and labour) typically range from £800–£1,200 per kWh. A modest 5 kWh system costs £4,000–£6,000 before grants.
Annual savings depend on:
In favourable conditions, annual savings reach £300–£500 per kWh installed. At current costs, this suggests 10–20 year payback periods for well-matched systems, extending to 20+ years in marginal cases.
Key point: Model actual savings before specifying batteries. Use local generation data, actual consumption profiles and confirmed tariff rates. Poor assumptions lead to installations that fail to deliver promised benefits and undermine confidence in retrofit schemes.
Before recommending battery storage, retrofit teams should establish:
Batteries perform best within comprehensive retrofit schemes that reduce overall demand. If a building's heating and hot water efficiency is improved, annual electricity consumption drops, which changes the storage business case. Always sequence assessment: first reduce demand through fabric and heating upgrades, then size any generation and storage to match the improved consumption profile.
Battery storage remains a valid retrofit tool, but only when the underlying conditions—sufficient generation, matching consumption patterns, viable tariffs—align properly. Installed without this clarity, batteries represent capital misallocation.
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