In this article, we will provide you with the answers and guide you on what to look for in your ideal energy storage system.
Hello Lower Bills, Goodbye Blackouts and High Carbon Emissions
In general, it is advantageous to install a solar system with household energy storage solutions in the long run. Homeowners can benefit financially and contribute to the low-carbon future we are striving for.
The most obvious advantage is a reduction in your power bills. Fluctuations in the global energy market, particularly the increasing prices of fossil fuels, are putting a strain on household energy expenses. According to European Commission stats, the electricity price including taxes further increased in the first half of 2023 reaching the highest recorded price of €0.2890 per KWh for the household consumers in Europe. Using solar storage system can rely less on the public grid and lower the electricity expenses. Many governments and institutions are proposing policies or initiatives to encourage green energy use.
Another benefit is the independence from the utility grid. Imagine experiencing a blackout during an extremely hot summer when you rely on electricity for digital devices and the internet. Without power, you would face the inconvenience of not having a functioning refrigerator or air conditioner. Energy storage solutions can provide a backup power supply during blackouts, eliminating the need to worry about such emergencies.
Besides, installing renewable energy storage products helps reduce waste generation and contributes to lower carbon footprints, thereby mitigating environmental impacts. It is a forward-thinking and cost-effective choice for homeowners seeking a green and sustainable lifestyle.
Factors Affecting Payback Period and Return on Investment (ROI)
The payback period is the time it takes to save as much on power bills as the cost of your solar system. The average service life of a solar system is around 25 years. Assuming a payback period of 10 years, the remaining 15 years will be pure savings.
However, the payback period and ROI vary from case to case. It is a big investment for installation and has a relatively long payback period, which requires us to carefully weigh the value for money.
The following factors will affect your calculations:
Product Expenditure (Lifespan and O&M costs) According to a survey conducted by City Plumbing, most homeowners hesitate to install solar systems due to the high upfront costs (70%) and concerns about product reliability and maintenance (24%).
Purchasing renewable energy products is a significant investment. How can you ensure you budget for the right products? Lifespan and O&M costs are crucial factors to consider.
To illustrate this point, let's consider buying cars. Buying a car with better quality that lasts for 20 years, even at a slightly higher price, is more worthwhile than buying two cars with a 10-year lifespan. The same principle applies to household power storage products. Assuming your entire solar system will be used for 20 years, you may need to replace or repair the storage products during that time. Products with longer lifespans and higher reliability can reduce the cost of replacement and repairs, resulting in lower overall expenses.
However, the limited lifespan of household energy storage products, typically around 10 years, has been a bottleneck in the industry. Challenges arise from battery chemistry and technological limitations, such as the gradual aging, reduced storage capacity, and efficiency of lithium-ion batteries.
Recent developments in the industry bring hope for longer-lasting household energy storage products. As shared by Huawei, now the industry has figured out new ways to lengthen the product service life, thanks to advances in materials science and battery technologies. And Huawei may have a flagship solar energy storage product coming soon, with a lifespan of more than 10 years.
Energy Prices and Usage
The local energy prices and your energy usage patterns are crucial elements to consider when calculating the payback. These factors will also help determine the size of the product you need.
Generally, the higher your local electricity rates and the more energy you consume each month, the more you will save annually. It's also important to consider your power usage during peak hours. Utility companies are increasingly offering time-of-use plans, charging higher rates during peak hours. By using your stored solar power during these peak hours, you can save even more.
Renewable Incentives
Households can benefit from government initiatives that offer rebates, credits, or discounts for using renewable energy technologies. Using green subsidies in Germany as an example, feed-in tariffs are available for every operator of a facility that generates energy from renewable sources. Landlords adopting renewable energy may also be entitled to raise their rent by up to 11% of the modernization costs.
