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Choosing a commercial solar battery system

Solar batteries are an optional addition to a commercial solar installation that make an electrical system significantly more versatile.

By storing excess solar energy, businesses can reduce peak electricity costs, maintain an emergency power backup, and even earn money by providing grid flexibility services.

The right solar battery will pay for itself through reduced energy costs, but selecting the appropriate type, size, and configuration is essential.

This practical guide gives business owners everything they need to confidently choose the right commercial solar battery system.

Here’s what we cover:

• How commercial solar batteries work
• Applications of commercial solar batteries
• Types of commercial solar batteries
• Sizing a commercial solar battery system
• Commercial solar battery installation process
• Cost considerations for commercial solar batteries

How commercial solar batteries work

Solar batteries store excess electricity generated by solar panels, allowing businesses to use that energy when it is needed.

Rather than letting surplus solar power go to waste, a battery stores it as chemical energy during the charging process. Later, when required, this energy is converted back into electricity and fed into the local electrical system.

While we won’t delve into the chemistry of batteries, here’s a simplified overview of how battery charging and then discharging (releasing stored electricity) both work.

Over its lifetime, a commercial solar battery will complete thousands of charge and discharge cycles, helping to optimise energy use and reduce electricity bills.

Charging the battery

On a sunny day, when solar panels generate more electricity than is being used on-site, the surplus power is sent to a solar battery for storage.

This electrical energy triggers a chemical reaction inside the battery, which moves positively charged lithium particles (called lithium ions) between internal components. The energy remains stored, with minimal loss, until needed.

Discharging the battery

When your business requires power, the stored lithium ions reverse direction within the battery.

Their movement generates a flow of electrons in a single direction through an external circuit. This is called direct current (DC) electricity.

Current inversion

The direct current (DC) electricity the battery produces is sent to an inverter connected to the battery.

The inverter converts this DC electricity into stable alternating current (AC) power, which can be safely used as an alternative to electricity supplied by the local grid.

Applications of commercial solar batteries

In this section, we’ll summarise the various reasons businesses integrate commercial solar batteries into their electrical systems.

Maximising on-site solar self-consumption

On sunny days, commercial solar panels can generate more electricity than can be consumed directly on-site.

Sites without solar batteries must export this excess electricity straight back to the grid, using a Smart Export Guarantee tariff, which allows businesses to receive up to 15p/kWh from their business energy supplier.

A solar battery offers a better option: storing excess electricity until it is needed on-site. This is beneficial because it reduces the need to import electricity from the grid at a higher cost of over 20p/kWh.

Energy resilience

Power interruptions are rare in Britain but can be highly disruptive for organisations like hospitals or data centres.

These rely on diesel generators to provide backup power, but these can take up to 15 seconds to start during an outage.

A lithium-ion solar battery can bridge this gap by providing instantaneous backup power.

Off-grid energy systems

Commercial solar batteries play a crucial role in off-grid energy systems for businesses in rural areas, maximising the use of generated solar energy and reducing reliance on backup generators.

Off-grid systems avoid business electricity standing charges associated with maintaining a connection to the grid.

Time-of-use optimisation

Multi-rate business energy tariffs are common for large business energy customers and involve higher unit rates during defined peak periods, with lower off-peak rates outside these times.

A solar battery allows businesses to reduce the need to purchase electricity at peak business electricity prices by storing solar energy generated during off-peak times and using it during more expensive peak periods.

Demand charge reduction

Maximum demand charges are applied to energy-intensive properties with half-hourly business energy meters.

These charges are related to the highest level of energy consumption recorded during any billing period.

Using solar batteries during periods of high demand helps reduce a business’s maximum demand, which minimises capacity and excess demand charges.

Demand flexibility incentives

Businesses with solar batteries can participate in demand-side response services, offering temporary reductions in electricity demand when requested by the National Grid.

A solar battery enables a business to use stored energy to significantly reduce grid demand for short periods, helping to stabilise the system during peak pressure.

Find out more about how to earn additional revenue through demand-side response programmes in our guide to demand flexibility service for businesses.

Types of commercial solar batteries

Lithium-ion batteries are the most common type of commercial solar battery in Britain.

These batteries offer high efficiency (over 90% round-trip) and typically last between 10 and 15 years, making them the best choice for most commercial applications.

Older technologies, such as lead-acid batteries, and emerging technologies like flow and sodium-ion batteries, are not yet widely available.

Two main types of lithium-ion solar batteries are commonly used in commercial systems. Here’s a table outlining the features and performance of each.

Sizing a commercial solar battery system

Choosing the right size for a commercial solar battery is crucial to getting the most value from your investment. If it’s too large, you’ll pay for unused capacity; if it’s too small, you won’t be able to fully utilise the energy generated by your solar panels.

Solar batteries are typically modular, meaning they can be scaled to meet your business’s specific energy storage requirements.

In this section, we’ll explain the recommended battery size requirements for different use cases. But first, we’ll introduce some of the key terminology associated with battery sizing.

Terminology for battery sizing

There are two key factors to consider when discussing the size of commercial solar batteries:

• Usable battery capacity (kWh): The number of kilowatt-hours of electricity a battery can discharge from a fully charged state.
• Power rating (kW): The amount of power a battery can deliver at any given moment.

For example, a fully charged commercial solar battery with a capacity of 100 kWh and a power rating of 20 kW can deliver 20 kW of power for five hours (100 kWh ÷ 20 kW).

