What is an energy storage system? Do I need an energy storage system? Which energy storage system should I choose? Is an energy storage system cost-effective? What does the installation of an energy storage system look like? We will try to answer all of these questions in the following post. So, let's start from the beginning.

 

What is an energy storage system?

An energy storage system, simply put, is like a power bank for electricity. It allows you to store electrical energy to use it at a suitable time or sell it to the grid at a better price - more specific purposes will be discussed below. In simpler terms, when you have surplus electricity that you don't need at a certain moment but it's either cheap to obtain or you're generating more than you need, you can store the excess electricity in a battery. Similarly, during times when electricity is expensive or you can't generate electricity yourself, you can use the stored electricity directly from the battery.

Energy storage systems or batteries designed for households or businesses have dimensions comparable to other devices found in a typical home. For example, a 14.2 kWh Thunori battery (and similar batteries) weighs around 130 kg and measures 45 cm wide, 70 cm long, and 25 cm high. The 14.2 kWh refers to the total capacity of the battery, i.e., how much electrical energy it can store.

How much is 14.2 kWh? To provide some perspective, a modern 50-inch OLED TV consumes about 70-80 watts per hour. With a fully charged 14.2 kWh battery, you could run such a TV continuously for a little over a week. Using a similar logic, you could keep a full-sized refrigerator running for 5-7 days. However, since households have multiple electricity-consuming devices, it's advisable to examine your daily electricity consumption to assess the energy storage needs.

Some energy storage systems can be connected together to increase the total energy capacity. For example, Thunori batteries can be connected in one system, allowing you to store a total of 227.2 kWh of electrical energy, which should meet the energy storage needs of even the most demanding users.

When purchasing an energy storage system, you also need to include an inverter in the system. The inverter can convert the direct current (DC) produced by solar panels and stored in the batteries into alternating current (AC) suitable for household use. It can also adjust the voltage to match the requirements of your electrical devices. Additionally, the inverter can control which circuits in your home are prioritized for power supply from the battery in case of a power outage.

 

Do I need an energy storage system?

An energy storage system serves various purposes:

• Energy Storage as a Solution for Unstable Energy Supply: In some regions, the risk of electricity outages is higher, primarily due to weather-related factors. Severe weather conditions can disrupt substations or power lines, leaving households and businesses without electricity. For instance, during the past winter, situations like the December storm (ERR link) left up to 4,000 households in Saaremaa without power for an extended period. By having an energy storage system with an inverter, you can ensure a continuous power supply in such scenarios. Critical appliances in your home or business (such as water pumps, refrigerators, essential lighting, and servers) can be switched to the battery, allowing you to maintain their operation.
• Energy Storage as a Critical Component of Off-Grid Systems: Some homes and cottages generate their own electricity and have no connection to the public grid. These solutions are often referred to as off-grid solutions. Off-grid setups typically involve power generation from sources like solar panels, wind turbines, or fuel-powered generators. Solar and wind resources are inherently unpredictable – sunny days alternate with cloudy ones, and windy days follow calm ones. Additionally, energy production during sunny or windy periods can be excessive. By having an energy storage system in such a setup, you can store excess electricity in the battery and continue your normal consumption even when there's no sun or wind. Many inverters also allow you to integrate a generator into the system.

• Energy Storage as a Cost Optimizer: Homes and businesses connected to the grid that monitor electricity market prices can optimize their costs by consuming more during low-price hours and less during high-price hours. Unfortunately, most consumers cannot flexibly manage their electricity consumption. It's not feasible to, for example, turn off the refrigerator at specific times or shut down production equipment. Having an energy storage system allows you to continuously adjust your system so that consumption and battery charging occur during low-cost periods, while consumption solely relies on the battery during high-cost periods (or even selling excess energy back to the grid, see below). For such optimization, there are automatic controllers available that help manage energy storage and consumption based on user-defined parameters. Depending on fluctuating electricity prices and specific consumption patterns, the payback period for such a system is roughly 7-10 years
• Earning Money with Energy Storage: With strategic timing of selling self-generated electricity and participating in the Electricity Stability Market, you can make money with an energy storage system. In a context where solar energy capacity has rapidly increased in Estonia, electricity prices are very low on sunny days, sometimes even close to zero, as all power stations simultaneously offer electricity, resulting in oversupply. By storing energy, you can sell electricity to the grid during times when electricity prices are higher, thereby improving the return on your solar panel investment. Additionally, in partnership with Thunor and by having a specific controller, you can participate in the Electricity Stability Market, where the electricity market operator rewards producers when actual production and consumption volumes significantly differ from expectations. Depending on fluctuating electricity prices and specific consumption patterns, the payback period for such a system is roughly 3-6 years.

What type of energy storage system to choose?

Energy storage systems are offered with various features, qualities, and prices. Below are the key parameters that may be important to you, along with some simple formulas to evaluate your investment.

