How Smart Tariffs, Solar Panels and Batteries Work Together to Slash Your Energy Bills

How Smart Tariffs, Solar Panels and Batteries Work Together to Slash Your Energy Bills

 

Many people come to solar with the idea of wiping out their energy bills entirely.

And whilst that is possible, solar panels are actually just one part of a multi-faceted equation that reduces your energy bills

The truth is that Smart Tariffs & Batteries are just as important as solar when it comes to lowering your bills & reducing your reliance on the grid 

Now we know that this can all seem a bit overwhelming. With so many moving parts, we want to make things as simple as possible for you to understand how Smart Tariffs, Solar Panels & Batteries work together to turn your home into an energy powerhouse

So, what actually are Smart Tariffs and Batteries?

Let’s get the definitions out of the way, so we’re crystal clear on what we’re talking about here:

Smart Tariffs – These are a type of energy plan where electricity prices vary depending on the time of day. They’re enabled by a Smart Meter. They’re also called Time-of-Use tariffs.

If you’re using a Smart Tariff, usually electricity will be cheaper overnight, when overall usage is low, power stations are still operating, and wind turbines are still spinning. It’ll be more expensive during the peak hours of the day and evening such as when most people get home from work and begin cooking for dinner.

‘Economy 7’ is one of the ‘Original’ Time-of-Use tariffs which offers 7 hours of off-peak, cheaper overnight rates. It was originally introduced to benefit homes with storage heaters that would heat up overnight. However, Economy 7 is slightly outdated now with much more flexible options available that better cater to home energy needs.

For example, the Octopus Flux Tariff is a great option for those with Solar Panels & Battery Storage. This offers a Peak rate, an Off-peak rate, and a standard day rate. Plus, it offers rates for exporting energy back to the grid. 

The rates can vary +/- 2p/kWh depending on your area, but these are some rough guidelines on the Octopus Flux rates:

 

Battery Storage – This allows you to store any excess electricity generated by solar panels, or store electricity from the grid. 

They’re great if you need to use energy you generate now, for later. Plus, if configured correctly, many modern battery storage units protect your home from power cuts. They let you use your stored energy to keep the lights on even when others on your street lose power.

Battery storage capacity generally ranges from around 3kWh on the small end, and 15kWh on the larger end. This allows them to be tailored for a home’s energy needs.

Ok… But how do they work together?

By themselves, each piece of tech has it’s own benefits – but together is where the real magic happens 

With a well designed system, Smart Tariffs, Battery Storage and Solar Panels all work together as an efficient, energy saving trio

During the day – Solar Panels take the lead 

In daylight hours, your solar panels will be doing the work to power your home. They convert solar energy into usable electricity for your home, and often produce more than your home needs in the day – especially if your home is empty in the day. 

With solar panels alone, this excess energy would go back to the grid for a modest export payment. However, with battery storage, you can store that extra energy and use it later on when you actually need it (like when everyone’s home in the evening). 

Evening – The Battery’s time to shine

When the sun goes down, your panels will stop generating electricity. Then, your battery will automatically kick in to power your home. 

This covers what’s typically the busiest time for electricity use in homes. It’s when everyone is home and using appliances like the TV, lights, oven etc. That’s why energy providers classify these hours as ‘Peak times’ on tariffs and charge much higher rates.

With a fully charged battery from solar during the day, your battery steps in to meet that higher demand, meaning you can avoid peak electricity prices.

Overnight – It’s time for the Smart Tariff

The final piece of the puzzle happens overnight once everyone’s asleep. 

Overnight, your Smart Tariff will give you access to a much cheaper electricity rate. Once your battery runs low following peak time use, your system automatically charges it using that reduced rate through the night. Then, by the time the morning comes around, the battery’s fully charged, ready to be used for boiling your kettle, turning on the lights and powering showers – all whilst avoiding the day rates from grid electricity 

So across a 24 hour period, the system works like a cycle:

 

This lets you minimise how much energy you buy from the grid, especially during expensive peak times. 

Homes using this setup can save hundreds, even thousands per year on their energy bills, depending on their system size

Smart design makes all the difference

To maximise savings, your solar system design must be based around your usage patterns, and whichever Smart Tariff you’re on.

It isn’t just about throwing panels on your roof and fitting a random battery. Your system needs to be designed with intention, and that’s what we do at JD Allen

Here’s how we do it:

Solar Panels – You’ll need the right amount of panels to give you enough electricity to power your home. You’ll need to know how much electricity you typically use, so we install the right amount of panels. You’ll also need your roof dimensions to know how many you can actually fit.

Hybrid Inverter – This is the real brains behind the system. The Inverter converts solar energy into usable electricity for your home. A hybrid inverter will also allow your battery to charge from both your solar panels and the grid. This is essential to take full advantage of Smart Tariffs. Without it, your battery can’t charge from the cheaper off-peak rates. 

(Alternatively we would recommend micro-inverters paired with an AC-coupled inverter and battery if you have shading issues – see one of our previous blogs to understand the need for microinverters in certain instances)

 

Battery Capacity – Your battery system needs to be large enough to take you through the evening and into the next day’s solar generation. If it’s too small, you’ll run out of stored energy. Too big, and you won’t always fill its capacity, making it much longer until you make the money back from your initial investment. That’s why we tailor every battery system based on your actual needs.

Usage Profile – Your daily routine makes up a huge part of your energy strategy. What time are you waking up in the morning? When does most of your usage happen? Do you work from home? All of this shapes your usage patterns and the type of system we’ll design for you. 

For example, if you’re a family that spends most of the day out at work and school, chances are most of your electricity usage will be in the morning rush and in the evening. In this situation, larger battery storage will be important, as you’ll need the capacity to charge from solar in the day, and from the cheaper rate overnight so you avoid having to pay during peak times. 

However, if you’re working from, or spending most of your daytime at home, you’ll be using much more solar power as soon as it comes in. Therefore, you won’t rely as heavily on battery storage. You can use a slightly smaller battery capacity, topping it up on the overnight rate only when needed.

Is it worth it financially? 

Yes, the upfront cost of battery storage within your solar system is higher, but when it’s designed to match your needs and combined with the Smart Tariff, the long term return on investment (ROI) is huge.

A solar setup alone will cut your energy bills by up to 50%. This is great by itself, but making full use of battery storage will see your savings go to 70% and above on your bills. 

Using Smart Tariffs will mean the electricity you have to buy and store from the grid could cost as little as 7-15p/ kWh. This is often around a third of the Standard daytime rate you’d normally be paying. 

The bigger the gap between your current peak rate, and the off-peak rate on your Smart Tariff, the more you’ll be saving.

Every home is different, but most homes on a Smart Tariff, with solar panels and battery storage will have paid for their system within 8-10 years. After that, the system won’t even be halfway through its lifespan, giving you many, many years of solar electricity, protecting you from rising rates and giving you energy independence. 

Final Thoughts

Solar panels are only as good as the system behind them. 

By combining them with great design, smart tariffs, and a tailored battery system, you’ll maximise your savings, and ensure the time before you see an ROI is much shorter. 

When your system’s being designed, the Smart Tariff you’re on, and your usage patterns are essential for working out what kind of system you need. 

And the chances are, if the quote you’ve received from a Solar Installer doesn’t mention any of these, they may not be the most qualified to deliver a system that actually works for you. 

At JD Allen Solar, we design systems around your usage habits, not just your roof. 

If you want a system designed for you that incorporates smart tariffs, solar panels and battery storage,

Or maybe you’ve already got a system that you want to optimise,

Let us give you the hand you need – Hit the button below to enquire with us today 

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