Further Thoughts on Solar and Battery ROI 

I’d 100% agree with your suggestion that its a relatively few people that can afford an investment like solar & battery and completely ignore the ROI. I’d also say that the ROI calculation is going to be a massive influence on how (and how quickly) we adopt green tech. The huge increases in energy prices in the last 18 months has been a big driver in the investment in roof top solar. Its a fact that everyone likes the status-quo, until it starts costing more money than the alternative 😂

Whenever I've been asked is having a battery "worth it", I always respond with "what is YOU'R definition of worth" .. for us we value the independence and not caring about the Government's incompetence in managing energy needs. We bought a cheaper house in order to be able to afford to install a solar and battery set up, so Whenever we mention the costs of the solar and battery I tell them not to see it as an seperate purchase but view it as the total amount we bought the house for. Plus not only are we Bill free but the utility company pays us month for extra solar feed in

Superb video again Gary! You have a lot of talent in what you do and might not realise it :)

Thanks for doing what you do Gary, so informative. I am at the beginning of my solar journey and am currently having quotes. I have learnt so much from your video's and they have contributed to my plan. Thank you 😊

Good explanation and video. Yes, I'd like the addition of the cumulative cost over time graph in Solarazma Pro. Thanks.

Hi Gary. Thanks for another insightful video. Seeing the ROI displayed as you did is a great way of visualising the effects of finacial changes over time. Very helpful when trying discuss solar with my partner.

Thank you Gary for another superb content about solar and battery. My favorite content creator in renewable energy.

Had my solar an batteries put in 3 years ago when the per kWh prices were 12p per kWh. I’m now on 39p per kWh With what I’m exporting and what I’m using it will be fully paid off in 15 months

Yes I agree. The ROI displyed as you show is, i think, the best way to look at a system over time. Thanks again, most helpfull.

Always look forward to a video from you Gary. Very informative. Can I make a suggestion, your intro and exit piece, would it be possible to lower the volume on it. I normally watch your videos at night on the TV and it blasts through 😂.

I congratulate you on your series of videos that presents information in a clear and simple way. ROI on batteries is a subject which can have several approaches depending on what you are trying to show. Your method of cost per kWh produced is useful to a degree but to use it to predict future cost of cycling the battery is slightly iffy. As soon as you cycle more, the cost per kWh changes, so it is dynamic. There is also the case of if I do zero cycles per day it has infinite cost per kWh, this is just extreme but it illustrates the point. The battery cost is more a fixed and variable cost equation. Even if I don’t use the battery, in your example I would spend an average of £1.10 per day to amortise the cost over 10 years. If I stay within my number of cycles in the warranty (6000 is common, more now are unlimited) I can cycle 1.5 time a day at no extra cost to me. So your example of costing 4.5p/kWh by charging and discharging is a bit misleading as without doing it it could cost 25 p/kWh (0.5 cycles/day) and by earning 75p (1.5 cycles/day) it would cost 9 p/kWh but the actual cost has not changed. The extra 1 cycle per day is at no real cost, just a theoretical cost but I have earned a real 75p. The point is that unless you do something that affects your warranty or reduces the life of the battery significantly the cost per kWh is purely academic once you have bought the battery.

Good work. More power to you 👍

Great thoughts. For us, we are knowingly not getting the 'maximum' solar return, so our calendar roi will probably be 12 years, but the security is quite helpful with peace of mind.

Yes spot on with the motivations behind ROI. And love the chart. This is a conversation I have with lots of people thinking about solar (and electric cars). I tell them ‘do the maths’ and you’ll see that it makes sense. I could say ‘do the maths and use a chart’. Some will be motivated purely by the financial savings but for others it can make ‘doing the right thing’ affordable too.

Yeah, there is a problem with trust. There is a lot of promises and new trends but do those really work? Thank you Gary for your unbiased explanatory work. It is worth supporting.

Hi Gary, sorry if it’s been mentioned before but another consideration is import electricity is eligible for VAT, whereas export doesn’t attract the same. So e.g. import at 7.5p per kWh is actually 7.875p with 5% VAT. Love the videos 👍🏻👍🏻👏🏻👏🏻

I use ROI in yet another way in that I know what I want to do (export all day, import at night to do my best for the environment) so use ROI as a way to choose the tariff that gives the best return when doing that. Same approach, just different reason - and input variables. Also, I see a number of comments about installations that never break even and wonder if this is a problem of scale. Panels themselves are cheap compared to the other components needed so just a couple of kWp might be a poor investment whereas (if you can) a bigger array costing very little could offer a good return.

