Budgeting: Is a home battery worth it? Costs, savings and payback
Is a home battery worth it? It can be if you have solar panels or a tariff with cheap night rates, since you store cheap electricity and use it later, and in a worked example a battery costing 4,000 saves about 400 a year.
By Wealtie Team · 3 min read
Key takeaways
- A home battery can be worth it with solar panels or a cheap night tariff.
- In a worked example, a 4,000 battery saves about 400 a year and pays back in about ten years.
- Without solar or a time-of-use tariff, savings are much smaller.
- Check the warranty, since batteries lose capacity over time.
Is a home battery worth it?
It depends on how you get your electricity. A home battery stores electricity to use later. If you have solar panels, it stores what they generate during the day so you can use it in the evening, instead of sending it back to the grid for a low price. If you're on a tariff with cheap night rates, it can charge overnight and power your home during expensive daytime hours. In either case, it lets you use more cheap electricity and less expensive electricity. Without solar or a time-of-use tariff, there's much less to save.
The upfront cost is high, so the payback time matters. In a worked example, a battery costing 4,000 saves about 400 a year, which means about ten years to pay for itself.
Some people also value a battery as backup during power cuts, though not every system can power the home when the grid is down. If that matters to you, check before buying, since backup often needs extra equipment.
It helps to look at your electricity use over a typical day before talking to installers. If most of your use is in the evening, when solar panels aren't generating and peak rates may apply, a battery has more to do. If you're home during the day and already use most of your solar power as it's generated, the battery has less spare power to store. Your energy supplier's app or smart meter data can show these patterns, and installers can use them to give you a more accurate estimate of savings.
How much can a home battery save?
Here's a worked example for a home with solar panels and a time-of-use tariff, in round numbers that work in any currency:
| Saving | A year |
|---|---|
| Storing solar power for evenings | 250 |
| Charging on cheap night rates | 150 |
| Total | 400 |
Your own savings depend on how much solar you generate, your tariff, how much electricity you use and when you use it. A household that's out all day and uses most of its power in the evening gets more benefit from storing solar power than one that's home during the day.
What affects whether a battery is worth it?
Solar panels
A battery makes solar panels more useful by storing power you'd otherwise export. If you don't have solar, the battery can only save through cheap tariffs. Are solar panels worth it? covers the panels themselves.
Your tariff
Time-of-use tariffs with cheap night or off-peak rates let a battery charge cheaply and save during peak times. The bigger the gap between cheap and expensive rates, the more you save.
Battery size and price
A battery too big for your needs costs more without extra savings. Ask installers to size it based on your actual use.
Battery life
Batteries lose capacity over time. Check the warranty, which often promises a certain level of performance for a set number of years. If the battery wears out before it pays back, it won't have saved money.
What else should you consider?
Installation adds to the cost, and some systems need an inverter replacing or upgrading. Grants or tax breaks may be available in some places, so check what applies. If you're also considering a heat pump or electric car, a battery can work alongside them, which can change the sums. Space for the battery, usually in a garage or utility room, is needed too.
How do you decide?
Ask at least three installers for quotes, including the battery size, expected savings based on your usage, the warranty and the payback time. Compare the payback with the warranty length. If the battery would pay for itself well within the warranty, it's more likely to be worth it. If payback takes longer than the warranty, think carefully. How to save money on your electric bill covers cheaper ways to cut your bills first.
Save rather than borrow
Batteries are a big purchase. Paying with finance adds interest, which lengthens the payback. Saving up first keeps the sums simpler. How to save for a big purchase covers how, and the home maintenance budget covers planning for big home costs. Work out the cost per use if you're comparing options.
How do you track energy savings in Wealtie?
Add energy bills as recurring transactions, so they log themselves on their date. Keep them in their own expense category, and compare bills before and after installing a battery to see the real saving.
Questions people ask
It can be with solar panels or a cheap night tariff. In a worked example, a 4,000 battery saves about 400 a year and pays back in about ten years.
Only if you're on a tariff with cheap night rates, and the savings are usually smaller.
Many years, but they lose capacity over time. Check the warranty and compare it with the payback time.
Ask installers for savings based on your usage, then compare the payback time with the warranty length.
This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.
