How to make a business case for battery storage and onsite renewable energy deployment Q&A

View the transcript of the Q&A section of our webinar "How to make a business case for battery storage and onsite renewable energy deployment"

  • We work in a large 1960’s office block in Manchester – should we consider battery storage or solar PV do you think?

    Given the expected construction of this building, I would urge you to consider energy efficiency measures before deploying renewables or expensive storage solutions. As an engineer, I certainly favour a fabric first approach to energy management, and by reducing your consumption, you will both save money immediately, but potentially also get even more benefit from renewable generation that you may later install as it may be a better match for your on site needs.

  • Can you show a graph of battery price changes over time like you did with solar panels? What do you expect to happen to the price of batteries going forward?

    The most relevant battery type to compare in this way would be Lithium-ion batteries and I have found the following graph, attributed to a Bloomberg study in 2018. *(Graph can be seen at the bottom of this page). Going forward, we expect this reduction to continue, due to the increasing pressure on price and volume through the growing demand for electric vehicles as grid balancing, as well as the massive amounts of research being invested in battery technologies around the world.

  • How does the expected life of a battery stack up against the expected life of PV and the payback period?

    Excellent question. Lithium-ion batteries are typically quoted with a life of 2 to 3 years, or 300 to 500 charging cycles. However, this is usually with reference to electric vehicles, in which the power rating and depth of each cycle is much more strenuous than for a stationary storage requirement. It is widely assumed that EV batteries will generate a second life after use by being sold for storage at properties where the charging and discharging rate is much less steep. A payback of less than 10 years should not then necessarily be a concern for a PV and battery storage business case.

  • What does the £750/kWp include for?

    This rate quoted for the larger commercial arrays includes for supply and installation of the panels, and conventional connection. It would not include costs for structural reinforcing of a roof, planning permission, or any grid reinforcement costs that might be required by the DNO.

  • What are your assumptions for the long term energy tariffs when calculating the commercials? Are you concerned about Ofgem's SCR changing the tariffs?

    Our inflation estimate for electricity is based on 5% per annum, which is typically less than we have seen over the last 10 years. This figure is adjustable in arbn renew and can be used to generate a sensitivity analysis for a project, testing a what-if scenario in the event that tariff inflation was lower or even negative.

  • What is your take on carbon emissions stemming from the operation of battery storage?

    Battery storage is not a renewable energy solution, and intrinsically does not reduce the carbon intensity of a site at all. Where it can be used to store surplus energy generated from renewable sources, and then used to reduce consumption when power would otherwise be drawn from fossil fuel powered sources, then this does provide carbon savings but must be carefully managed. I am also in favour of electric vehicle batteries being given a secondary life as storage solutions in stationary applications when they have reached the end of useful life in the vehicle. However it should be remembered that battery manufacturers and suppliers in the EU are required to fully recycle all materials used in the production of batteries and that a very high percentage of EV batteries are expected to be recycled. This significantly reduces their impact and makes them overall a positive contribution to carbon reduction.

  • What are the lifespan of the batteries in general?

    Lithium-ion batteries are typically quoted with a life of 2 to 3 years, or 300 to 500 charging cycles. However, this is usually with reference to electric vehicles, in which the power rating and depth of each cycle is much more strenuous than for a stationary storage requirement. It is widely assumed that EV batteries will generate a second life after use by being sold for storage at properties where the charging and discharging rate is much less steep. A payback of less than 10 years should not then necessarily be a concern for a PV and battery storage business case.

  • Is there a solar PV and/or battery business case for schools?

    Yes, there is, however it must be specific to each case, and depends on the exact detail of the site demand profile, both daily and annually, the tariff structure that applies, and the roof location, size and geometry. All of these can be easily modelled in arbn renew and a good first stage assessment provided as a desktop study.

  • Does the electricity used for EV charging points, in work places, fall under normal bills or are they billed separately? If seperate, is climate change levy (CCL) applied to these bills? What is the expected lifespan of the current range of batteries?

    Lithium-ion batteries are typically quoted with a life of 2 to 3 years, or 300 to 500 charging cycles. However, this is usually with reference to electric vehicles, in which the power rating and depth of each cycle is much more strenuous than for a stationary storage requirement. It is widely assumed that EV batteries will generate a second life after use by being sold for storage at properties where the charging and discharging rate is much less steep. A payback of less than 10 years should not then necessarily be a concern for a PV and battery storage business case.

  • We're looking into introducing battery storage on our residential projects as we are already getting solar panels on them. Would you recommend this, or would you think it would be more ideal to have them on mixed-use developments/commercial developments?

    As we discussed during the webinar, I think there is now a strong case to be made for batteries where households installed solar PV as early adopters and the solar panels have effectively now paid for themselves. Domestically, there is less likely to be the day time consumption of energy that would make solar PV on its own a good investment, and the combined cost is still high to justify as a single project. However, if a development is being installed with solar PV to meet carbon targets for building regs, then a battery would certainly reduce costs for the eventual household, and make the solar PV much more efficient at reducing carbon for the home.

  • Is there a source of information for the latest installed cost per kWp and kWh for PV and battery installations?

    The Government publishes statistics on the costs of PV installations, however this is only quarterly and is currently a year out of date - https://www.gov.uk/government/statistics/solar-pv-cost-data Reports can also be found from the Energy Saving Trust, Which?, and the Solar Trade Association, but again these can be irregular. We maintain arbn renew up to date by staying in contact with a large number of solar product suppliers and installers and we update our pricing database regularly to take into account the current market conditions for a given scale of installation.

  • Large school model showed EPC cost of £750 per kWp. including battery. Earlier slide showed £1000 per kWp installed just for PV from June 2019. Did I understand the numbers correctly?

    The earlier slide showing a current cost at £1,000 per kW(p) or a little less was representing the current average domestic scale cost. The cost estimate at £750 per kW(p) for the large school was for a much larger array at 178kW(p) on a single elevation large roof, which can not only benefit from the economy of scale, but also much reduced cost of installation per panel due to the layout of fixing points and supporting rails.

  • Ireland specific deployments? Also interested in PV technologies - fabric based

    Our system arbn renew will be effective in Ireland as well as the mainland UK and the same economic justifications for deplopying solar PV apply.

  • Given PV is rateable, how do you see this impacting on the business case for installation?

    We understand that business rates are affected by solar PV, and very much more so for large installations where the power is consumed on site. This can be mitigated by setting up an SPV to purchase and install the array, and then a Power Purchase Agreement to sell the resulting power to the occupier at an agreed rate. We have not taken this issue into account in the economic feasibility case through arbn renew as it is strongly affected by the specific conditions at each site, however if in doubt, we would advise that you seek specific legal advice on this matter.

  • How is the lifespan of batteries cost and recycling costed in the process to make the case?

    The battery lifespan has been addressed in an earlier question, however this has not specifically been taken into account in the feasibility report through arbn renew. Battery suppliers in the UK are required to accept returns at end of life for recycling, so the cost of this will already have been factored into the original supply cost.

*Graph attributed to a Bloomberg study in 2018