Key parameters to watch for:

Capacity refers to the amount of energy an energy storage system can hold. It is typically measured in kilowatt-hours (kWh) or megawatt-hours (MWh). Capacity indicates how much electrical energy the battery can deliver before needing to be recharged. Thunor currently offers 14.2 kWh batteries, and you can add up to 16 of them to create a total capacity of 227.2 kWh.

Power represents the amount of energy that can be drawn from the battery at once, or in other words, how powerful the devices connected to the battery can be. Thunor's 14.2 kWh battery allows simultaneous consumption of up to 7 kW from the battery, and adding more batteries to the system can multiply this power.

State of Charge Range (SOC) refers to the normal operating range within which the battery should be charged and discharged to ensure its proper functioning and maximize its lifespan. Thunor's recommended operating range is from 10% to 95% state of charge, which is configured during the battery installation.

Battery Life Expectancy can be measured in terms of the number of charging cycles the battery can endure or in years, often including an assumption about the number of charging cycles. Thunor batteries can handle more than 6,000 charging cycles, where one charging cycle involves charging the battery to 100% and discharging it to 0%. If you perform one charging cycle daily, the expected lifespan is about 16.5 years. When the expected lifespan is reached, the battery's capacity decreases to approximately 80%, but this doesn't mean the battery needs to be discarded; it simply has a reduced capacity.

Working Temperature Range indicates the range within which the battery can operate. Generally, batteries are not very tolerant of extreme heat or cold and are not suitable for outdoor use in our climate. The typical temperature range is 10-30 degrees Celsius. Thunor batteries, however, can store energy in a range from -30 degrees to 60 degrees Celsius and can be charged in temperatures from -10 to 50 degrees Celsius. Additionally, Thunor batteries come with built-in heating mats to maintain them within the correct temperature range.

Scalability refers to the ability to expand the storage capacity within the same system, i.e., adding more batteries. As mentioned earlier, Thunor batteries allow you to add up to 16 units in the same system, reaching a total capacity of 227.2 kWh.

Technology used in the batteries. Different technologies have various advantages and disadvantages in terms of lifespan, efficiency, and capacity. Therefore, the aforementioned parameters can vary significantly depending on the battery technology. Thunor uses LiFePo4, or lithium iron phosphate cells, which is one of the most modern battery technologies. Its strengths compared to other systems include safety, long lifespan, energy stability, high power output, good temperature tolerance, low maintenance requirements, and environmental friendliness. It's worth noting that not all batteries on the market are of equal quality especially when it comes to the usage of lower-quality cells; often referred to as A- (minus), ESS-grade or B-grade cells. These cells are cheaper to use because they have more or less defects that carry an impact on the overall life expectancy and capacity of the cells and the battery, ultimately. Thunor emphasizes the use of documented A-grade cells (Certified Automotive Grade cells) in its batteries. Capacity tests are also conducted to verify this, and the corresponding documentation is provided to the customer with the battery. Be weary of batteries sold without documentation on the cells grade / quality.

Battery nominal voltage (voltage) represents the operating voltage of the battery. Thunor batteries operate at low voltage, specifically at 48V (compared to high-voltage batteries at 300-800V). Low voltage offers certain advantages over high-voltage batteries, and vice versa. Generally, the benefits of low-voltage batteries include:

1. Safety: Due to the lower voltage, the risk of electric shocks and fires is very low. Therefore, low-voltage batteries are highly suitable for households, especially those with young children and pets.

2. Ease of Installation: Operating at low voltage allows for self-installation of the battery (although it is always recommended to use trained professionals).

3. Compatibility: Low-voltage batteries are more easily compatible with various devices (such as inverters) compared to high-voltage batteries, where specific batteries may only work with certain inverters, increasing the overall system cost and maintenance expenses.

4. Scalability: Low-voltage batteries can be added to the system flexibly.

5. Efficiency: Low-voltage batteries typically have lower energy losses during charging and discharging, especially in smaller systems.

In comparison, high-voltage batteries have advantages over low-voltage batteries, such as:

1. Higher Instantaneous Power: High-voltage batteries can provide higher instantaneous power, making them suitable for applications like electric vehicles, where rapid acceleration or passing may be necessary.

2. Compactness: Some high-voltage batteries generally have higher energy density, allowing for physically smaller batteries (e.g. NCM batteries). Some newer high-voltage batteries though are of similar compactness as these also utilise LFP cells.

3. Efficiency, especially in very high-consumption systems (large-scale grid storage systems, large factories with high energy demands).

Safety Features: Additional functions, beyond nominal voltage, help ensure the safe operation of the battery. Thunor batteries, for instance, include built-in safeguards like short-circuit protection to prevent battery damage, high-temperature protection (the battery shuts down), protection against too low charging, and internal heating to protect the cells from damage. All of these features allow Thunor to offer a 10-year warranty on its batteries with an expected lifespan of 20 years.

Warranty: The manufacturer's responsibility to replace a non-working system.

