Do I actually need a battery?

The gap the battery is arbitraging

Solar’s whole economics turn on one fact: a unit you use is worth far more than a unit you sell.

At the Ofgem price cap unit rate a unit you use is worth 26.32p. At the median open untied SEG rate a unit you export is worth 4.1p. The difference — about 22p — is what a battery earns each time it stores a unit you would have exported and gives it back when you would have bought.

That is the entire mechanism. A battery generates nothing. It only changes which side of that gap a unit lands on.

How many units does it actually move?

This is the number quotes get wrong, and it is not a matter of opinion: MCS publishes it.

Guidance note MGD 003 is the authoritative UK method for estimating self-consumption, and it includes tables for the uplift storage produces. For the household archetype our own rooftop calculator defaults to — 2,500 kWh of annual consumption against a 3,676 kWh array, someone at home during the day — MGD 003 gives:

At a 22p spread, that is roughly £114 a year for the small battery and £221 a year for the mid-sized one.

Those are modelled figures for one household shape, and yours will differ. But they are the right order of magnitude, and they come from the same method your installer’s MCS performance estimate is meant to use.

Why the fourth kilowatt-hour earns less than the first

Storage has diminishing returns, and steeply.

The first kilowatt-hour of capacity fills nearly every day there is any surplus at all, and empties nearly every evening. The fifth fills only on the days with a large surplus — which in Britain means summer — and only empties if the evening demand is there to take it.

Notice what the MCS figures above do: doubling the storage does not double the uplift. Going from around 1.6 kWh to around 3.6 kWh of usable capacity roughly doubles the capacity, and adds about 93% more units. Push further and the curve flattens hard. MGD 003 caps self-consumption at 95% however much storage is fitted, because a household cannot use more than it uses.

Capacity that does not cycle earns nothing at all. It is the most expensive thing on a quote and the easiest to oversell. The sizing page does that arithmetic properly.

Working out whether yours pays

You need three numbers, and you have two of them already.

1. The spread. Your import unit rate minus your export rate. Use your own bill and your own SEG tariff, not ours.

2. The extra units. From the table above, or from our battery size calculator, which runs the surplus month by month rather than annually — a battery’s problem is that the surplus is not spread evenly through the year.

3. The installed price. From your quote, VAT included.

Then: annual value = extra units × spread. Simple payback = price ÷ annual value.

The cases where the answer is no

Your export tariff is already good. At 15p export the spread is roughly halved and so is everything a battery earns.

You already self-consume most of your generation. Home all day, EV on a daytime charge, heat pump running — there may be little surplus left to store.

The array is small. A 2 kWp system on a shaded roof may rarely produce enough surplus in one day to fill even a modest battery, so the battery spends much of the year part-cycling.

You want it for blackout protection and have not checked. Most batteries do not keep your house running in a power cut unless they were specified with a backup circuit and installed accordingly. It is an option with a cost, not a default. Ask explicitly.

You are being sold it as the thing that makes the solar pay. It is a separate investment. Ask for two payback figures — solar alone, and the battery on top — and be wary if the quote cannot produce them.

The cases where the answer is yes

You are on a tariff with a wide day-night spread. Then the battery earns from cheap overnight import as well as from stored solar, and it cycles year-round rather than only in summer. That changes the arithmetic more than anything else on this page — see a battery without solar.

You are out during the day and in during the evening. The classic case: generation peaks when nobody is home, demand peaks when everyone is. That is precisely the gap storage closes.

You are installing solar now and would want storage later. Then it is usually cheaper to fit a hybrid inverter at the outset even if the battery comes later, rather than replacing a working inverter afterwards — see AC or DC coupled.

VAT

Installing an electrical storage battery in residential accommodation is zero-rated, and has been since 1 February 2024. That covers retrofitting a battery to existing solar, a standalone battery charged only from the grid, and a battery doing both.

Full detail, including what else qualifies and the Northern Ireland position, is on VAT on solar panels and batteries.