What are time of use tariffs and how do they impact businesses using battery storage?
Time of use tariffs are a type of electricity pricing plan where the cost of electricity varies at different times of the day. These tariffs are designed to encourage consumers to use electricity during off-peak hours when demand is lower, thereby reducing strain on the grid. For businesses, especially those using battery storage, understanding these tariffs can lead to significant cost savings.
By strategically charging batteries during off-peak periods and discharging them during peak times, businesses can take advantage of lower electricity rates. This not only helps in managing energy costs but also contributes to a more sustainable energy consumption pattern. As businesses increasingly focus on sustainability and cost-effectiveness, time of use tariffs combined with battery storage offer a promising solution.
Time of use tariffs typically feature three main periods: peak, off-peak, and sometimes shoulder periods. During peak times, electricity demand is high, leading to higher costs. Conversely, off-peak times have lower demand and thus, lower rates. Businesses with battery storage can store energy when prices are low and use it when prices increase, effectively reducing their overall energy expenditure.
Battery storage systems allow businesses to become more energy-independent and less susceptible to fluctuations in energy prices. By storing energy during cheaper periods, businesses can ensure a steady supply during peak times without incurring additional costs. This strategy not only helps in managing expenses but also reduces reliance on the grid during high-demand periods.
Moreover, the integration of battery storage with time of use tariffs supports the transition to renewable energy sources. As businesses can store excess renewable energy produced during off-peak times, they can maximise the use of cleaner energy alternatives. This not only enhances their sustainability credentials but also aligns with broader environmental goals, making it a win-win situation for businesses and the planet.
