Operation and maintenance / Battery operation and lifecycle / Time-of-use battery arbitrage

O-014·Operation and maintenance / Battery operation and lifecycle

Time-of-use battery arbitrage

Charging cheap, discharging expensive and avoiding peak periods.

Time-of-use battery arbitrage means charging a home battery when imported electricity is cheaper and discharging it to supply the home when electricity is dearer. The headline price spread is not the saving. Energy is lost in the battery and inverter, cycling may consume part of the battery’s warranted life, and the battery can only shift energy within its capacity and power limits.

The same idea works with a fixed two-rate tariff, a tariff with several price periods or a dynamic tariff whose price changes every half-hour. The control method changes, but the test is the same: does the value of the energy displaced or exported exceed the full marginal cost of storing it?

Calculate the delivered cost, not just the spread

For 1 kWh delivered from the battery, the simplest calculation is:

delivered stored-energy cost = charging import rate / round-trip efficiency

If the battery’s measured round-trip efficiency is 90%, expressed as 0.90, it must absorb about 1.11kWh to return 1kWh. That is an engineering example, not a claim about every system. The appropriate efficiency is the measured or specified whole-system figure at the relevant operating conditions, not the efficiency of the cells alone.

For discharge that avoids household import:

net value per delivered kWh = avoided import rate - delivered stored-energy cost - cycling cost

For deliberate export, replace the avoided import rate with the export payment. Also include any import tax, tariff condition or service fee that changes with the transaction. A standing charge is normally not marginal because it is paid whether the battery cycles or not. It belongs in a tariff comparison only when choosing that tariff changes the standing charge.

Cycling cost is harder to pin down. A useful starting point is the battery and inverter cost attributable to cycling divided by their expected lifetime energy throughput. It is only an estimate because degradation depends on temperature, charge rate, depth of discharge, state of charge and time as well as energy throughput. The product warranty may impose a more immediate constraint than the theoretical cell life.

Use the meter boundary that appears on the bill

Battery apps often report energy at the inverter or battery terminals. The electricity bill records import and export at the supply meter. Those boundaries are not interchangeable.

A sound assessment uses half-hourly meter data and compares like with like. It should account for:

  • grid energy used to charge the battery
  • grid import avoided when the battery discharges
  • any export caused by battery discharge
  • solar export forgone because solar was stored instead
  • inverter standby consumption and conversion losses
  • changes in household demand between comparison periods

An app’s estimated saving can be useful for day-to-day control, but it should not be treated as bill evidence unless its tariff, losses and measurement boundary are known.

Capacity, power and the operating window

Usable capacity sets how much energy can be moved. Charge power determines whether that capacity can be filled during the cheap period. Discharge power determines how much of the expensive-period load can be covered at once.

The basic charge-time check is:

minimum charging time = energy to be added / available charging power

Available charging power may be lower than the inverter headline rating because of battery limits, temperature, state of charge, the electricity supply, another large load or a site import limit. The same principle applies on discharge. A large battery with modest output may cover a long low load but still import from the grid when several appliances run together.

Oversizing capacity does not create extra value once the battery already holds more than the home can use or export during the valuable period. Start with half-hourly consumption, decide which periods the battery is meant to cover, then allow for the reserve and losses.

Keep a reserve for uncertainty and backup

An arbitrage schedule should not assume that every stored kWh is available. A minimum state of charge may be needed for battery protection, power-cut backup or the next period of high demand.

Solar adds another decision. Filling the battery from the grid before a sunny day can leave no room for midday generation. Leaving it empty on a dull day can force expensive imports later. A practical controller therefore considers the next tariff periods, forecast household demand, forecast solar generation, the required reserve and the battery’s power limits.

Forecasts will sometimes be wrong. The schedule should fail safely and should not leave essential backup loads without the agreed reserve merely to chase a small price difference.

Fixed schedules and dynamic optimisation

A fixed-rate tariff can usually be managed with a recurring charge and discharge schedule. Check clock changes, tariff-window changes and whether the inverter uses local time or Coordinated Universal Time. Review the schedule after a tariff switch, firmware update or battery replacement.

A dynamic tariff needs prices to be imported and a new schedule calculated regularly. Automated control can compare every possible charge and discharge period, but it also introduces dependencies on an internet connection, an application programming interface, a cloud platform and correct forecasts. The safe fallback should be defined if any of those are unavailable.

Avoid control loops in which several devices react independently to the same grid measurement. A solar inverter, home battery, EV charger and energy-management platform can otherwise charge one store from another, oscillate around an import target or undo each other’s commands.

Import shifting is not the same as export trading

Discharging into household demand reduces import. Discharging beyond household demand exports electricity. The second use may change the grid-connection assessment, tariff eligibility, metering requirements and warranty position.

Battery storage connected in parallel with the public network is treated as generation for connection purposes. The installation must follow the applicable G98 or G99 route, include other generation at the property and comply with any agreed export limit. A tariff or app that offers export control does not replace the DNO’s connection requirements.

Supplier contracts can also distinguish between solar export, battery export and participation in a flexibility service. Before enabling deliberate grid export or third-party dispatch, check the current import contract, export contract, battery warranty and control-service terms for the exact installation.

Solar changes the opportunity cost

Solar charging is not free when the same energy could have been exported. Its opportunity cost is the export payment forgone, adjusted for the different energy boundary and losses.

The controller therefore has three broad choices for each available unit of solar energy:

  1. use it immediately in the home;
  2. store it to avoid a later import or make a permitted export; or
  3. export it immediately.

The best choice depends on the relevant rates, losses, reserve and capacity at that time. It cannot be decided from the import tariff alone.

Handover settings

The owner should be able to find the usable-capacity setting, charge and discharge limits, backup reserve, tariff schedule, export limit and method for overriding automated control. The handover should also identify which party can change the settings and what happens if its cloud service closes.

Review performance using a representative period rather than the single best day. A durable calculation shows the energy shifted, the rates that applied, losses, export effects and any assumed cycling cost separately. That makes it possible to update the arithmetic when a tariff changes without rewriting how the system works.

Applies to

Battery

Last reviewed

22 Jul 2026