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Would it make financial sense, and save me money, to buy a Tesla Powerwall even though I don’t currently have solar PV and instead to charge it overnight with cheap electricity?
You won’t need me to tell you that electricity prices are ridiculously high at the moment and unfortunately for the foreseeable future they’re probably only going in one direction. So if we hadn’t had to sacrifice most of our south-facing roof to make way for the dormer when we had our loft converted, I definitely would have had a solar PV system with battery storage fitted by now. But although I can’t do that at the moment, could I take advantage of the cheaper overnight electricity that we get via Octopus Go, and also charge a Tesla Powerwall overnight in order to take even more advantage of those cheaper night rates?
During the day I currently pay 25.87p per kWh for electricity whereas between half past midnight and half past 4 in the morning that plummets all the way down to just 5p.
This video isn’t sponsored by Octopus Energy, but if you’re interested in signing up for one of their intelligent tariffs with cheaper overnight electricity then I’ll also leave my referral link in the description which means you and I both get a little bonus if you start the process using that link.
Now that got me wondering whether it would make any sense to try and capture more of that cheaper energy overnight to use in the daytime. We already charge the car once or twice a week overnight and run things like the dishwasher and washing machine overnight as well as heat up our hot water via an electrical timer switch (and you can see my video about that via the link in the description) so in theory we could also charge up a battery storage system, like a Tesla Powerwall, when electricity is cheaper, and discharge that in the daytime for our home’s energy needs before needing to use the national grid again, effectively extending the cheap hours of my tariff and using electricity that only cost 5p per kWh to capture even though it’s being used in the daytime.
So I built a spreadsheet to allow me to work out the numbers in various scenarios and to easily plug in figures to see how future events might change the maths, as well – because of course there’s still a huge element of guesswork in all of this. So I started with my day rate and night rates in pence, then a simple “divide by a hundred” formula to get those in pounds. Next up I added in details of a few different battery options along with their cost and capacity in kWh, defined a named range for the battery names and used Data validation to create a dropdown list with that named range – rejecting any other input to that cell. In the rows underneath I added a VLOOKUP to get the cost and capacity figures based on the battery selected in the dropdown, then calculated the cost to fully charge the battery at the overnight rate. If you then do the same calculation but at your day rate and subtract one from the other, it’ll give you your daily saving, in pounds, achieved by using the battery to offset your daytime usage costs. If you take the cost of the battery and divide it by your daily savings it’ll give you the number of days that it’ll take the battery to pay for itself and then it was quicker to Google a conversion formula than work it out myself but here you are: just over 9 years for a Tesla Powerwall, at all of today’s prices, to pay for itself. That sounds like quite a long payback time but remember it starts “paying you back” with savings straight away so if you look at the projected annual savings as a percentage of the outlay cost that’s roughly the equivalent of putting your money in a savings account with a 10.4% interest rate which is phenomenal!
The great thing about a spreadsheet of course is that I can easily change some of the figures and see how that affects things. For example, I know that Octopus Go overnight pricing has recently increased to 7.5p due to the energy crisis, and when our current fixed period comes to an end we’ll probably be paying more overnight so let’s change the overnight price and you can see that yes, that does increase the break-even time as you’d expect – although not by a huge amount – 10 years 4 months. The price cap is currently predicted to rise by about 42% next time which would mean an eye-watering rate of nearly 37p per kWh during the day and even leaving the night rate at 7.5p that’s seen the break-even point slashed to just 6 years and 10 months.
What about a non-Tesla battery that’s much cheaper, but might not have as high a capacity? Well I can easily test out the payback times with those, too, by inputting their price and storage capacity in these cells over here, then selecting a different battery from the dropdown. As you can see, a cheaper battery isn’t necessarily better because if the capacity is much lower, the daily savings will be much lower too so not only will it take longer to pay itself off, it will be less useful every day as well.
So, as you can see there’s a decision to be made and there are so many factors in play that it’s impossible to know for sure what will happen but once the battery has paid for itself then assuming it still works and has most of its capacity still left, because that’s also when the warranty expires, I could be looking at saving well over a grand or even a grand and a half each year which would be very welcome and of course if I get solar PV fitted in the future then I can charge it for free and thus save even more money.
Plus there’s inflation to think about and the fact that a battery would be a one-off expense at the today’s value of the pound whereas even if the markets calm down there’s still the natural level of inflation, whatever that will be, so that could work in my favour even more if I do decide to get a battery fitted.
What would you do? Or what have you done? Is there a battery system I’ve not considered that I should do, or have I completely missed a trick and should I be thinking about something else? I’d love to hear your thoughts so please do let me know in the comments and if you pass the Like button en route to the comments, give it a click too.
Now, if you’re somebody who has a hot water tank then you can also think of that as a bit like a big battery which can be “charged” overnight when electricity is cheaper. If that’s you then you should watch this video next where I show how I save money every single day using my electric immersion heater instead of our gas boiler to heat our hot water.
⚡ Switch to Octopus Energy for cheap overnight electricity and split £100 with me!
Click 👉 https://share.octopus.energy/wheat-gnat-685