Battery storage vs export tariffs: the calculation that actually matters

Almost every household considering solar in 2026 ends up at the same fork in the road: should I add a battery, or should I just export my surplus? The answer is presented in marketing literature as obvious — battery, of course, look at the savings — but the real calculation is more subtle, and there are plenty of UK households for whom the export-only answer is correct.

The simple version: a battery converts low-value export kWh (worth 5–10p) into high-value self-consumption kWh (worth 26–28p), at the cost of capital and a finite cycle life. An export-only setup keeps the capital in your pocket and accepts the lower per-kWh return. The right answer depends on three things — your tariff, your usage profile, and your patience — and they're worth taking seriously.

What follows is the calculation laid out without the marketing varnish, with the specific numbers for typical UK households in 2026, and the rules of thumb I'd actually use to decide.

The basic arithmetic

Strip the marketing away and the battery decision is a yield calculation. You have capital. You're choosing where to put it. The battery is one option, the alternatives include a bigger array, more insulation, or simply leaving the money in an interest-bearing account.

For a typical UK 4 kWp household generating 4,000 kWh/year, with no battery and no behaviour shift, self-consumption sits around 30%. So 1,200 kWh self-consumed, 2,800 exported. At 27p import and 8p export, your savings are £324 (self-consumption) + £224 (export) = £548/year.

Add a 5 kWh battery and self-consumption rises to roughly 60%. So 2,400 kWh self-consumed, 1,600 exported. £648 + £128 = £776/year. The battery is worth £228/year extra.

A 5 kWh battery costs £3,500–£4,500 retrofitted. Simple payback at £228/year is 15–20 years. The cycle warranty is typically 10 years or 6,000 cycles. The numbers don't work. This is the calculation that the marketing usually skips.

Where the calculation flips

The arithmetic above is for a flat-rate tariff. The numbers change dramatically on a time-of-use tariff with cheap overnight rates and expensive peak rates.

Same household, same battery, but now on a time-of-use tariff with overnight at 12p/kWh, peak at 32p/kWh, and a flat 8p export. The battery now does three things:

• Self-consumption from solar — same 1,200 kWh shift as before, worth more because peak rate is higher (£300/year)
• Overnight charging arbitrage — charge from grid at 12p, discharge at peak 32p, so 20p/kWh capture on every cycle. A 5 kWh battery cycled 280 times a year on top of solar work captures another £280/year
• Resilience and hedging against winter peak rates, harder to put a number on but real

Total uplift from the battery on a time-of-use tariff: £450–£600/year, taking payback to 6–9 years. That's a good investment.

This is the most important rule of thumb on the page: a battery on a flat-rate tariff is rarely worth it; a battery on a time-of-use tariff often is. The tariff is the variable that flips the answer.

When export-only is actually the right answer

There are real UK households for whom the export-only path is the correct one in 2026:

1. Households whose energy supplier offers a high export rate (15p+). Some specialist tariffs pay export at near-import rates for specific generation profiles. When the export rate approaches 50% of the import rate, the battery economics weaken considerably.
2. Households with low overall electricity consumption (under 2,500 kWh/year). If you're already generating more than you can ever use, the marginal kWh shifted by a battery isn't displacing import — it's displacing zero. The battery has nothing useful to do.
3. Households who prefer simpler systems with fewer moving parts. Honest answer: a battery has a 10-year warranty and a maintenance schedule. An export-only solar setup has a 25-year warranty and minimal maintenance. There is value in simplicity, even if it doesn't show up in the spreadsheet.
4. Households who plan to move within 5 years. Battery payback fundamentally requires long-term ownership. The capitalised value at sale is considerably less than the cost.
5. Households where the install location is constrained. Batteries want a cool, ventilated, indoor location with structural support. Outdoor enclosures exist but reduce cycle life. If your only option is the loft, the battery degrades faster.

Battery sizing — the mistakes worth avoiding

If the answer is yes-to-battery, sizing it correctly matters more than which manufacturer you choose. The two recurring mistakes:

Oversizing. A 15 kWh battery on a 4 kWp array doesn't have enough solar to fill it most days. The extra capacity doesn't earn its cost. Rule of thumb: battery capacity should be 0.8–1.5x your average daily evening consumption (typically around evening peak hours), capped at roughly 1x your daily average solar generation for the spring/autumn shoulder season.

