We recently received a query from a customer who was concerned about the impact of installing a solar PV battery storage system on their Feed-in Tariff (FiT) payments. Let's begin by familiarising ourselves with two important concepts:
Home battery storage allows you to retain all the electricity generated by your solar PV panels instead of exporting the surplus to the National Grid. This enables you to reduce your reliance on imported electricity and lower your bills.
The Feed-in Tariff is a government initiative aimed at incentivising the adoption of renewable energy systems by compensating individuals for the electricity they generate. While the rates may not be as high as before, it still serves as a welcome bonus for anyone investing in solar PV.
Initially, we assumed that FiT payments would remain unaffected by the installation of a battery storage system. However, the answer turned out to be more nuanced than expected. The crucial factor lies in whether the system is AC-coupled or DC-coupled:
AC-coupled systems involve storing the batteries on the grid side, where the electricity is first converted by your inverter and measured by your generation meter before being stored.
DC-coupled systems entail installing the batteries on the same side as your solar panels, with conversion to AC electricity occurring only when it is used.
The primary FiT rate is determined by the amount of electricity generated. As batteries lose energy during the charging and discharging process, storing energy as DC before it is registered by your export meter may result in some wastage, leading to lower payments.
Another potential issue arises if DC electricity is drawn from the battery for immediate use before it reaches the generation meter. Consequently, the reading on the meter would be lower than the original generation amount, resulting in adjusted payments.
To maximise FiT payments, it is advisable to install the battery on the side after the electricity has passed through the generator.
It's important to note that if you are retrofitting a battery system rather than installing one alongside a new solar PV system, you are more likely to be offered an AC-coupled system. Opting for a DC-coupled system typically involves additional equipment or replacing existing components.
Regarding FiT export payments, it is worth mentioning that most systems have a generation meter but lack export meters. Consequently, the government pays you 50% of your generation reading regardless of the actual export amount. Therefore, installing a battery storage system will not affect your export payments.
However, it's essential to consider the potential impact of the smart meter rollout, expected to be completed by 2020. Smart meters will automatically measure both your import and export of electricity. At this point, the government may choose to compensate solar PV system owners based on these actual readings rather than the estimated numbers mentioned earlier. In such a scenario, if you store all your electricity in batteries instead of exporting it to the grid, you may not receive any compensation for exports.
To sum up, installing a solar PV battery storage system does not necessarily affect your FiT payments. However, it's crucial to consider this factor when selecting the type of system. If maximising your payments is a priority, opting for an AC-coupled battery storage system would be the recommended choice. Contact GMI Electrical Ltd today for quotation.
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