On energy security - you typically have to pay extra for the installation if you want power cut fail over, and many installers are reluctant.

Good explanation! I think a battery system is useful for keeping the lights and internet Router on and heating on in the event of a Power Cut (Outage) atleast while we are sill burning Gas! obviously if you change to Heat Pump later You'll need a bigger Battery!

Your ROI graph was very insightful Gary, thanks for the video. I would like to see a similar scenario where the pv battery system meets 150% of your daily use. Here in Australia we get what is called a "feed in tariff" which is quite low, usually less than $0.08 per kw hr, but it adds up (we currently buy power @ $0.40 per kW hr). By my own calculations a system like this for myself would generate $1000 annually, and we don't have an ever increasing electricity bill, and we don't have to purchase fuel for our ev either, which totals approximately $7000. Admittedly a system that provides all of our needs, and some, is expected to cost about $30k, so not "cheap" by any standard. So by my estimate, $7k +$1k gives us a break even point of less than 4yrs. Let's also assume that our battery is substandard and only lasts 8yrs (& solar panels @ 25yrs), I would imagine that home batteries will be better and far cheaper as time goes on too, just like $1.5k VHS video players that you could eventually buy for less than $100. Just my thoughts from going through a similar cost analysis roi recently.

Completely correct there is a return an investment of everything, granted most are negative. But people should take this into consideration before buying anything

Thanks Gary. Your videos are the best on the web in offering concise explanations of solar in terms non-specialists can readily understand. I installed a 12 kw system on my house 5 years ago, with another 3 kw added two years ago in anticipation of my purchase of an EV. I wish that I had the guidance of your videos in planning my system, which would have helped me make somewhat better decisions. Nevertheless my experience with my solar installation has been overwhelmingly positive. Here in the US Desert Southwest a good ROI is easy to achieve as long as one works with a reliable contractor. The most frequent mistakes I see involve naive customers who get lured in to no money down 20 year leases with exorbitant buy out provisions should one wish to terminate the lease. I’m wondering if there is a similar “lease trap” problem in UK (or other countries).

Hi Gary, love your videos and this one is quite useful as well. Your point about the further investment in solar changing the slope of the cost is well made and I'm assuming that's the cost of adding battery storage rather than panels? One thing I feel I should point out is that if the original slope changes due to an increase in grid prices, it should also impact the solar investment slope, though to a lesser extent.

Thanks a lot for your knowledge Gary.... it is really well explained, and allow us to create r abetter world through renewable energies :)

Great visualisation. I would add though that when the purchase price changes part way through, it changes for both the original model and the new solar model so the angle of the green line should also deflect at that point although not by as much as the original line because not as much electricity is being purchased. The only time this would not happen would be if you were able to go fully 100% self sufficient and therefore not import any electricity which would put the green line completely horizontal

Thanks for the follow up. In terms of the aim to reduce carbon emissions, the calculation there is whether the purchase of solar is a better investment to reduce carbon emissions than using offsetting. One advantage of solar is that you can be sure of the effectiveness - it is on your own roof and your own usage. If you spend money to save or plant trees somewhere you don't know if those trees were really not going to be there without your support and you don't know if they will be secure in the long run against unauthorized logging or (the seemingly increasing number of) forest fires. I often wonder if the ROI calculations should include the offsetting savings too! Perhaps as an option?

Two items that are not included in your model are the income from exporting - only significant in summer - and the Feed-in-Tariff. For our solar - 3.6kW - we calculated that the ROI is 9 years. FiT runs for 20 years so the income phase is more significant. We are in a village without mains gas, so the cost of electricity for all our energy needs v electric plus LPG/Diesel, using solar/battery/ASHP/solar thermal makes ROI very difficult to calculate as a whole system. Our estimate for our set up is 9yr for solar, 10yr for battery, 5yr for solar thermal panel and 4.5yr for ASHP (includes RHI).

