Battery Storage Systems Reduce Energy Bills by Over £1,000 a Year
To make use of a Home Battery Storage System, you need solar panels, right? WRONG. In the last couple of years, more and more variable time-of-use electricity tariffs have become available to homeowners. And by installing a battery, homeowners with a heat pump are in pole position to achieve significant cost savings in their electricity bills.
Our Technical Director Dave has done exactly that.
How Does A Battery Save Money?
With time-of-use electricity tariffs homeowners can access very cheap rates of electricity at certain times of day. Batteries save money simply by enabling you to fulfil a higher proportion of your electricity needs using cheap-rate electricity.
Let’s look at one such tariff as an example, Octopus Cosy. The tariffs available in OX18 are as follows:
So in very simple terms, a battery will be configured to charge up at times when electricity is cheap; and to discharge it’s stored power to cover any requirements you have when electricity is expensive. The arbitrage between these two rates results in a direct electricity bill saving.
Dave’s Installation
Here’s a breakdown of Dave’s installation and use case.
EXISTING RUNNING COSTS
Dave’s annual electricity consumption for all of this heating, hot water and general electrical usage in the house is 11,000kWh. On his existing flat rate tariff this was costing him £2,838 per annum.
RUNNING COSTS WITH A BATTERY
Following the installation of a battery, and switching to a time-of-use tariff will reduce Dave’s electricity bill to £1,625 per annum. That represents a saving of over £1,200 per year.
The graphic below demonstrates how much of Dave’s electricity was provided at the cheap rate as a result of the installed battery storage:
TOTAL INSTALLATION COST AND PAYBACK
Dave’s battery is installation is a very typical example of the type and size of battery that we would recommend to the vast majority of customers with a heat pump. The standard installation cost for a 10kWh battery is £5,900 including VAT. This means that payback on the installation (alongside a switch in electricity tariff) is likely to be achieved in under 5 years.
Install Battery Storage & Air Source Heat Pump in Your Home
Looking to reduce your energy bills and improve your home’s efficiency? We supply and install high-quality home battery storage systems alongside air source heat pumps, helping you take full control of your energy use.
Battery Storage FAQ’s
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Over recent years the UK has rapidly increased it’s renewable energy generation capacity. In the past year, renewable sources accounted for over 43% of the total UK electricity generation. However renewables can be intermitted, which means that there are times of day when there is more renewable energy being generated than is required by the nation. At these times, the classic Supply vs Demand equation dictates that electricity is cheap. Very cheap. In fact this can often cause the grid a big balancing problem, resulting in some wind farms being paid to stop generating. In 2025, the nation paid £1.5B in wind curtailment costs.
This is where batteries come in. By making capacity available to charge when cheap, zero carbon electricity is abundant, curtailment costs are avoid and this contributes to why electricity is so cheap at these times. Batteries take advantage of this intermittency, enabling homeowners to benefit from cheap electricity instead of wind farm operators being paid to switch off.
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The key to saving money with a battery is having consistent electricity usage. By virtue of the fact that heat pumps use electricity, all heat pump customers are by default classed as “high electricity users”. A battery storage system enables heat pump users to get the vast majority of their electricity at the cheapest rate – in Dave’s case 93% of this electricity will be obtained at the cheapest rate, whilst only 0.1% of his electricity will come from the peak rate.
And to put that into context, if your heat pump is running off of 14.5p/kWh electricity with a COP of 3.5, that means each unit of heat is costing around 4p. In contrast, a gas boiler with an efficiency of 85% will have a cost per unit of heat of around 8p. So with a battery leveraging off-peak electricity, a heat pump’s running cost will be half that of an efficient gas boiler.