“Energy storage systems are worth considering primarily for households that use electric heating, such as heat pumps. In homes heated by a stove or gas, where electricity consumption is around 10 to 20 kWh per day, an energy storage system does not really make sense,” said Rando Simson, Member of the Management Board of Solar4you.
According to him, in recent years it has become increasingly clear that selling solar energy back to the grid is no longer particularly profitable for consumers. As a result, people are looking for new ways to use and store the energy they generate themselves. “In 2022, people earned significant amounts by selling electricity back to the grid, but since 2023 the situation has changed, and for many, selling electricity to the grid no longer makes financial sense. There are currently no signs of this trend reversing,” Simson added.
This is where energy storage systems, or batteries, come into play. During the day, the energy generated by solar panels is stored in batteries, while consumption is scheduled so that stored energy is used during hours when electricity prices are higher. This requires a smart energy solution that takes electricity market prices into account and allows batteries to be used when it is most economically beneficial.
Energy storage systems are mainly installed to cover self-consumption
“The main reason for installing an energy storage system in a household is to cover the household’s own electricity consumption. The fact that there may be surplus energy during part of the year that can be sold to the grid is more of a bonus,” the Solar4you expert noted. This requires a grid package that allows electricity to be sold back to the grid.
The first step in choosing an energy storage system is to review your energy consumption. In Estonia, this can be done, for example, through Elektrilevi’s self-service portal, where household consumption data is available. Particular attention should be paid to the more expensive electricity hours, such as six hours in the morning and six hours in the late afternoon and evening, when stored energy is most likely to be used.
“If it turns out that the household consumes an average of 20 to 40 kWh of energy during these periods, it would make sense to consider a battery of a similar capacity,” Simson explained. According to him, properly installed solar panels generate an average of 60 to 80 kWh of energy per day, which is enough to cover the household’s own consumption and fully charge the batteries.
Based on Solar4you’s experience, batteries with a capacity of 20 to 40 kWh are the most popular among households. Those who also want to trade electricity on the market generally choose batteries with a capacity of 60 kWh or more.
The best location is a warm indoor space
The next step is to choose a suitable location for the batteries. Many households have heated garages or utility rooms, which provide good conditions for installing energy storage systems because batteries require a stable indoor temperature of around 15°C.
“There are also energy storage systems designed for outdoor installation, but in that case it is important to choose the right device, one that has a heating system and is resistant to weather and dust. It should also be taken into account that an outdoor solution consumes more energy and may be more prone to malfunctions,” Simson explained. Based on their experience, he said that energy storage systems are still most commonly installed indoors.
Local authority requirements must be followed during installation
Local authority requirements must also be followed when installing an energy storage system. “An installation project must be prepared and a building notice submitted to the local authority on the basis of that project. Installation may only begin after it has been approved, and the energy storage system may be put into use once the relevant use permit has been issued. The household’s home insurance provider must also be notified about the installation of the storage system,” the Solar4you expert added.
According to the expert, one of the main mistakes associated with energy storage systems is incorrect installation. “Problems have occurred particularly with DIY installations. Many people are surprised to learn about both the temperature requirements and the need for proper documentation,” Simson said.
For example, there have been cases where people have completely discharged an outdoor energy storage system at minus 20°C and then been unable to recharge it because the outdoor temperature is too low. “In that case, there is nothing else to do but wait for warmer spring weather,” Simson added.
He also stressed that the requirements of the Estonian Rescue Board must be taken into account during installation. The Rescue Board closely monitors the installation of energy storage systems to ensure that all fire safety risks are properly mitigated.
Very cheap batteries may compromise safety
In general, energy storage systems do not require regular maintenance. “The rule here is that the more expensive the system, the better the solution tends to be. High-quality and reliable storage systems can be remotely monitored and controlled, which also makes them easier to supervise and maintain,” Simson said.
With cheaper solutions, battery balancing may be required. This means that if the battery’s charge levels begin to fluctuate, the battery cells need to be brought back into balance.
A good and reliable 40 kWh energy storage system costs around €14,000 including installation, while premium-class systems cost approximately €19,000. “It is certainly possible to find cheaper options. But if an offer seems extremely cheap and like a very good deal, you have to bear in mind that those savings are being made somewhere,” the Solar4you expert added.
According to him, there have been numerous cases where people have ordered batteries directly from China, but the batteries have not been designed to adequate technical safety standards. “We have opened and inspected different batteries ourselves and seen where savings have been made on insulation, cable connections and sensors. All of these risks are borne by the owner, and the insurer may also refuse to cover a claim in such cases,” Simson explained. He advises people not to install such devices themselves unless they have the necessary electrical qualifications. Properly installed systems generally come with a 10 to 15-year warranty, depending on the manufacturer.
As an energy storage system represents a significant investment for a household, it is worth assessing its actual necessity, expected payback period and impact on the household budget before making a purchase.
According to Hanno Ladvas, Head of the Estonian Business Unit at Inbank, an energy storage system is not an impulse purchase, but a practical, long-term investment. Both the cost of the equipment and installation and the impact of the larger expense on the monthly household budget should therefore be carefully considered. “If paying the full amount upfront is not reasonable or possible, various financing solutions can be considered, including instalment financing, which can help spread a larger one-off expense over a longer period,” Ladvas said.
According to him, Inbank’s latest survey also shows that people in Estonia mainly use instalment financing and consumer loans based on actual needs, often specifically for home-related investments. “Nearly half of the respondents cited the need to spread a larger one-off expense, which would otherwise be difficult to pay all at once, as the main reason for using instalment financing. One third of respondents said they consciously choose instalment financing to divide an expense into several payments and keep their monthly budget balanced,” Ladvas said, describing consumer behaviour. He added that for larger purchases related to the home and household equipment, people increasingly consider financing options already at the planning stage.
The payback period of an energy storage system is 5 to 7 years
According to the Solar4you expert, energy storage systems can be added both to new solar panel installations and to systems installed previously, although in some cases the inverter may need to be replaced.
The payback period of an energy storage system is generally around 5 to 7 years. As a rule of thumb, a conservative calculation can be based on approximately €5 per kWh. If the battery has a capacity of 40 kWh, the monthly financial savings could be approximately €200, or around €2,500 per year. A more optimistic calculation could use €10 per kWh as the basis.
Inbank’s Head of the Estonian Business Unit stressed that when deciding whether to invest in an energy storage system, it is important to consider the period over which the investment will pay for itself. “If the payback period of the system is around 5 to 7 years, this is a long-term decision, and its impact on the household budget should be assessed in the same way as any other major home investment. If the monthly payment remains at a reasonable level and the investment simultaneously helps reduce electricity costs, instalment financing can be one way to spread the cost over time so that investing in the home’s energy efficiency does not place an excessive burden on the monthly household budget,” Ladvas said.