Thanks for the video, very interesting. I think what some people forget about R.O.I for solar and battery is that in a normal house without solar and battery, electricity is delivered to the house without the need for extra devices, unlike gas where you need at least a boiler to heat your home, so the solar and battery do need to pay for themselves over time to break even. One thing I haven’t seen discussed much is whether solar and a battery is financially sensible based on a persons usage. I’ve looked into a solar and battery installation which could possibly cost £20,000 but I currently only spend approximately £1000 a year on electricity. Even if I covered every kw of my usage with the solar and battery (probably unlikely), it would take 20 years for my R.O.I at which time the system maybe on its last legs, especially the battery, so I’ve decided to invest the £20,000 at 5% interest which will pay me about £1000 interest a year, so covering my electricity bill and I will still have the £20,000 after the 20 years. I realise this is quite simplistic and interest rates may decrease but hopefully solar and battery installations will also get cheaper and I will investigate then. Obviously this is just a financial perspective and doesn’t include the environmental aspect but thought I’d add it as an alternative view. Thanks again and keep up the good work 👍🏻

Hi, one of the things that doesn't really get discussed is how we evolve our installation over several years. That means buying different generations of PV, solar battery etc, possibly from different manufacturers and then trying to get things to work. I'm on an orignal FIT from 2016 (approx 12.6p per kwh), The PV array was connected to a Samsung ESS (DC battery/inverter) a year later in 2017, which is still operational. I'm now in the MyEnergi ecosystem with Eddi, Zappi and a new Libbi for battery storage. The Libbi is standalone and is charged offpeak, as my installer could see no way to get it to work alongside the Samsung ESS, which remains directly connected to the PV array. The MyEnergi app does offer some level of control and a dashboard for me to understand how much excess solar is available and then and divert this to charge the Libbi, Zappi, Eddi. But there is a a very real need for some level of standardisation/integration. These things are very expensive; PV arrays are supposed to last 25+ years; batteries over 10. Manufacturers need to make it far easier to swap out and replace things.

Hi Gary, very informative channel. Like your clear and concise delivery. Have taken the ‘plunge’ and signed up to Octopus, so £50 credit for you and £50 credit for me! Many thanks.

Adding a battery does completely change the cost per kWh of your solar generation, for the simple fact that you'll be using a lot more of your own generation and exporting less. So it's the same cost for the solar install but you use more of the output.

Thanks for your help. Long term investment Hopefully batteries will be cheaper in AUS on 8-10 years. My panels are between 8 and 3 years old. So they will see me out..maybe. Pat

The ROI was low priority for us, we work from home, having the house on a UPS. Saves me having to go into work in case of powercuts, where we live about 6 times a year it happens.

You also need to take into consideration interest rates. For example if you did not buy the solar installation then how much compound interest you would have earned on that money if it was still in your savings account. Even at 3% it makes a difference. However, you also need to calculate your savings in the same way ie. calculate compound interest on the savings as you make them.

Hi Gary I initially bought a 3.2Kw array with a 3.2Kw battery and quickly discovered I needed a second battery certainly in the summer months, not sure about the winter yet. At £2,500 per battery this was exspensive but hey interest rates are rubbish so why not, mind you £2,500 worth of electricity is a lot so wondering was it really worth it. Anyway at my age I will not see a return on my install but my son certainly will after my days. Got to start somewhere.

Going to be interesting as new battery technologies become available. A 10kW flow battery for domestic installations has been announced by a German company - it'll probably be ridiculously expensive, but affordable ones will appear eventually and they don't have the degradation issues of conventional battery technology.

I got a solar PV array and home battery _specifically_ _because_ it made my bills cheaper (in the long run)! No other reason. The fact that it's also "greener" is utterly immaterial to me. The UK contributes less than *1%* to the worlds carbon emissions, so me changing to solar etc won't make a blind bit of difference. I just wanted cheaper bills (in the long term), and independence from the vagaries of the electricity rates going up and down like they have done in the past year or so. With the change of feed-in tariff on Octopus Intelligent to 15p/kWh my *ROI* has just improved dramatically!

It's worth comparing to the Opportunity Cost of the battery investments ie. putting money in to the bank.