Both capacity and power rating are important when determining the appropriate battery size for different commercial scenarios.

Size required to support self-consumption of electricity

To ensure that electricity generated by solar panels on a sunny day can be used on-site rather than exported to the grid, the battery’s usable capacity should exceed:

This helps maximise on-site solar self-consumption and reduce reliance on grid-supplied electricity.

Size required to support backup power supply

To provide a backup power supply for a business, the battery’s usable capacity should exceed:

This ensures the battery can meet essential power needs during an outage until a generator takes over.

Size required to minimise peak electricity rates

To reduce reliance on peak-rate electricity from the grid, your solar battery should be large enough to supply power during peak periods. Its usable capacity should exceed:

This ensures your battery can cover peak demand when electricity prices are highest, helping to lower your overall energy costs.

Size required to minimise demand charges

To reduce maximum demand charges, the power rating of the battery, not just its capacity, should exceed:

This allows the battery to offset short-term spikes in electricity use, helping to lower costly demand-related charges.

Commercial solar battery installation process

This section explains how to add commercial solar batteries to an existing commercial solar panels system.

This guidance assumes that your business is already connected to the grid and has solar panels and inverters in place.

We recommend using a qualified solar installer with MCS certification, a quality assurance scheme, for the battery installation process. You can verify an installer’s credentials at mcscertified.com.

System design and equipment selection

The first key step is to assess your business’s energy storage requirements and plan how solar batteries can be integrated into the existing system.

A formal system assessment will consider:

• The intended use of the solar batteries.
• Whether the batteries can utilise existing inverters or require separate ones.
• The generation capacity and production profile of the solar panel.
• On-site business energy consumption and the daily demand profile.

Based on these factors, the assessment will recommend a specific type of solar battery and the number required.

DNO notification

DNO stands for Distribution Network Operator, the company responsible for managing the local electricity grid in your area.

Depending on the size of the system, its intended use, and whether you already have an approved commercial solar panel installation, solar batteries will either require approval or simply notification to the local DNO.

We recommend working with your solar battery installer to manage the DNO notification or approval process on your behalf.

Installation and integration

In most cases, commercial solar batteries are installed with their own inverter. This setup offers greater flexibility, as the battery can operate independently from the solar panels.

Commercial solar batteries are typically wall-mounted or floor-mounted. The battery inverter is usually installed next to the battery on the same wall or rack.

The inverter is then wired into the property’s main distribution board.

A communications link is also established between the battery and the property’s Energy Management System (EMS) to enable monitoring and control.

Commissioning and testing

An electrical engineer will inspect the battery storage system to ensure it is performing as expected during charge and discharge cycles.

An EMS engineer will then integrate the new batteries into the existing electrical system, creating dashboards to display key information such as the state of charge, discharge rate, and backup readiness of your solar batteries.

The EMS is configured to schedule and automate the behaviour of the solar battery system, including time-of-use automation and demand charge avoidance.

Maintenance and lifespan of commercial solar batteries

Commercial solar batteries are generally low maintenance and, with proper care, should have a lifespan of over a decade.

Most solar batteries come with a product warranty that guarantees usable capacity for a set number of years or charge cycles (whichever comes first).

To maintain the validity of the warranty, it is important to follow the manufacturer’s recommended maintenance schedule.

Annual servicing

A qualified technician carries out annual servicing of solar batteries and typically includes:

• Checking battery health and state of charge
• Inspecting connections, terminals, and cabling for signs of wear or corrosion
• Testing the inverter and communication systems
• Reviewing performance logs and identifying any error messages or inefficiencies
• Confirming the proper operation of cooling or ventilation systems

Environmental controls

Keeping a commercial solar battery in the right environment is essential for maximising its lifespan. Here are the key factors to consider:

• Maintain optimal temperature – High temperatures accelerate chemical degradation, while freezing temperatures reduce performance. Most lithium batteries perform best within a temperature range of 15°C to 30°C.
• Ensure adequate ventilation – Batteries generate heat during charging and discharging, which can lead to overheating. Indoor battery installations typically require mechanical ventilation or extraction fans.
• Control humidity – Excess moisture in the air can corrode the battery’s internal terminals. We recommend using dehumidifiers or moisture sensors for indoor installations where humidity may be an issue.

Cost considerations for commercial solar batteries

Commercial solar batteries require a significant upfront investment, which should deliver a positive return by reducing overall energy costs over time.

This section outlines the key cost considerations for commercial solar batteries.

Initial investment

The initial investment in commercial solar batteries includes the battery and inverter hardware, labour, and other costs associated with installation.

The cost of a solar battery typically scales with its storage capacity. Get the latest prices in our guide to commercial solar battery costs.

Cost savings and revenue generation

Installing a correctly sized commercial solar battery will maximise the return on investment from your initial equipment purchase.

A solar battery can reduce costs and generate revenue by:

• Allowing generated solar power to be used on-site, replacing expensive peak-rate electricity from the grid.
• Minimising demand charges by supplying power during periods of maximum demand.
• Earning income through participation in demand flexibility schemes.

See above, where we’ve explained how commercial solar batteries can help achieve these financial benefits.

Government incentives and rebates

Unfortunately, no UK-wide grants are currently available for businesses investing in commercial solar batteries.

However, the initial purchase of these batteries will likely qualify for an upfront Corporation Tax deduction through the Annual Investment Allowance (AIA) or the First Year Allowance (FYA).

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