Solar Panels / Battery - Is It Worth It For YOU In 2023? Payback/Return On Investment Calculator

after much deliberation i've made a decision on whether solar and or battery storage are worth investing in today is it really a no-brainer or is it just a fear of missing out i'm going to share my experience with you as a domestic consumer on how to reach my decision and why i looked at solar and battery storage a few years ago and from my calculations it didn't make sense at the time but given the current energy crisis does it now make more sense financially or are we all going to be sucked into making an expensive decision to a temporary problem specific thanks to adam a subscriber on the channel who contacted me prompted me to look at the figures again i've spent several hours creating a spreadsheet to help me make an informed decision if solar and or battery storage is a viable option for our household i suspect this will be a useful tool for many people who are considering the same and i'll be talking you through how to use it and a few other things to consider in addition to just plugging in the numbers and looking at the payback period and return on investment just to say isn't within the scope of this video to discuss which solar or battery system is best more whether it's worth it in the first place you can download a copy of the spreadsheet via the link in the video description box below and use it for your own figures if you're here just for the spreadsheet that's fine but please do support the channel by subscribing for free and sharing the video with friends and family who you think might benefit from it so let's jump on the computer and check it out this is the starting point some basic information about your electricity consumption and tariff if like me you're on a time of use tariff like octopus go you can put in your peak and off-peak consumption data and prices here you can find historical peak and off-peak electricity consumption data and your current electricity unit rates from your energy provider's online account it might seem a bit cumbersome finding all the data to input but it's commonly known that garbage in means garbage out accurate figures now will result in a more reliable and therefore more useful result for which you can base your decision on whether to spend potentially thousands of pounds on once you've entered your consumption and tariff data the row and table below will self-populate the next section relates to average daily solar generation if you don't currently have solar panels you can simply input the kilowatt potential of the system you're looking to install and the spreadsheet will calculate the estimated generation per quarter based on my current solar rays figures if you already have solar you can override this and input the q1 to q4 data yourself if you don't want to use my quarter generation data you can click on the help button which will take you to this page and should help you work it out just below i've left this section defaulted at 45 assumed self-consumption of your generated solar this 45 figure relates to findings of a study done by the university of oxford and if you're interested you can find that paper here i would keep this the same unless you are just interested in installing solar only and i'll explain why as we go on the smart export guarantee or seg pays customers for renewable electricity they have generated and put into the grid there are a number of electricity suppliers which offer the sag i've just added up to the cengiz amount which at the time of making this video i understand is 4.1 p per kilowatt hour of exported solar generation the amount of battery storage you have or plan on getting can be entered into this last section once the basic information is complete you can go on to the most relevant section based on what you're hoping to achieve for me it was certainly interesting going through the various options which helped me make a decision and understand what may influence my engine needs and payback i'd encourage you to look at all the options it shouldn't take much time now that you've already entered the majority of the data so starting with the solar only sheet you can see that the information we input in the sheet before has been pulled through the peak cost of electricity is calculated by subtracting the percentage of assumed solar self-consumption multiplied by the estimated amount produced a minimum value of one kilowatt hour has been applied in the winter months and 0.75 kilowatt hours in the summer months to account for peaks above solar production of course you can change this in the formula if required by amending this value the quarterly seg value is formulated using the assumed unused solar generation i.e 55 when 45 of the expected solar generated is self-consumed you will need to add the cost of the solar only installation here and once entered a payback period in years and return on investment figure will be displayed you can go back and change the assumed self-consumption of solar if you have evidence to suggest it should be different otherwise i would recommend leaving it at 45 it is expected and can be seen that a higher percentage of self-consumption of solar generated results in a lower payback period and a higher return on investment looking ahead with the crystal ball over the next 15 years you can set a rate of inflation here which will influence your savings over this time and in turn reduce the payback period and increase the return on investment at the bottom you can see the total saving you can achieve with solar only minus the cost of insulation for comparison at the end of each of these sheets i've also included a section as to what would happen if you were to put the cost of the insulation into a stocks and shares isa so that's different to a standard cash isa with an assumed annual return of 5 over the next 15 years even taking into account fees of 0.22 you get with something like vanguard's life strategy 100 equity fund and by the way that's not a recommendation or financial advice you can see a good return but of course this isn't guaranteed you can calculate this figure based on investing your cost of installation by clicking on the help cell just don't forget to minus the fees at the end with battery only again you can see our battery storage in kilowatt hours have been pulled through we have a new section labeled efficiency loss i've chosen to leave this at 10 you can see a higher efficiency