The government is offering a Boiler Upgrade Scheme grant of £7,500 to install a heat pump, so why not have a similar scheme to encourage the deployment of batteries?
Payback periods of around 11 years, combined with initial outlays of around £8k for a typical system have resulted in sluggish adoption. Accurate data is not available, but I estimate that 25,000 domestic batteries were installed last year, the rate is increasing, but for half of UK homes to have a battery by 2050 we would need to be installing 500,000 per year.
Homes with batteries benefit from lower bills and greater energy security. The whole electricity system benefits from homes having batteries: Batteries smooth out peaks in demand, lowering the stress on the system in late afternoons, reducing the cost of electricity for everyone, and increasing use of green electricity.
Enhanced flexibility schemes such as Virtual Power Plants, where many distributed assets, like batteries, work together to balance the network could bring greater returns for households. The future of Vehicle to Grid schemes is not certain so we will need alternatives.
For those in fuel poverty the capital outlay would be impossible to cover, but adding a battery to their home could reduce bills by around £500 per year lifting them out of fuel poverty.
For UK homes where solar is an option, the initial outlay is doubled, but the payback period is almost halved to 6 years, as export payments are added to the returns.
An immediate change the government could make is removal of VAT on standalone battery installations, reducing the cost by 20% (it doesn’t apply if batteries are installed at the same time as solar).
The next action is to use batteries to address fuel poverty, much of this is in the rented sector, so working with housing associations and landlords is essential.
Then extending the Boiler Upgrade Scheme to cover batteries and solar would kick start the market.
