Solar Panels With or Without Battery Storage?

Solar panels are the main ‘go-to’ when it comes to creating a more energy efficient home. It’s thought that over 1.4 million UK homes have installed solar PVs to generate their own electricity.

Battery storage adoption rates are lagging way behind solar, with only around 10,000 installations according to the latest figures. Does this mean batteries aren’t worth it?

The main reason for the disparity in installations between solar panels and battery storage is two-fold:

• Cost
• Awareness

The cost price for battery storage is tumbling down, just like solar has in recent years. The next barrier to overcome is awareness. This is where we can help out. 

Despite the low number of current residential batteries, their popularity is increasing, with the market expected to double by 2030. And we’re likely to see a lot more storage batteries paired up with solar panels. This is because it makes a lot more sense to have both together. 

Sometimes however, it’s not always possible to install both renewable systems together for one reason or another. This article will explore the main pros and cons for solar panels with and without battery storage, so you can see the facts for yourself.

Overview of solar and battery storage

To understand whether solar panels should be paired with battery storage, it’s crucial to have a grasp of what each system does and how they work together. Most people are familiar with solar panels, so let’s start there. 

Solar panels, or solar PV,  convert sunlight into electricity, which can power your home and appliances. The main issue here is that they only generate electricity during daylight hours. Sometimes this can be too much energy for your current requirements, sometimes it’s too little. 

In a typical residential setup, solar panels generate DC electricity, which is converted to AC electricity through an inverter to power household appliances. 

When a Battery storage system is present, excess solar energy that’s not needed immediately is sent here, where it’s converted back to DC and stored. Then, when solar panels aren’t generating enough power, the battery system kicks in to provide stored energy to the home. You can learn more on what are battery storage systems here.

Without battery storage, excess energy is funnelled to the grid instead. Your home will then have to rely on the grid when solar production is low – and pay for the energy that you could have used for free! 

Solar panels without battery storage

Solar panels without a battery energy storage system (BESS) are the most common set-up for residential installations. That’s not to say this is the best way to do things, mind.

When battery storage hasn’t been installed, solar panels are connected directly to the grid without the ability to store excess energy for later use. During the day, when solar panels generate more electricity than the household needs, the extra energy is sent to the grid. 

On the other hand, when solar production is low, such as in the early morning or in the evening, your house will have to draw power from the grid. This set-up, known as a grid-tied system, essentially uses the grid for what would be your battery, but without the benefits of having your own storage system (which we’ll get into below). 

Pros

• Lower upfront costs – Solar panel systems without battery storage are less expensive to buy and install. This lower initial investment makes a renewable system more accessible to homeowners on a tighter budget, which is the main reason why most solar arrays have been installed without a battery.

• Generate your own electricity during the day – With or without a battery, your solar panels will generate energy when the sun is out. Whether or not you can always use this energy, especially during the week when the majority of homeowners are out at work, is another question. If not, you’ll just be topping up the national grid. 
• Battery systems can be added later – If a homeowner decides to install solar panels without battery storage initially, they can still add it in at a later date. This flexibility allows homeowners to spread out the cost of their solar investment and upgrade to battery storage when the time is right.
• Get paid for exported energy – If you’re on a smart export tariff, energy companies have to pay you per unit of electricity exported to the grid under the Smart Energy Guarantee (SEG) scheme. The amount you get paid for exporting energy tends to be a lot less than the price you buy it for. 

Cons:

• Still grid dependent – Without battery storage, households with solar panels remain reliant on the grid for electricity during periods of low solar energy production. This means you’re still prone to energy price rises.
• No back-up power – In the event of a power cut, solar panels without battery storage will not be able to provide backup power to the household. This lack of energy resilience can be a major drawback, especially in the not-so robust rural areas.
• Decrease in energy efficiency – When solar panels generate excess electricity that’s not used by your home or stored in a battery, it’s sent to the grid. The energy isn’t ‘wasted’, but you won’t personally benefit from the energy you’ve generated. It decreases your efficiency and leaves you out of pocket (unless you have an export agreement mentioned above).