loss reduces the payback and return on investment this time the peak cost of electricity is calculated by subtracting the total kilowatt hours of your battery storage minus the percentage efficiency loss from your total peak consumption figures a minimum value of one kilowatt hour has been applied to account for peaks above the total inverter output again you can change this in the formula if required by amending this value the off-peak cost is calculated by taking original off-peak electricity consumption data plus a full charge of your battery's usable capacity as before you will need to add the cost of the installation and rate of inflation an interesting scenario here would be if off-peaks harris disappeared entirely it would completely negate your investment in a battery system only now let's look at a system with both solar and battery storage this time the peak cost of electricity is calculated by subtracting the percentage of solar self-consumption and total kilowatt hours of your battery storage minus efficiency losses from your total peak consumption figures as with previous sheets a minimum value has been applied to account for peaks above the total inverter output although with both solar and battery storage this may well be lower and can be changed if necessary as per the battery only sheet the off-peak cost is calculated by taking your original off-peak consumption data plus a full charge of your battery storage the assumed unused solar generation is then reduced from this figure the quarterly seg value is formulated by taking the total daily solar generated minus the battery storage capacity as we want to first fill the battery before exporting it minus the assumed unused solar generation i 55 when 45 of expected solar generated is self-consumed you can see if we were to instead invest the cost of the installation and the stocks and says isa at the end of 15 years this figure would have compounded significantly albert einstein once said compound interest is the eighth wonder of the world and i can now see why the other thing to consider here is is bigger better i've seen a number of suggestions that you should buy as much battery storage as you can well it's only useful if your baseline electricity consumption requires it you can see increasing the storage capacity and therefore the cost significantly increases your payback period and reduces your return on investment with most systems you can always retrofit additional battery storage capacity should your electricity consumption habits increase the next two sheets are personal to my current setup but i thought i'd leave them in if anyone is in a similar situation we had a 2.85 kilowatt potential solar array added in 2015 and it currently benefits from the feed and tariff fit payments you can see adding an ac coupled battery storage system at a cost of 4350 would yield a pretty impressive payback period and return on investment conversely adding an additional solar array and battery storage system at a cost of eight thousand nine hundred ninety nine pounds produced an increase in the payback period and reduced the return on investment i've chosen to remove the seg from these calculations as whilst it can be done it would have taken me even more formulas to separate the generation from each array and my mind was already blown by this stage so after all of these numbers and deliberations what have i actually decided to do and why from the different scenarios the shortest payback period and the highest return on investment for me would have been to install a battery system to complement my existing solar panel array however i've chosen not to do this i've actually gone ahead with installing an 8.2 kilowatt battery an additional 4.68 kilowatt potential solar array hopefully more once measurements have been taken and there are a few reasons for doing this at some point in the near future we plan to replace our aging ice or internal combustion engine car with an electric car and our electricity consumption will certainly increase adding more solar will provide further protection should off-peak tariffs disappear entirely whilst i can't see this happening nothing is ever certain installing a battery system only would be subject to 20 vat whereas batteries installed at the same time as solar panels are subject to only 5 v80 we're planning on staying in our current property for the next 20 to 25 years and the solar panels will still be generating electricity at that time it's maybe something to think about if you're considering moving home in the next five to ten years is it really worth installing if by the time you've paid it off you're moving only for someone else to benefit from the savings the additional solar will increase the total output and allow us to use several high consuming items together during the day without requiring input from the grid for example charging an electric vehicle and then turning on the oven for some impromptu baking or that cup of tea that you can't put off any longer and even though i've spent a long time looking at the financials one of the main aims with installing solar and a battery storage system is to reduce our carbon footprint each kilowatt hour of electricity produces approximately 233 grams of co2 based on the carbon emissions generated by the current uk power stations for our annual electricity consumption of approximately 6 500 kilowatt hours that's a massive 1.5 tonnes of co2 so what about sticking the money in the stocks and shares isa well of course if funds allow you could always do both if you found this video useful and think i've earned it then please consider liking it and subscribing to the channel to keep up with new content we'll be uploading you can also share this video with any groups friends or family who will benefit from seeing if solar and or a battery storage system is worth it for them using the downloadable spreadsheet and let me know in the comments section below have you made or are making the leap in solar and battery storage thanks for watching see you next time

Channel: Everything Home

Views: 21,388

Keywords: home battery, batteries for the home, energy prices, octopus go, battery backup, home battery system, solar panels, everythinghome, everything home, energy crisis, are solar panels worth it, is battery storage worth it, gas prices, electricity prices, solar payback, return on investment

Id: XqqlU84q5-0

Length: 11min 36sec (696 seconds)

Published: Mon Feb 28 2022