Solar plus storage: shining a light on the opportunity for installers

We’ve all read the statistics about the increased uptake of domestic solar panels over the past 12 to 18 months, with several providers reporting record installation figures this year. And, while climate change has been on the agenda for a long time, it’s fair to assume rising energy bills and growing fears about grid capacity have given consumers a bit of a push.

Solar plus storage: shining a light on the opportunity for installers

There’s also the backdrop of a rapidly approaching net zero deadline which is resulting in more policy announcements, more research, and more investment – all serving to cement the inescapable direction of travel.

But solar panels are just one part of the story. The energy storage battery is edging further into the spotlight as more people get switched on to the power it wields; power to supercharge the efficiency of solar PV, to supercharge our climate change efforts and to help balance a struggling grid.

More providers of domestic energy storage solutions are entering the market, bringing a wider range of newer, better products to choose from. Costs are falling and awareness is rising of the humble battery as being at the heart of a truly efficient, low carbon home.

Which all serves to open up a whole new avenue of opportunity for installers.

Why a solar and storage combination is key to domestic decarbonisation

The nature of renewable energy such as solar means that, on its own, you have to use it at the time the energy is being generated or lose it. For that reason, it’s thought that two thirds of renewable energy is going to waste. By pairing a solar PV installation with a storage battery, that green energy can be saved up and used later, such as in the evenings or on rainy days. Any surplus energy, once a battery is fully charged, can be exported back to the grid.

Nationally, the government has committed to increase our solar capacity five-fold by 2035 to 70GW, but it also recognises that this needs to be accompanied by the necessary battery storage capability. Not just to stop waste, but because shortages in grid capacity are currently hindering the creation of solar farms.

We have, as a result, seen the relaxation of planning rules, making it easier for large batteries to be constructed for the storage of energy from solar and wind farms. According to a report by the Climate Change Committee, grid storage output capacity will ‘more than double’ by next winter, putting energy storage on track to meet the goal of 8 to 9GW by 2028.

It’s the same concept for the domestic property, where combining solar plus storage can not only lower bills and further reduce a home’s carbon footprint, but also reduce grid reliance – something which might be an increasingly appealing benefit amid warnings about planned power cuts.

Thanks to the integration of AI, additional energy required by the grid can be imported during off-peak times when electricity is cheaper, with the green ‘free’ energy being used to power the home during peak price periods.

While installation costs and achievable energy savings are always going to vary depending on the size of the home and capabilities of the solar panels and batteries chosen, it’s estimated that the efficiency of solar PV can be boosted by an additional 30% when paired with energy storage.

The current market picture

The domestic energy storage market is growing, with the battery becoming the integral element of a low carbon home system, which could also include heat pumps, electric vehicles, and smart management.

This is supported by an increasing number of players, developing increasingly sophisticated products. GivEnergy, for example, has, this year, been busy launching a new generation of hybrid inverters and a combined battery and inverter product with a back-up capacity of 13.5 kWh.

The leading energy storage firm has also gone into partnership with Octopus Energy to offer a new smart tariff, specifically designed to unlock the benefits of solar power combined with battery storage, which the companies claim can deliver savings of £450 per year for customers. It enables homeowners to automatically receive the best rates for both the power they use and the power they sell back to the grid, with no need for manual programming.

Changing the energy management game

Earlier this year, GivEnergy CEO, Jason Howlett, told Renewable Energy Installer: “Fortunately, though awareness is still somewhat behind where it should be, we are seeing an uptick in home storage batteries. For instance, we at GivEnergy commission upwards of 1000 systems per week in the UK alone. 

“Battery storage technology across the board is evolving at pace. Year after year, we’re seeing new models and improved efficiency. The latest generation of home batteries includes features such as smart energy management systems, API access for custom automation, remote monitoring and control, and modular design for easy installation and scalability. 

“In a short space of time, home storage batteries have changed the energy management game. The control and visibility that the billpayer now has over their energy usage are at an all-time high. So, it’s fair to say that we are now seeing a revolution in the ease with which homeowners can manage their energy consumption and reduce their reliance on grid electricity.”

Another exciting initiative that has developed this year is the new Zero Bills energy tariff launched by Octopus in partnership with housebuilder, Verto.

It guarantees zero bills for five years for new homes kitted out with the right combination of solar panels, battery, and heat pump. Following the success of a pilot with almost 600 homes, it aims to deliver 10,000 homes by 2025 by bringing more developers on board.