I think ROI is/should be an essential part of the decision for most people. Unfortunately costing the ROI on panels and/or batteries is really complicated and has many variables. You mentioned Inflation, but didn't mention either loss of investment income if self-funded, or cost of loan, if funded that way, Over a long period, this is a significant factor. Try as I might, for my use I can not make a financially rational decision to go solar, with or without battery. What might swing it will be emotion or power security and those won't appear in a spreadsheet. And just at the moment, I can't make the jump and invest (but probably will). As an after-thought, would investing in using less electricity have a better ROI at household level? For some, I'm sure it would, and others not...... There's another can of worms to add in.

Great video Gary. My DNO (national grid) has put a restriction on my export limit (6.6kW) in response to my G99 application. I'm fine with this, but they have also put a restriction on the total inverter sizes added together. They stated I cannot have a planned 5kW Solis string inverter and the GivEnergy AIO battery (6kW inverter output) together as my total inverter size has to be 9.3kW or less. I'm now in a dilemma having picked the AIO battery to get best ROI. I can have the GivEnergy AIO + smaller 3kW string inverter, or 5kW Hybrid inverter and DC coupled battery! Any help as never known restriction of inverter size when they have already put an export restriction?

As one gets older a ROI is less relevant but what is indisputable is if you have the cash, Solar / battery offers a secure return which is way better than any other secure return and it is tax free. The one fly in the ointment is you need dual tariff to get the best out of it

It might be worth putting the graph bit at the end into a short

That is the best graphical display of benefits I have ever seen. Excellent. Can I say for the nuclear promoters nuts as people leave grid useage the fixed and running costs of the grid remain but the amount of draw from the grid reduces and so the units of electricity used have to be more expensive. Connection daily charges will also increase. Nuclear generation is a decades to start up and then 6 to 10 decades of operation. Nuclear operators are much more expensive than the millions of people that can install PV panels. The big battery in EV is "free" with the vehicle. Nuclear operators will also be 3shifts 24/7/365/100 years, plus holiday shifts plus sick leave and training and ....... maintenance.... Plus demolition at plant end of life and disaster insurance costs and government guarantees on cash flows and bigger grid transmission construction and more power plants in the full electricity future. 😮😮😮😮😮😮😮😮😢 Actual cost of the pv system is cheaper than windows $/m2 in Australia. And the V2G big battery is "free" with vehicle purchase. Climate destabilisation will be deadly and expensive. Battery technologies are evolving rapidly. You are doing a great service 👏 👍 😊 ROI brilliant, climate change is a big big big money matter for the nuclear people and the little guy is being undermined to save their massive business model. Big business knows, Elon Musk knows, auto manufactures know. V2G is a 2 for the price of one and no humongously expensive extra transmission grid capacity construction.

Hello Gary, how do you create those beautiful graph animations?

I'd be interested to know Gary's views on the new 'mote efficient 'solar panel technology that's supposed to mean the end of grid power within a decade. It there any likelihood Gary

My current daily usage is £2.80 according to my smart meter , I calculated ROI would happen around the time the panels and battery life’s span would end . Pre 2020 it would of returned much earlier unfortunately wars and phantom roses have negated solar benefit unless you are a grid that needs capacity to charge cars without building new power stations then solar roofs are only good for a short term good feeling about eco terms .

Part of the reason why I installed solar panel is because I am retiring soon. With upcoming reduced incomes, I better start reducing my expenditures as well.

Gary, what software did you use to draw the ROI graph - particularly that animated piece where there was a step-price increase in the price of electricity?

If I'm getting 1:1 net metering in IL, why would I need a battery outside of grid outages (which are very few per year for me - maybe two per year for 20-40 minutes each)? I just put excess power on the grid and pull it back whenever I need it. My utility (Comed) has said I can't buy at night, store in the battery, and sell back during the day. They don't allow battery energy to be sold.

