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Here’s how to work out which option could save or earn you more
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Once your solar panels are generating more electricity than your home needs, you have a choice. If you have a home battery, you can store that spare electricity and use it later. Or you can export it to the grid and get paid for the energy you send back.
There is no single answer that will be right for every home. Whether storing or exporting makes more financial sense depends on what your electricity supplier pays you for exported power, what you would otherwise pay to buy electricity later, and when your household tends to use energy.
But there is a relatively simple calculation that can help you decide.
The starting point is to compare your export rate with your electricity import rate. Phil Steele, future technologies evangelist at Octopus Energy, explains it using a simple example.
“If you store the electricity you generate in your battery, then you can use that again later on for free instead of buying grid energy,” he says.
Using the rates available when we spoke, Steele explains: “You forgo the 15p that you could have got from exporting it, but you’re not then having to buy it back again at 27p.”
In that example, storing one kilowatt-hour rather than exporting it effectively leaves the household 12p better off if that stored electricity is then used to avoid buying one kilowatt-hour from the grid later.
The exact numbers will depend on your tariff, and both import and export rates can change. But the principle remains the same: compare what your spare solar electricity is worth if you sell it now versus what it could save you if you use it later.
Keeping spare solar energy in a battery likely makes more sense if you regularly use electricity in your home after your solar panels stop generating electricity.
A household might produce plenty of electricity around lunchtime, for example, but use much more during the evening when people are cooking, watching television, running appliances or charging devices.
Without a battery, that midday surplus would be exported and the household could then find itself buying electricity back from the grid a few hours later.
A battery allows you to shift that generation from the time it is produced to the time you actually need it. Steele says this is one of the main reasons he prefers to see batteries paired with solar panels.
“The moment you’ve got solar, you’re obviously generating your own energy and you are storing any excess energy,” he says. “I much prefer it when batteries are paired with solar for that reason because you’re storing your own energy to then use later on.”
The financial argument becomes stronger when there is a large difference between the rate you receive for exports and the amount you pay to import electricity.
Storing electricity isn’t automatically the best option. If your battery is already full, for instance, any additional solar generation will normally need to be used immediately or exported anyway.
Exporting can also make sense if you are unlikely to use the stored electricity before your panels begin generating again, or if your export tariff pays a particularly attractive rate.
Imagine, for example, that your home uses relatively little electricity during the evening and overnight. Filling a battery that remains largely unused may offer little advantage over exporting that electricity and getting paid for it.
Some tariffs can also make exports more valuable at particular times of day, so the calculation isn’t always just about maximising the amount of solar electricity you consume yourself.
Modern batteries increasingly allow households to do more than simply choose between storing solar electricity or immediately exporting it.
A battery can potentially store solar when it makes sense, charge from the grid when electricity is cheap and discharge or export electricity when prices are higher. That can make the economics considerably more sophisticated.
Steele has seen this with his own solar and battery system. “My May and June bills, we made more money on export than we paid for import,” he says. “So I ended up in a net credit.”
The picture changes during winter, when solar generation falls. Steele says he then uses smart tariffs to charge his battery from the grid at cheaper times and use that stored electricity later.
Services such as Octopus Charge Pack can also automate some of these decisions, charging compatible batteries when electricity is cheaper and using or exporting that energy at other times.
As smart tariffs and battery software become more sophisticated, homeowners may therefore have to make fewer of these decisions manually.
Not necessarily. Battery capacity needs to be considered alongside both the amount of electricity your panels generate and how much electricity your home actually uses.
Historically, Steele says batteries were often sized largely according to the amount of solar installed on the roof. But time-of-use tariffs are changing that.
“With time-of-use tariffs, it’s becoming more sizing it to your home use rather than the size of your solar panel system,” he says.
That means there is little benefit in simply installing the biggest possible battery and filling it whenever the sun shines. What’s more important is whether you can make useful or financially worthwhile use of the electricity you’ve stored inside it.
A battery that is large enough to carry your household through the evening may be more useful than one with significant unused capacity.
There is also a small penalty for storing electricity. Batteries aren’t perfectly efficient, so some energy is lost while electricity is being charged into and discharged from them.
That means the comparison between storing and exporting isn’t quite as simple as subtracting your export rate from your import rate.
If the difference between the two prices is large, those losses are unlikely to change the overall conclusion. But if your import and export rates are relatively close, they can make the financial advantage of storage much smaller.
For many households with a battery, storing surplus solar energy makes sense when the electricity can be used later to avoid buying more expensive power from the grid.
But exporting can be the better option when your battery is full, when you are unlikely to need the electricity later or when your export tariff makes selling it particularly valuable.
Rather than thinking of one option as always better than the other, look at what each spare kilowatt-hour is worth. If storing it saves you considerably more on a future electricity purchase than you would earn by exporting it now, keeping it in the battery is likely to make sense.
If the export payment is more valuable, there is little reason to hold on to electricity simply for the sake of maximising your own solar consumption.
And increasingly, with smart tariffs and automated battery controls, your home energy system may be able to make that decision for you.
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