Solar panels with battery storage

Solar panels paired with battery storage offer a more comprehensive and energy efficient system for homeowners. With BESS, excess energy generated by solar PVs is stored for later use, rather than being sent to the grid. 

Lithium-ion is the most common battery type for residential energy storage due to its high energy density, long lifespan and declining costs. In terms of size, typical residential battery storage systems range from around 5 to 12 kWh in capacity, but you can get larger and smaller systems.

With battery storage, homeowners can create an off-grid or hybrid system that maximises energy independence and efficiency. There are loads of benefits to solar battery storage, some of which we touch on below.

Pros:

• Increased energy independence – By storing excess solar energy in batteries, homeowners can reduce their reliance on the grid and fossil fuel-generated electricity. This increased energy independence allows for greener and more environmentally friendly energy consumption, with more power coming directly from your renewable solar panel system.
• Energy cost savings – Battery storage enables homeowners to use more of the energy their solar panels generate, rather than having it flow into the grid system. Why wouldn’t you want to keep the energy you generated? This more efficient use of both the solar panels and battery leads to greater energy savings and a reduced bill.
• Get paid (more) for exported energy – Under the Smart Energy Guarantee (SEG) scheme, you get paid for any exported energy. When you have solar panels and a battery with Octopus for example, you get access to much higher export prices – some as high as 35p per kWh.  
• Back-up power – In the event of a grid power cut, a solar panel system with battery storage can continue to provide electricity to the household for a number of hours, depending on the battery size.
• Increase house value – Homes with solar panels and battery storage systems are becoming increasingly attractive to potential buyers. They will not only benefit from the green technology, but all initial costs are taken off the table for them.

Cons:

• Higher upfront costs – Adding battery storage to a solar panel system significantly increases the upfront costs of the project. Lithium-ion batteries, while declining in price, are still a substantial investment. Prices can range anywhere from £2,500 to £10,000 and more, largely depending on the size and model of the battery.
• Space requirements – Although relatively compact, residential battery storage systems still require dedicated space for installation. The size of the battery system will vary but you will need a nice open space to fit in the battery, control panel, potentially an inverter and wires. Utility rooms, loft spaces and garages are all good locations.

Costs and savings with solar and storage batteries

The latest stats indicate that solar panels have dropped in price by an astonishing 82% since 2010. Whilst not cheap, they’re much more affordable than they were. The average cost of buying and installing a solar panel array suitable for a three-bedroom house is around £7,000.

With the cost of electricity eye-wateringly high, it’s thought that a solar panel system will save you approximately £500 over the course of a year. In terms of payback time, it’ll still take around 13 years to break even, but given the 25 year lifespan of solar panels, you’ll be quids in by the end.

Battery storage systems are another significant investment for most. The average price for a residential battery storage system ranges from £4,000 to £8,000. However, the long-term energy savings and payback periods make the investment more than worthwhile for many homeowners over the long run. 

As well as storing your excess solar generated energy, you can charge your battery during off-peak hours at a much reduced rate than you would pay for electricity normally – three to four times less in fact, which can translate to a substantial annual saving. The payback period for a battery storage system is estimated to be much shorter than solar panels at around 6 years. Read more on our savings with battery storage here. 

In terms of incentives and grants, the UK government has recently reduced the VAT on solar panels from 5% to 0%, making them even more affordable for homeowners. Additionally, VAT on battery storage systems has now been removed, further reducing their upfront cost. Aside from that, there are no wide-ranging grants to be accessed, unlike you have with the £7,500 grant available for heat pumps. 

If you’ve not got the funds ready to go, it’s possible to access green loans, mortgages and additional borrowing to help make energy efficient and eco home improvements. 

It’s clear that installing solar panels with battery storage is the most effective way to increase your efficiency and cost savings over the long term. The main barrier to installing both at the same time is affordability. This comes down to personal circumstances, but the investment will pay off in the future.