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Will battery storage affect my feed-in tariff payments?

Posted by Sandra Hayes on 16 August 2016 at 3:45 pm

Q. Will battery storage affect my FiT payments?

A. A recent question from a YouGen reader about the impact of battery storage on Feed-in Tariff (FiT) payments for solar PV got me thinking. My initial reaction was that FiT payments wouldn’t be affected by storage as FiT payments are made for every unit generated –right?

It turns out that the answer isn’t as simple as that.  As I found out when I started digging into this, it all depends on the way in which the battery storage system is linked into your solar PV system. Bearing in mind that batteries can only store DC electricity your system could either be:

  • DC coupled –meaning that the batteries are installed on the same side of your inverter as your solar panels; DC electricity is stored and only converted to AC electricity when it is used, or
     
  • AC coupled – the batteries are stored on the grid side – the electricity has been converted by your inverter to AC electricity and measured by your generation meter before being stored in the battery. A second inverter is required to convert this back to DC electricity again (and back again to AC when you need it).

As you can appreciate the advantage of the DC coupled system is greater efficiency (as energy is lost on each conversion from DC to AC).  However, it has the disadvantage of reducing payments through the FiT.  Remembering that part of the FiT payment is based on what is recorded by the generation meter, this could happen for two reasons:

  • If DC electricity is drawn directly off the battery for use before it reaches the generation meter
     
  • Because batteries lose energy in the charge-discharge cycle and this lost energy is not measured by the meter.

The second part of the FiT is the export tariff.  Currently this is not likely to be affected if you store the electricity you generate in a battery.  This is because the amount you export is usually deemed for domestic systems at 50% of what you generate.  Once smart meters are introduced (and every GB home should have one by 2020) this is likely to change so that payments will be made only for what is exported.  Storage will reduce your payments but this is likely to be offset by the savings that are made by being able to use electricity your panels have generated rather than paying for imported electricity.

I found a really helpful guide from BRE and RECC on this subject called Batteries and Solar Power: Guidance for domestic and commercial consumers. I recommend reading this guide (see section 4.4) if you want to know more on this subject.  The diagrams in it will make everything I’ve said above much clear. It states that you’re more likely to be offered an AC coupled system if you’re looking to add a battery storage system to an existing solar PV system and a DC coupled system if you’re installing a new one.

So how are the commercially available domestic solar PV storage systems currently configured?  Telsa say that their Powerwall is a DC-coupled battery which requires a compatible inverter.  Retrofit seems possible but pricey because a new inverter is likely to be needed as well as the battery pack. The Powervault is an AC-coupled system, so installing one won’t affect your existing FiT payments.  In theory at least it should be a cheaper option for retrofit as is no need to change the existing inverter. In simple terms the AC option would appear to lend itself to retrofit whereas DC option is likely to better suit a new build project.

If you have any direct experience of battery storage why not post your comment here? I’m sure there’s a lot more that can be said on this subject!

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Comments

9 comments - read them below or add one

MikeSan

MikeSanComment left on: 29 June 2017 at 10:50 pm

I'm building a mobile laser cutter for cutting plexi, but the battery storage is still the issue. Lasers needs a lot of power, for now I managed to minimize the size to a medium backpack - but it still needs a lot of improvements.

Looking forward for the graphene to be more available.

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wallxl

wallxlComment left on: 24 February 2017 at 12:52 pm

Thanks for explanations. I wasn't sure whether battery storage  would affect my payments.

I've heard that smart meters will be rolled out as standard across the country by the end of 2020. No idea how it's going to affect the generators.

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Sandra Hayes

Sandra Hayes from Comment left on: 19 October 2016 at 11:22 am

Which? have quite a good article on whether you can refuse a smart meter.  It seems you may have to have a smart meter, but you don't have to agree it being in it's 'smart mode'.

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Rudge Energy

Rudge EnergyComment left on: 18 September 2016 at 9:50 am

We have found over the years we've been installing Off Grid systems that Lead Acid Battery based storage can lose around 20% of the generated power during the whole charge/discharge and conversion process. With Lithium based storage that figure will be a lot less, usually 5%.

Therefore, I would always go for an AC coupled system on a grid connected storage system, as the storage (and charge/discharge) is carried out before your FiT generation meter and you'll lose a proportion of FiT payments every year, if you are on the high rate of FiT that can translate to around £200 for a 4kWp PV system.

We have had reports from our customers that telesales peope are claiming the losses are negligible on a DC coupled system such as Tesla or Growatt, obviously you'd never be able to prove otherwise once its been installed, so be warned that is not quite the case!

Regarding Smart Meters, these are being fitted by some providers such as British Gas now. There is a facility that you can refuse to have one installed, though I am sure the allocated £250 cost will still be incrementally taken from your bill as if you did get one! The convenience of having accurate readings will be a boon though.

Chris Rudge (Rudge Energy)

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acc-generation-pl4-0qt

ACC Generation Comment left on: 8 September 2016 at 12:04 pm

The battery storage will not effect your feed in tariff at all in fact the battery would allow you to benefit further, we could help you by arranging a short appointment to explain the pros of the battery. The expert with explain all the worries you may have and to answer any questions that you are unsure of. 

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richmc

richmcComment left on: 31 August 2016 at 6:49 pm

Miro I remember reading a while ago that you can refuse to have a smart meter (as I have). My consumer unit and meter are in a very confined space and it whould be impossible to fit one in place of the existing meter.

British Gas is pushing the smart meters by giving "free" electricity at weekends, but the unit rate the rest (peak) of the time the cost is higher.I'm sure the "we are doing you a favoir" advertising will sooner or later turn into penalties for using power during peak times.

I think the right to refuse a smart meter was part of the govenment mandate outlining the roll out, but how long will it be before it becomes a condition when you switch suppliers or we find the tarrif rate increseing because of the "additional administration costs".

My system is a 4KWh PV system that also feeds a 12KWh battery pack that can supply 6KWh of off solar power, my battery system is a Wattstor and is firmly on the AC side.

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muymalestado

muymalestadoComment left on: 20 August 2016 at 9:33 pm

@ Miro; Exactly! But the fear is that like it or no smart meters WILL be installed, as near as possible, everywhere.

Not only that, but I do not 'buy electricity according to price'. I use appliances as needed at times which are convenient. From experience I can say that the biggest ally in using power hungry appliances at the most advantageous times is to become retired. The eight hour working day ceases to dictate the domestic schedule. The shining sun is more a driver for household chores than wondering about price changes by the hour or minute.

Oh, and thanks for this post about FITs and batteries. Very illuminating.

The whole thing gets complexer and complexer.

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IsabellaM

IsabellaMComment left on: 18 August 2016 at 8:22 am

Thanks for explanations. I wasn't sure whether battery storage  would affect my Fototapety payments.

I've heard that smart meters will be rolled out as standard across the country by the end of 2020. No idea how it's going to affect the generators.

 

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Miro

MiroComment left on: 16 August 2016 at 5:16 pm

Do you know if it will be mandatory to have a smart meter by 2020?  I have a concern that smart meters will give the generators the ablity to not only vary (hourly or even minute by minute!) the price they charge for the elecricity they provide but  also to vary the feed in tarif rate. 

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