Hi Gary, In your previous video I didn't agree, or rather thought it was problematic, to isolate the battery from the rest of the system in your formula. In your table you calculated 12p/kWh cost for using the battery over 10 years and I thoughtut what if your solar PV generated enough electricity to pay for the PV plus battery in five years? Surely that should bring the calculation to 0p/kWh at the five year point and -24p/kWh over the five to 10 year period where it pays for itself again? That's what you have in your excellent dissecting graph lines illustration. That's definitely the way to go. In fact it gets more complicated still considering other things like heat pumps making the best cost effective use of your generated PV and getting rid of gas consumption and standing charge, exporting in summer, banking the surplus in the account for use in winter at cheap rate (long term storage!) and of course any grants available making some of it free or low cost. I worked out that even increasing the size of your battery could also pay for itself over winter by making the most of the cheap rate at night and minimising the peak use from when a smaller battery may run flat. The "pay back" time didn't seem to change much. I prefer to work out the total saving of the whole system (PV+ battery+ heat pump) compared to previous combined gas and electricity which could be perhaps 75% and from that working out return on investment per year as a percentage (just because it compares so well to any savings accounts these days!) and then pay back time. The pay back for a gas boiler by the way was not shoveling coal and the pay back for coal fires was not chopping wood. The pay back for heat pumps plus solar and battery is not a physical toil advantage but financial and the invisible lack of C02. We've come a long way from burning a pile of sticks on the floor with a hole in the roof to let the smoke out.

Hi Gary, will you be at Solar & Storage Live next week? I don’t see you on the attendee list. Rob

ROI is one thing but you have to account for lost opportunity cost. If you invested the money for the solar array instead you would still have interest. The solar array doesn't come out ahead until you have also saved any interest you would have gained. Secondly you can imagine inflation as it affects both sides equally. Increase in electricity prices over and above or below inflation does need to be considered but that is high on impossible to forecast.

Never any good at maths... but i can see from my bills this time last year to this year, only 6 week into the solar expereamce, my electricity draw from the mains is down a third.. Now it will go up as iv converted to electric rads.. but am off setting this with the money not used on gas heating. Also using less water because of the eletric water heater under the sink.. and can controll each room as needed.. am going for anyother battery next year and at least 4 more PV units..

Can you do a video on cost/savings on implement a battery without solar? Could it be more cost effective just to pull in all your energy at the lower rate?

Hi Gary, should the green line not have a steeper slope to represent the interest you’re paying on the initial sum or the interest you would have earned especially as it’s quite high atm

I have had blackouts and surges destroy my fridges, tvs where the surge protection didn't protect it etc. What annoys me is I just want something that will backup for about 3hrs and prevent temporary blackouts and trick my solar to work in daylight if blackouts happen during day hours. Not 10K installs

Just about to invest about 15k in a solar and battery set up plus an ev charger I guess my only concern is im constantly seeing headlines of new breakthroughs in solar panel tech And the last thing i want is to find out in a years time my setup is now the equivalent of a nokia 3310 😅 (Although i guess in battery life terms thats probably a good thing 😅)

One thing my friends have pointed out to me, after my solar install, is that similar ROI can be achieved by putting the initial investment into stocks and shares. In your line graph, it means the orange line would be not as steep because it is subsidised by gains from shares. How would you respond to this kind of thinking?

Dry good presentation! As governments have embarked on the great green energy transition, the enormous cost of building the green energy generation, storage, and transmission network will undoubtedly be passed on to the end user. Furthermore, as most governments have set unrealistic and for the most part, unrealistic transition targets, we are more than likely to see blackouts as the network base load drops off the proverbial cliff of bad, ill informed government policy making. It is no small thing to re-boot the national grid after a blackout and the re-boot timeline may in some cases take in excess of 24 hrs. May I suggest therefore, that a battery storage solution will in some measure protect you from the worst vagaries of bad government green energy transition policy making. It is hard to put a cost on energy security when calculating ROI.

Could you do a video on how to use solar and batteries when the grid falls over. My installation currently goes offline if there is a power cut and I've been wanting to add to the array and add batteries but the loss of all power when the power grid fails is putting me off.

Considering the risk of failed batteries and degradation, would it not just be better to export solar at 15p/kWh and then buy it back when you need from the grid on a tariff like Octopus Tracker that has averaged close to 20p/kWh?

Hi Gary, I’m a big fan of solar with over 200 kw over a commercial portfolio. I have just moved to a Grade 2 listed house, my first instinct is to fit solar, but it’s a bit of a faff with aesthetics, distance from the house and planning. I have two EVs so am on the Octopus Intelligent tariff at 7.5p off peak, I do have space for a battery, do you think it is a proposition to just get a larger battery and charge off peak from the grid? I have the option to connect to 3 phase.

