Home energy storage: is storing electricity at home right for you?

12 February 2021 | Aimee Tweedale

As A-ha once sang, the sun always shines on TV – but as we know all too well here in the UK, that’s not the case in real life! And if you’ve installed solar panels on your roof, you might have run into an all-too-common problem: during the sunniest times of day, you generate more power than you can use. Then, the clouds come over, and you can’t generate any at all. 

Usually, during those times where you can’t capture the sun’s rays, you have to rely on the National Grid. But that could mean using fossil fuels to power your home. It’s not a perfect system – after all, isn’t the whole point of generating your own electricity that you can be self-sufficient and sustainable?

Home solar panels in the countryside

That’s where home energy storage comes in. It captures the electricity you can’t use, and saves it for later. As well as being greener, smart home tech can increase the value of your property by an average of 14% – and even up to 38%!

Keep reading to find out everything under the sun about home energy storage systems: how they work, the pros and cons, and what you need to know before getting one. Still umming and ahhing about getting solar panels? Read our beginner’s guide to how solar panels work.

What is energy storage?

Just like the batteries in your phone or laptop, energy storage is a way of capturing electricity and saving it for later use.

This is important for the future of renewable energy, because it means we can store up the energy created during times of high winds or sunshine. And there are a few different ways of doing that – including giant electrochemical batteries, hydro storage (which stores energy by pumping water uphill), or thermal energy storage (which holds onto energy as heat). 

Energy storage systems are already beginning to play a role in renewable energy at grid level, and researchers are hard at work discovering new battery technologies as we speak. For more on this, read our full guide to battery energy storage and how it works.

But what about energy storage in the home? Batteries are becoming an increasingly popular way of storing the energy people generate at home from their own solar panels, or other renewable sources. For those on Economy 7 or Economy 10 tariffs, energy storage can also create a way to “buy” energy from the grid when it’s cheapest, and save it for use during peak hours. (By the way, customers with storage heaters or immersion heaters in their hot water tanks can already use thermal energy storage to make the most of low-carbon, off-peak electricity. Read our guide to storage heaters to find out more about how this works.)

Currently, there are fewer options for home energy storage, because – obviously – there’s a bit less space in your house than there is on a wind farm! Lithium-ion batteries are one option, and thermal energy storage is another. Find out more about the most common types of home energy storage below. 

Interested in staying warm without contributing to global warming? Find out more about low-carbon heating options for your home.

What are the key benefits of home energy storage?

Advantages of home energy storage

  • It’s efficient, which is great for the environment. The more of your own renewable electricity you’re able to store and use, the less electricity you’ll have to take from the grid. That’s a win for sustainability.
  • Lower electricity bills. Being less reliant on the National Grid also means lower bills, which is always cause for celebration!
  • Make your home smarter. Many batteries now offer an online portal that lets you track your home energy online, so you always know how much you have stored. Heat storage systems are also becoming smarter. Some storage heaters even use  weather forecasts to plan their days! Combined with a smart meter, you’ll always be in-the-know when it comes to how much electricity you’re generating, how much you’re using, and how much you can export to the National Grid. 
  • You can still make money from the electricity you don’t use. If you’re currently getting Feed-In Tariff (FiT) payments for exporting electricity from your renewable source to the grid, these may not be affected by your energy storage system. Applications for FiT payments closed in 2019, and replaced by the Smart Export Guarantee (SEG). Under this scheme, you could make the most of a flexible tariff to export your electricity when rates are highest. Read more about how this works and how your storage system could affect it further down this page.
  • You could get back-up electricity in a power cut. Some electric batteries can give you back-up power – but in the event of a power cut, not every home battery will be able to. This is because you’d need a lot of storage, and some complicated wiring. If you like the idea of  back-up power, chat to your installer to find out your options.

Disadvantages of home energy storage

  • The upfront costs are pretty high. Like any new, cutting-edge technology, renewable energy storage is fairly expensive right now – which means it’s not accessible for everyone. Prices are expected to drop much more in years to come, so it may make more sense to wait. 
  • You’ll have to find the space. Depending on the type of storage system you choose, be prepared to make some extra room in your house.

Home energy storage systems explained

Heat storage

There are 2 common kinds of energy storage system that store their power in the form of heat.

Thermal energy storage

If you already have a hot water tank, or cylinder next to your trusty boiler, you’ll be familiar with how thermal energy storage works. Like a hot water bottle, it holds on to energy in the form of hot water.

Heat batteries

Heat batteries are the new kid on the block when it comes to thermal energy storage. They store energy as something called “latent heat”. You can read more detail about how this works in our guide to thermal energy storage.

Because there’s less water involved, there’s also less risk of things like bacteria growing in a heat battery – and no risk of it leaking into the rest of your house. Heat batteries are also more efficient, and they take up a lot less space – typically, they’re about a third of the size of a hot water tank1.

