How are PV and battery savings calculated

Demystifying Solar PV and Battery Savings Calculations

Understanding the calculations behind PV and battery savings might appear complex initially, but it boils down to some straightforward maths. The crucial aspect is having specific data and knowing where to access it.

Knowing saving calculations will help protect you from overselling.

Empower Your Solar Investment

At SolarandBatteryCompany.com, we encourage our customers to understand these calculations. This knowledge will not only give you confidence in your system's future performance and potential savings but also enables informed decision-making and personalised scenario planning. For example, some projections of systems employ generous inflation rates that make the payback of a system look better than it is, others don’t use any increase in energy prices at all, if you know how to do it you can apply the calculation how you see fit. We of course at SolarandBatteryCompany.com would be happy to guide you through this should you need any further help on the subject.

The Basic Savings Formula

Now, let's delve into the maths. The basic formula for calculating savings looks like this:

Energy Generated (kWh) x Unit Rate of Electricity = Savings.

However, this simple calculation assumes complete energy consumption, disregarding any energy exported to the grid, which would mean a Smart Export Guarantee (SEG) payment needs to be considered. If your savings are calculated on 100% usage, then you are likely over estimating the savings you will make because over the course of the year you won’t use 100% of the energy you generate, you will export at times.

Notably, energy stored in your battery from generation doesn't instantly translate to savings but contributes to savings when it is utilised later in the day, reducing reliance on grid imports.

Realistic Usage Assumptions for Accurate Savings

Determining the usage of generated energy within your home can be subjective. While some estimations suggest 100% utilisation, a more realistic approach might be around 70-80%.

For instance, applying an 80% usage assumption, the revised formula appears as follows:

(Energy Generated (kWh) x 0.80) x (Unit Rate of Electricity) + (Energy Generated (kWh) x 0.20) x (5.5p) = Savings.

In this formula, the 20% represents assumed exported energy, while 5.5p is the payment per kWh for exported electricity from the SEG.

As an example, generating 4000 kWh a year might result in roughly 800 kWh exported, yielding approximately £44 in savings (800kWh’s x 5.5p). If you are paying 28p per kWh to your energy company, then in this example you would be saving £896 per year, plus the £44. So in total you would save around £940 per year.

Beyond Basic Calculations: The Real Savings Picture

The above is of course a rather basic calculation, there are additional considerations that can impact overall savings. For example, adding battery storage into these calculations adds further complexity due to the different rates that a battery can take advantage of at certain times, such as a lower night time rate. You could also assume that you would utilise more energy because a battery captures more of that energy. The above calculation of 80% usage is probably more reflective of a system with a battery (although it can be more). Some people without a battery that are away from home during the day can export over 60% of their generation - something you definitely want to avoid, so a battery is critical to maximising savings rather than solar on its own.

Conclusion: Navigating Your Solar Savings

Understanding these calculations allows you to make informed decisions and estimates regarding your system's performance and potential savings. We at SolarandBatteryCompany.com would be more than happy to talk you through any calculations you are trying to make.

We have written on a similar topic previously, and the name of that article is “How much solar energy does a solar pv system generate” you can read that article here.