Financial performance of integrated electric systems with time-of-use tariffs in British homes

Extended abstract 8-146-26

British homes are increasingly fitting new electrical systems like heat pumps, batteries and solar PV panels, while the electricity market is changing to prioritise when electricity is generated and used, with a growing range of time-of-use tariffs (TOUTs) offering different rates throughout the day. Current advice to householders focuses on bill savings from fitting a single technology. While it is reasonable to expect additional savings from combining technologies and optimising tariffs there has been no independent modelling of the potential benefits, hindering the promotion of home decarbonisation options. A half-hourly model was developed to assess a household’s electricity use, generation and heating load for every half-hour period in a year. This model was used to assess the financial performance and payback of home electrical systems individually, in combination, and with different TOUTs.

Findings:

• Heat pumps can deliver savings compared to gas boilers when paired with the right time-of-use TOUT.
• Solar PV consistently reduces energy costs and often offers a positive payback, which can be accelerated by selecting the best tariff.
• Batteries alone provide some savings when combined with TOUT but generally do not pay for themselves.
• PV plus battery is a common pairing that saves more than PV alone, with the battery saving an additional 10% compared to PV alone.
• PV plus heat pump increases self-consumption of any generated electricity, maximised by adding a battery to delivery optimal flexibility and maximise savings.
• While single technologies tend to have long payback periods, combinations supported by TOUTs shorten payback and make whole-home decarbonisation increasingly affordable for homes with sufficient space.
• Further work will explore EV charging integration, advanced battery control strategies, and time-of-use carbon factors to assess GHG reductions.
  

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