I am 71 years of age. I have 44 panels on my roof and separate solar hot water. I have just got a price on batteries (19.92kw) at a price of $21,000 (AUS). The electricity supplier limits this year's electricity cost to $2,600.00, but this is also made up with Government incentives. If batteries last say 10 years, I will be 81 years old. Is buying the batteries a ROI. I know there is other considerations (electricity supplier rate, input tariff rates, inflation etc.) but is it financially viable. It is a big upfront cost. It has also been suggested that I go to an electricity wholesaler. I liked your ROI video, and it explained it better than the salesperson. What your thoughts. Is the battery install financially viable taking age, ROI upfront costs and changing to a wholesaler that operates in Australia.

Re your benefit 1, batteries are not particularly 'green'. They are actually more likely to increase your carbon footprint than reduce it. The main 'green' benefit is in helping the grid by reducing demand peaks.

I’m not sure I agree that all of the initial investment is a sunk cost, solar installations add value to a property. That value depreciates over time but there is perhaps other points at which it becomes profitable. The line is probably more bouncy than straight. For me personally I'm only making the investment because it has an ROI, it's just doesn't seem important when that is as it's too far to really have a material impact on finances. It will pay for itself in terms of CO2 within a couple of years, and it will pay for it's financial cost before it stops working. Forecasts are so speculative, betting on weather and future electricity prices makes a forecast worthless. There is an innate pleasure in self-sufficiency, I'm not sure if that was covered by one of your 4 reasons.

I have 16 to 19kw per day.

If you added more panels then the green line would jump up higher but turn down steeply. 😊😊😊😊 It is cheaper to add panels than home batteries.

A colleague of mine recently spent £12k on solar panels & storage battery. I spend about £550/year on electricity, once the standing charge is deducted. If having solar reduced my electricity consumption to zero I'd be saving £550/year at most. Take into account the opportunity cost of £12k, I could earn 3% nett return, that's £360/year, so overall savings are £190/year. Would I spend £12k to save £190/year? Obviously not. For me, the system would have to pay for itself within 5 years.

Look the most important thing is the battery.. that is the thing that makes you energy independent.. and you need one that last you 30 years!!!!!

No business would ever calculate ROI like this and business decisions on investment are really no different from investment decisions you make as an individual if you are looking at whether financially you would be better off making the investment. A business would always give a value to the investment at the point of installation and then include the depreciation of the asset as a cost. These calculations assume the value of the battery and solar installation is zero once installed which is clearly not true. A house with a battery and solar installation is worth more than one without, it's worth a lot more according to an estate agent I know. According to him it could increase the value of your house by as much as the amount you spent on the installation. Just because you can't liquidate the asset easily doesn't justify giving it zero value and you certainly can't argue that for battery installations which could be resold easily. This is important because calculations done like this give returns on investment which are years longer than they really are.

The ROI narrative was pushed by the utility companies to make sure people understand their important role back then and in the future. Distributed systems cannot compete against their superior cost efficiency and people should not do stupid things like rooftop solar. The cost efficiency and the ROI of centralized smokestacks go unparelleled and we’d be better off by just keep sending our money to their way. Why ROI was such a nice tool to delay rooftop solar installations? Because all investments in centralized system had earlier and always been all about the return of it. The status quo was under threat. And then the ”impossible” happened. Rooftop solar became extremely cheap. And the prices can still come down by 90%. Same goes with batteries. You’ll end up to same cost when building a new home if you replaces roof tiles with panels and hot water boiler with batteries. Utilities are in their Kodak moment. 📸💣 They should have provided PV+BESS as a service a decade ago already.

Absolutely impossible to get a return. As you say all of your other examples give tangible return that is not measurable financially. If you take solar/ battery as an investment you have to compare it with investing your money in a bond of some kind. I worked out that if you compound the money at 4% and use one of my quotes. That taking a 10 year payback was impossible. I'm 77 and may not last that long certainly won't be in this house in 10 years time. It worked out that 1 KWh of solar would cost me 53p to produce for a 10 year projection. I could get 15 p for export and I pay 20p for import. Numbers which are startling. I don't believe that co2 is causing climate change. I don't think climate change is as bad as it's being hyped up to be.