Undersizing. A 2.5 kWh battery costs almost as much as a 5 kWh battery once you account for the BMS, inverter, and install — and earns half the savings. Below about 4 kWh, the per-kWh capital cost is unfavourable.

For the typical UK household generating 3,500–5,500 kWh/year and consuming 3,500–5,000 kWh/year, a 5–10 kWh battery is the right band. Above 6 kWp generation or with EV charging in the mix, push to 10–15 kWh. Below 3 kWp or under 2,500 kWh consumption, skip the battery.

Lifecycle and degradation: the numbers that matter

Lithium iron phosphate (LFP) chemistry has become the dominant home-battery format and is markedly better than the lithium-ion variants used five years ago. Typical specs from a reasonable 2026 LFP battery:

• ~6,000 cycles to 80% of original capacity
• ~10–15 year calendar life
• 95% round-trip efficiency typical, falling to ~92% by year 8
• Operating temperature 0–45°C, optimal 10–30°C
• Depth of discharge 90–95% usable

The honest figure: a 10 kWh nameplate battery delivers about 9.0–9.5 kWh usable on day one, falling to about 7.2–7.6 kWh by year 10. That's the real number to put in your payback calculation, not the nameplate.

One pattern worth knowing: cycle wear at high state-of-charge is worse than cycle wear at moderate state-of-charge. A battery that's allowed to spend most of its time at 50–70% rather than 90–100% will outlast its specced life. The clever scheduling strategies don't just optimise for revenue — they extend the asset.

Decision tree for 2026

Here's the decision tree I'd actually use:

1. Are you on a flat-rate electricity tariff? → If yes, and you have no plans to switch to time-of-use within 12 months, skip the battery. Take a high export rate.
2. Are you on or moving to a time-of-use tariff? → Continue.
3. Is your average annual consumption above 2,500 kWh? → If no, skip the battery, the maths doesn't work.
4. Do you plan to live in the property for 8+ years? → If no, skip or reconsider; the value capitalised at sale is much lower than installed cost.
5. Is your install location climate-stable (10–25°C most of the year)? → If no, factor in faster degradation.
6. Have you considered the alternative use of the capital? → A bigger PV array (if roof allows), full insulation upgrade, or simply earning interest are all competing for the same money.

If the answers are mostly green, install a 5–10 kWh battery, configure it for the tariff you're actually on, and expect 6–9 year payback. If the answers are mixed, stay on solar-only and revisit when the tariff landscape changes.

What I'd do in 2026

For an average UK household I'd talk through with friends, my recommendation in 2026 runs roughly:

• If you're on a time-of-use tariff or willing to move to one, install a 5–10 kWh LFP battery sized to your daily evening consumption, configured for overnight charging + solar self-consumption + peak discharge.
• If you're staying on a flat tariff, take the highest export rate you can find (currently the better SEG offerings sit around 12–15p for specific tariffs) and skip the battery.
• If you're cash-constrained, the higher-yield investment is almost always more PV rather than a battery for an existing array.

The marketing wants to sell you the battery. The arithmetic is more cautious. Both answers are valid for different households, and which one is right for you depends much more on your tariff and consumption profile than on which manufacturer's logo is on the unit.

One pattern I'd flag for households who genuinely want the battery for resilience rather than economics: be honest about that. A battery sized for grid-outage backup is a different specification than one sized for arbitrage. You want UPS-style automatic transfer switching, dedicated essential-loads circuits in the consumer unit, and a configuration that holds 30–40% reserve at all times rather than cycling to the bottom every night. That kind of install is more expensive (£1,500–£3,500 premium over a standard configuration) and the payback maths is worse, but if the goal is keeping the freezer running and the boiler firing through a 6-hour outage, the maths isn't the point. Be clear with yourself about which calculation you're actually running. The error is buying an arbitrage battery and being disappointed it doesn't do resilience well, or vice versa.

The battery-vs-export decision is genuinely a calculation, and the answer depends on numbers that the marketing tends to wave at rather than show. On a flat-rate tariff with a moderate export rate, the battery rarely pays back. On a time-of-use tariff with the right scheduling, it pays back well inside a decade. The variable is the tariff, not the equipment.

What I'd encourage anyone considering this to do is: model it both ways with their own numbers. Honest annual generation, honest self-consumption assumptions, current tariff, current export rate. The answer falls out of the spreadsheet, and it's specific to your household — which is exactly why generic marketing claims about 'massive savings' fail to land for so many of the people who buy them.