Policy priorities for UK energy storage: a launch plan for residential energy storage by Simon Anderson

A launch plan for residential energy storage

The challenge with introducing home energy storage is not the technology – it is getting people to buy it. Two simple regulation changes could change all this. Both have precedents and are not subject to EU approval. The result would be to deliver significant consumer benefit, launch a vibrant cleantech market and open the potential for even greater supply-side benefits. The two incentives are as follows:

1. Introduce ‘Merton Two’

The Merton Rule was a ground-breaking planning policy, developed by Merton Council (London), which required new developments to generate at least ten per cent of their energy needs from on-site renewable energy equipment.

‘Merton Two’ would be to use this precedent to require new developments to incorporate meaningful in-home energy storage: for example, a minimum of 75% of the home’s expected daily electricity consumption. The purpose would be to make homes more affordable to run, to reduce supply-side challenges with peak loads, the use of solar and the growth in electric vehicles.

2. Stamp Duty

In parallel it is suggested that Stamp Duty be reduced by two per cent for homes fitted with a qualifying storage system. This could be made financially neutral by increasing Stamp Duty on non-qualifying homes by half a per cent.

Three levels of benefit would flow from such an initiative.

1. Consumers could see a reduction in their electricity bill of around one-third through running their home on off-peak electricity (hence the size of the energy storage system). If solar panels were also fitted this reduction could increase to two-thirds.

2. The energy industry would see immediate benefits in the reduced sizing of the local distribution infrastructure required for the new sites. In addition, it would significantly address issues derived from solar generation exports and open the potential for demand management once industry regulations and processes are sorted out. And all at no cost to the industry.

3. The government would be able to generate a lucrative element of the cleantech industry, increasing employment and investment. It would also make tangible progress against many of its higher level of objectives around reducing energy costs, implementing a smart grid, de-carbonising electricity and energy security.

For an idea of scale, if new homes were fitted with a 10kWh energy storage system, this would create 1GWh of demand resource for every 100,000 homes built or refurbished.

How would we persuade people to buy into this?

First the consumer proposition is like a hybrid car – reduced running costs, a better driving experience and no change needed to driving habits. These new homes would effectively be Hybrid Homes with reduced running costs, a better living experience and no need to change living habits.

Second is the simplicity of the solution. People would buy the Hybrid Home in the same way that they do any other home – and sell it in the same way too. In effect, the energy storage system becomes a fixture and fitting in the same way as the boiler is and the Stamp Duty incentive makes the total cost of ownership neutral compared to a non-hybrid home.

Residential energy storage: have your say

If you’d like to hear more about our ideas for promoting residential energy storage in the UK, or if you want to share your opinions with us, we’d love to hear from you. Get in touch either by popping your questions in the comments box below or by emailing us.