Battery Business Case: a checklist for your C&I site
If you’ve considered a ‘solar battery’ for your home or business but have no idea if the business case stacks up, this article is for you.?
Since 2007, Australians have installed over 3 million solar systems on homes and many hundreds of thousands of systems into businesses, making us the gold standard for solar take-up globally. In the early days of solar installation, feed in tariff incentives were very high - up to $0.60 per kWh - but as the take up accelerated, the incentives reduced and now pay less than $0.07 per kWh (moving to $0.00!). During daylight hours, the grid has too much solar energy and they don’t want more!?
With the obvious solution being to install batteries to store that excess solar, it’s time to start doing some number crunching on the value of a battery at your site. We all know battery costs are typically high, but did you know that there are multiple services a battery can provide in addition to providing you with power? Each of these services increase the viability of your business case but getting the right-sized battery for your site is an important first step.
Like with any energy buying decision (solar panels, change of retailer, etc), understanding your current usage is critical. The more data you have, the better the buying decision you’ll be able to make. This should include not only the raw amount of energy you consume but critically, when you consume it and at what rate. Now is a good time to do a deep dive on your last three years of energy consumption (Covid lockdowns will likely have altered your recent demand profile) as well as the set up of your tariff. Also take into account any existing solar system, the amount of energy you’re exporting and when.?
Energy Use Checklist:
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Battery Value Streams = Value Stack
Now you have your detailed site usage data, the first step in creating a viable battery project is to find multiple battery services which create value (together known as a ‘value stack’). The simplest of these value streams is arbitraging your time-of-use tariff - that is, offsetting your daytime export against your nighttime usage. Increasing your solar self-consumption is another simple value stream that adds to your stack.
When operated as part of a Virtual Power Plan (VPP), batteries can access and participate in external value streams that can add significantly to the batteries’ viability. These include wholesale market arbitrage (buy cheap energy, store it and sell it high later) and FCAS market participation (grid stability services). Building a successful value stack relies heavily on how the battery is operated - knowing when to charge and discharge across each service to earn maximum value from the battery asset. ?
Battery Checklist:
The science of modelling battery viability has improved enormously over the last 2 years thanks to some impressive work by both battery manufacturers and specialist software modelling companies. If you're keen to continue the journey towards energy independence and reduced energy spend, Enervest is working closely with the leaders in this field to provide the best business cases to Australian energy users. If you'd like to know more please reach out to me via email, phone or direct message.