Electrochemical batteries

Electric batteries for your home usually come in one of 2 forms: lead acid, or Lithium-ion. The latter is much more common. Lithium-ion batteries tend to be smaller and sleeker than Lead-acid batteries, as they can hold on to more energy in the same amount of space.

Lithium-ion is a limited resource, though – which makes these batteries fairly expensive. They also need to be disposed of carefully, or they can do more harm than good for the environment. Read more about how they work, in our complete guide to battery energy storage.

A family at home on the computer

Can home energy storage save you money?

As we mentioned earlier, home energy storage systems are still in their infancy, which means they’re pretty pricey. Whether a battery or thermal storage system could save you money and justify the upfront costs will depend on a few different factors – like:

  • The type of system you choose
  • The installation costs
  • How much electricity you typically generate, and how much you use
  • What electricity tariff you’re on
  • Your chosen system’s lifespan
  • Whether you receive FiT or SEG payments (more on this below!)

It’s important to put all of these puzzle pieces together when you’re considering getting a home energy storage system. Of course, it’s not always just a financial decision. You might be on a mission to live a zero carbon lifestyle, or perhaps you want to boost your home’s value in the long run.

FiT payments and battery energy storage 

If you’ve had solar panels, a roof-mounted wind turbine, or another renewable energy generator set up at home for some time, you might already be receiving FiT (Feed-In Tariff) payments.

This is a government scheme that pays you for the renewable electricity you generate and export back to the National Grid. 

The scheme stopped accepting new applications back in March 2019, so if you’re not already getting these payments,  skip to the next section of this article. 

If you are already receiving FiT payments, you might be wondering if a home energy storage system will affect them. Currently, FiT payments are made up of both a generation tariff (for the energy you generate) and an export tariff (for the energy you send back to the grid). The export tariff won’t be affected by your storage system, but your generation tariff could be. It all depends what kind of storage system you’re using. Check out this detailed guide from the Building Research Establishment for more information.

The Smart Export Guarantee and battery energy storage

The Feed-In Tariff scheme was replaced in 2019 by the Smart Export Guarantee. 

To get the SEG, you’ll need to have a smart meter. Unlike the FiT payments, SEG payments are based on exactly how much electricity you’ve exported back to the National Grid. Different energy suppliers offer their own rates to buy back your electricity. Here at OVO, it’s 4p per kilowatt hour.

Different suppliers have different rules about whether they’ll pay for electricity that you’ve generated and stored. If you’re an OVO member and you have a home energy storage system, you’ll need to send us extra information about the source of your energy

It’s best to check with your specific company to find out how a home storage system could affect your SEG.

Find out more about SEG payments and whether you qualify for them here.

Choosing a home energy storage system and installer

So you’ve taken in all the information above, and you’ve decided that your home needs its own energy storage. Congratulations! Now what?

Make sure you shop around, and get quotes from a few different installers before settling on one that you’re happy with. After all, home energy storage systems are no small investment, and they’ll be in your home for a long time. 

While you’re shopping around, ask the installers lots of questions, and do your research. Here are some key questions to think about:

  • What type of energy storage system do you want to use – heat or electricity?
  • What capacity do you want your storage system to have? (Or, how much energy do you need to store?)
  • How much will it cost to install, and how much will it cost to replace the battery or storage system if it breaks down?
  • Is the energy storage system you’ve chosen compatible with your renewable energy generation system?
  • Will it give you back-up electricity in a power cut, and is this important to you?

The future of home energy storage and EV charging

In the near-future, home energy storage won’t just make individual houses eco-friendly – it could also help support cleaner energy for whole communities. Kaluza, part of the OVO family, launched a new service in 2020 that gives a level of flexibility in home energy that’s never been seen before.

Kaluza helps members reduce their carbon footprints using smart tech. It syncs up vehicle-to-grid electric car chargers and home energy storage systems, so that members can import energy during off-peak times – when it’s cheapest and greenest. At the same time, they can also export any energy they don’t need back to the National Grid during times of high demand. This kind of give-and-take results in a greener grid for us all. 

Read more about how Kaluza is powering smart energy systems here.

Choose OVO Energy to power your sustainable home 

If you’re interested in cutting the carbon footprint of your home, consider switching to OVO to get:

  • 100% renewable electricity as standard2
  • A tree planted in your name for every year you’re with us
  • 3-5% Interest Rewards when your account is in credit 
  • Award-winning smart meter experience (USwitch 2020)
  • A £50 gift card every time you introduce a friend to us
  • Customer service rated “Excellent” on Trustpilot

Ready to save money and cut carbon emissions? Get a quote in less than 2 minutes via the link below.

Sources and references


2  The renewable electricity we sell is backed by renewable certificates (Renewable Energy Guarantee of Origin certificates (REGOs)). See here for details on REGO certificates and how these work.  

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