Introduction
The commercial case for battery storage depends on which parts of your bill a battery can impact. Get that analysis right and the payback can be compelling. Focus on the wrong areas and you’ll either overestimate the return or miss the real opportunity. This article covers the three main areas where a commercial battery generates value, and the practical questions worth working through before you proceed.
1. Demand charge reduction
For large commercial and industrial electricity consumers, capacity-related charges can represent a significant share of total energy cost. These include TNUoS charges, which are partly calculated on peak consumption during defined winter Triad periods, and local distribution capacity charges. A battery that discharges during these peak windows reduces your measured demand, which can lower these charges either immediately or at your next contract renewal.
2. Time-of-use arbitrage
Half-hourly metered customers on flexible or agile-style tariffs see significant variation in unit rates throughout the day. Charging a battery from the grid during overnight low-price windows, or directly from solar during peak generation hours, and discharging during high-cost periods is a straightforward source of savings. The value depends on the spread between cheap and expensive periods on your specific contract.
3. Solar export optimisation
The export rate for solar is typically well below the import rate at times of high site demand. A battery paired with solar captures generation that would otherwise be exported cheaply and makes it available during high-demand periods. On sites where the solar array is sized generously relative to instantaneous demand, this can be a material additional value stream.
Questions worth working through before commissioning
- What does your peak demand profile look like, and how consistent are those peaks?
- What tariff are you on, and does it reward demand reduction or time-of-use flexibility?
- What is your DNO connection position in terms of import and export capacity?
- Would you prefer to own the system outright, or are finance and lease options more appropriate?
Conclusion
A battery system matched to the right value streams on your site can deliver strong returns. The starting point is always an honest assessment of which of those mechanisms are available to you, and that requires proper modelling before any capital decision.
If you’d like to understand what battery could realistically do for your site, book a free assessment and we’ll give you honest numbers.