Most people still consider an electric car and a household battery as two completely separate purchases. One sits on the drive and provides transport, while the other sits on the wall or in the garage and reduces the household electricity bill. However, once both are connected to a smart meter and a cheap overnight electricity tariff, they become parts of the same home energy system.
The starting point is the large difference between daytime and overnight electricity prices. Many households have schemes from suppliers like Octopus that charge 29p per kWh during the day, but only 9p per kWh overnight, creating a significant arbitrage opportunity.
An EV charged overnight at home only costs 2p per mile to run, compared with around 17p per mile for a petrol car. At 10,000 miles a year, that represents an energy saving of approximately £1,500 a year, and if the EV is also leased through Salary Sacrifice, the employee will save between 36% and 50% on the effective lease cost, depending on salary, tax position and how much of its National Insurance and VAT saving the employer returns. This makes it an extremely cost-effective route to unlock this fuel saving whilst delivering a new or nearly new EV to drive.
As the previous CheapEV blogs have shown, a higher-rate taxpayer taking a three-year-old electric Vauxhall Corsa through Salary Sacrifice could potentially save around £9,000 over five years compared with buying and operating the equivalent petrol Corsa. That saving alone could pay for the purchase and installation of a 20kWh household battery.
The household battery then creates a second layer of savings. Instead of buying electricity at 29p during the day, the homeowner charges the battery overnight at perhaps 9p and uses that stored electricity during the expensive period. If a 20kWh battery regularly shifts 15–20kWh of electricity a day, it could deliver a saving of £1,500, and because the capital cost has already been covered, this could deliver a massive £30k to the household bottom line over its expected 20-year life.
The EV therefore helps pay for the household battery in two ways. First, switching from petrol to cheap overnight electricity releases money that would previously have disappeared at the filling station. Secondly, having an EV makes it easier to justify moving the entire household onto a smart overnight tariff, allowing the same low-cost electricity to charge both the car and the battery. Having your home EV charger and a household battery installed at the same time can also effectively halve the normal installation cost because both are being installed by the same people at the same time.
So, when you’ve decided to switch at least one of your household cars, it’s time to also look at installing a battery via Household Energy Solution, which is why I founded both businesses.
Your EV may not literally write the cheque for your household battery, but the savings it creates could go a long way towards paying for it.