These products and initiatives demonstrate the pace of battery evolution and the industry-wide commitment to solar plus storage solutions.

Solar and storage installation

Notwithstanding the many variables involved, the costs associated with solar panels are falling, thanks in part to subsidies and more market choice. A BEIS report published in 2021 said the cost of solar panels in the UK had dropped as much as 60 per cent since 2010.

Solar Energy UK’s The Value of Solar Heat report found that a typical home installing solar PV with a heat pump could save £1,217, while a gas heated home could save £1,428. In a best-case scenario, annual savings of more than £3,688 are possible in a gas-heated home and £4,283 in a heat pump heated home.

 Adding a solar battery at the same time is becoming an increasingly attractive prospect. Not only can it bump up the energy savings achieved, it also reduces a home’s carbon footprint even further by enabling more green energy to be utilised.

On a practical level, installation costs will be less by installing both at the same time. It also allows a more compatible solution to be provided from the outset, while fully future proofing a home for the addition of more renewable systems, such as a heat pump or electric vehicle charging point.

With solar panels generating DC electricity and can either be AC coupled, using an inverter, or DC coupled with a direct connection. If installing the battery at the same time, opting for a DC battery means it can be connected directly to the panels, reducing energy losses, but creating an ‘off-grid’ system.

Where the panels already exist and have a grid connection, it’s easier to fit an AC battery afterwards, but this will require an additional inverter. Retrofitting can also mean the solar energy is converted twice, therefore resulting in additional loss over time.

Solar battery VAT consultation outcome awaited

There’s also the VAT element to consider. The 0% VAT relief only applies to batteries when they are fitted as part of a system with a qualifying material, such as a solar system. An energy storage battery on its own doesn’t qualify, as it stands, so a battery added at a later date is currently subject to VAT.

However, the government has consulted on this point following challenges from Solar Energy UK, as well as energy suppliers, business leaders, consumer advocates and parliamentary committees. The outcome of that call for evidence is currently awaited.

Solar Energy UK says it has ‘every expectation’ that this anomaly will be corrected in the forthcoming Autumn Statement.

The association’s senior communications advisor, Gareth Simkins, said: “By providing solar power when the sun goes down, battery systems markedly increase the utility of solar energy systems, whether that’s small units in homes or vast systems accompanying solar farms.

“So, we are pleased that our lobbying over the VAT issue has paid off, with the Treasury expected to dump the tax at the Autumn Statement. It makes no sense for the taxation of energy storage to depend on when it is installed, so we are very much looking forward to battery energy storage being added to the list of Energy Saving Materials (ESMs) and zero-rated for VAT.

“Solar Energy UK has previously called for the government to collaborate on designing a long-term retrofit support scheme for homeowners and occupiers, to increase the uptake of energy storage. We have also called for the Building Regulations to incentivise onsite solar generation and energy storage, which we hope to see in the forthcoming Future Homes Standard.”

The scale of opportunity for installers

It’s becoming increasingly apparent that generating renewable energy isn’t enough. That energy must be captured and stored if we are to take full advantage of renewable technologies and achieve net zero goals.

Around 1.2 million homes have a solar system and just over 10,000 use home battery storage. With 14 million homes to target, opportunities for installers could be huge, as the various barriers to renewables continue to be overcome, both on a national and individual consumer level.

The new Solar Taskforce is looking at several of the challenges and all eyes will be on the much-anticipated outcome of its work early next year.

While battery storage can also be used without a renewable energy system, it’s the solar market where much of the growth seems to be happening.

Going down this route should now be easier for electrical contractors following the announcement from Octopus Energy that solar PV installers no longer need to be MCS Certified in order to access its Smart Export Guarantee.

And with government aiming to create 60,000 solar industry jobs by 2035 as it seeks to achieve its 70GW capacity goal, it’s clear to see the potential is there.

Taking this a step further to offer battery storage solutions at the same time could represent a lucrative way for installers to stay ahead of the competition and make more money.

Solar Energy UK’s, Gareth Simkins, added: “Given the benefits, it’s unsurprising that battery energy storage has become a very normal element of residential PV installations – and more of those are expected this year than ever before, due to the energy price crisis. But do enough people know about either? I think we can only say that when every home has the technology installed. Hopefully, the government-industry Solar Taskforce will come up with some answers on raising consumer awareness.”