Return on Investment for Battery Storage System
If you’re thinking about installing renewable energy storage solutions like lithium-ion batteries, the return on investment (ROI) is a crucial concept to understand. Simply, the ROI is the amount of money that you can estimate to secure over the lifetime of your solar batteries compared with the initial cost of buying and installing the set-up.
In this article, we'll understand the concept of return on investment for battery storage systems, including the factors affecting it and how to calculate it. We will also provide a few additional tips to boost your ROI for battery storage so you can obtain more sustainable and affordable energy sources.
What is the Return on Investment in Solar Battery Storage?
The average ROI for solar panels is about 10%, but outcomes can vary in the United States. A fair ROI for solar panels ranges between 6% and 8%, but in rare cases, it can hit 20% or more.
A positive ROI refers to the lifetime of your energy solution, which is usually between 25 and 35 years. The amount of money you save on your energy bills or earn by selling the power will be greater than the initial investment cost. It averages about ten years to hit this criterion with the federal solar technology credit and nearly 13 years without it.
However, the results can depend on various factors, such as local incentives, location, system size, battery, and solar efficiency.
How to Calculate ROI for Battery Storage System?
Follow the step-by-step grid to calculate the ROI for battery storage systems.
Step 1: Sum up Your Upfront Costs
To get an authentic estimate of your solar energy system's cost, add up the total cost of equipment and the installation process, along with everything from solar panels to wiring, batteries, and inverters to labour, taxes, permit charges, and maintenance inspections.
Step 2: Factors in Tax Incentives/Credits
Multiple countries and states offer tax incentives or credits for people who install solar panels on their homes, like property tax abatements and cash rebates that notably decrease your costs. You should know whether your state offers such programs and then add them to your calculations.
Step 3: Determine Your Future Energy Savings
Your electricity rates depend on multiple variables, such as where you live, your energy consumption needs, and the size of your home. So, research average rates in your state and check your utility bills to get a clear insight into how much you're paying for electricity.
It would help if you also determined what you'll likely pay ahead by observing trends from past utility bills and factoring in estimated rate maximizes from electricity providers over time.
So, observe all these total savings over the lifetime of your energy storage solutions and sum up the outcomes.
Step 4: Use Formula to Calculate ROI
Once you estimate the upfront cost of installing your energy storage solution and determine the energy savings (such as ongoing incentives you may be eligible for), divide your net savings by your total upfront cost, then multiply the result by 100.
ROI= ((Total Savings – Total Cost)/total cost) 100
The answer depicts the estimated ROI of your resident's solar energy system expressed as a percentage. Let's say you spent $20k on your battery storage system, and it saves you $30k in energy bills over 25 years. Then, your ROI will be 50%.
How Battery Storage Systems Pay for Themselves?
Yes, battery storage systems can pay for themselves in multiple ways like;
- Reducing Money on Electricity Bills
Battery storage systems decrease electricity bills by an average of around $100 to $150 per month. Depending on your energy production and utility provider, you might be eligible to sell excess electricity back to the grid via a net metering program.
For instance, in the United Kingdom, the National Grid provides programs that compensate battery system owners for offering energy to the grid during peak demand. Businesses installing large-scale battery systems participate in such programs, earning revenue by minimizing their electricity use during high demands.
- Tax Credits or Incentives
Federal tax credits of 30% are available for solar photovoltaic systems installed between 2022 and 2032. However, it mainly depends on your location and state, as there can be extra tax credits or incentives. Further, in a few countries, people may be eligible for solar renewable energy certificate payments to produce their electricity.
- Increase your Home Value
According to a study, solar panels increase home values by up to 4.1%. So, battery storage solutions will not cost you a penny, even when selling your resistance.
Environmental Benefits and Long-term Value
Environmental effects also play a crucial role in the ROI of battery storage. Battery storage systems help promotes the deployment of renewable energy, minimizing the dependency on fossil fuels and reducing carbon emissions. These plans are committed to environmental sustainability at both residential and business levels, which can be vital for return on investment.
Choosing the Right Battery Storage System Technology
Choosing the right, high-quality battery storage system is highly efficient for boosting ROI. While there are multiple battery manufacturing brands in the market, Innotinum is well-known not only for offering the best battery storage technology but also for offering affordable prices upfront.
Innotinum offers cost-effective battery solutions while promoting longevity and efficiency. Furthermore, their maintenance costs are also lower than those of other manufacturers. So, they will decrease your initial cost investment and enable future energy savings to boost your ROI. In addition, their lithium-ion battery storage solutions are highly environmentally friendly as they do not leak any chemicals during usage. So contact them right now and place your order.
Bottom Line
In short, battery storage systems require significant investment, but compelling ROI through incentives, energy savings, grid independence, and opportunities to generate potential revenue makes them a great choice. As the world moves towards cleaner and more resilient energy solutions, battery storage has become a practical component of energy technology.
So, count all your upfront costs, including the lifespan of battery system technology, maintenance cost, durability, and energy need, to calculate the ROI for a battery storage system. Choosing the right supplier company is also effective for getting affordable but high-quality technology; Innotinum is best.