Investment Cost: This includes not only the cost of the storage but also (a) the inverter that enables the use of the storage, (b) sometimes charging controllers if not integrated into the inverter, and (c) maintenance fees. When assessing the investment cost, both the initial investment and the expected lifespan should be considered. Specifically:

• Investment (including the inverter and other necessary components) per kWh of storage capacity, i.e., how much you need to pay as an initial investment to achieve 1 kWh of storage capacity. Thunor's investment cost provides an overview in the following table (simplified)

 

	1 battery	2 batteries	3 batteries	4 batteries	5 batteries
Off-grid	437€	401€	390€	384€	380€
Hybrid	599€	482€	444€	424€	413€

The calculation is based on a battery cost of €5200, a hybrid inverter cost of €3300 (including VAT), and for off-grid solutions, an inverter cost of €1000. Formula: Investment / Capacity.

 

• Investment per 1 kWh of charging cycle, or how much it costs to store 1 kWh in the battery over the entire expected lifespan. The following table (simplified) provides an overview of Thunor's investment cost.

 

	1 battery	2 batteries	3 batteries	4 batteries	5 batteries
Off-grid	7,3c	6,7c	6,5c	6,4c	6,3c
Hybrid	10c	8c	7,4c	7,1c	6,9c

The calculation is based on a battery cost of €5200, a hybrid inverter cost of €3300 (including VAT), and for off-grid solutions, an inverter cost of €1000. Number of charging cycles: 6000. Formula: Investment / Capacity / Cycle Count.

 

Is It Worth Investing in an Energy Storage System?

When discussing the profitability of an energy storage system, it is crucial to determine the profitability based on a specific use case.

In a scenario where the energy storage system solves the problem of energy reliability, ensuring that electricity is still available during outages, profitability must be assessed depending on the comfort and necessity that electricity loss causes. However, as there is no conventional monetary measure to assess the inconvenience, for example, of a water pump not working, evaluating profitability becomes more complex. The investment cost can be compared to that of a generator with similar capacity. The price range for generators of the same capacity starts from around €1000-€2000, making them more cost-effective compared to batteries. However, the issue with generators lies in the noise they generate and the constant need to refuel, which increases the maintenance costs and associated inconvenience.

In a scenario where the energy storage system helps smooth out production and consumption patterns, storing excess energy for use during non-production periods (e.g., using solar energy produced during the day at night), profitability should be compared to the losses, inconveniences, and alternatives like having a generator.

Optimizing costs with a battery, i.e., storing energy at low-cost times and consuming from the battery during high-cost times, allows profitability to be assessed based on energy price fluctuations. However, the exact personal profitability depends on consumption patterns and prices. As a very simplified example, in a case where, with uniform consumption, there is a 10-cent difference between the highest and lowest price hours when buying electricity from the market, the payback period for the investment in an inverter + battery system would be about 16 years (with 1 battery system), 13 years (with 2 batteries), and less than 12 years (with 3 batteries).

If the system also allows selling excess energy to the grid, the payback period roughly halves because now you can sell electricity to the grid during high-price hours. Thus, in the example above, the payback period would be reduced to 8 years (with 1 battery system), 6-7 years (with 2 batteries), and 6 years (with 3 batteries).

If the system participates in the Stability Market, which means it monitors the specific energy demand on the electricity market minute by minute and allows the system to supply or purchase additional electricity in situations of significant supply and demand imbalances, the profitability improves by approximately 2 times, reducing the payback period to 3-4 years.

Profitability calculations deserve a separate chapter, so we will cover this in upcoming blog posts. In summary, profitability depends significantly on the purpose of the energy storage system and the existing alternatives for solving the same problem.

 

How to Finance Your Purchase? (Estonia-specific)

As adding an energy storage system to an existing energy setup or constructing your own power generation facility (e.g., a solar park) can be a costly undertaking, there are several financing options available.

Kredex is soon reopening a support program for individuals to enhance the energy efficiency of their buildings (news link). While the battery itself likely won't qualify under these conditions (exact terms have not been disclosed yet), an energy storage system as part of the overall energy setup is expected to be eligible for support (as in previous rounds). Kredex has historically supported investments up to 30%.

Thunor is a partner with LHV Green Installment when it comes to purchasing energy-efficient equipment (also check Thunor's website and LHV's website). Through this partnership, LHV offers a loan with an interest rate of 6.9% for relevant investments. For example, a system with two batteries, an inverter, a smart controller, and installation, with an estimated cost of €15,000, which also participates in the Stability Market and pays for itself in approximately 3-6 years, would result in monthly payments of less than €300 over a 5-year period when using LHV's installment plan

 

Interested in What's Next?

If you're interested in further consultation and discussing your specific situation, please contact us at info@thunor.eu or through the website's contact form. We'll discuss your energy storage needs, and if necessary, we can visit your specific location to assess the installation complexity and perform any necessary preparatory work (such as creating an electrical diagram).

After confirming your order and making an advance payment, we'll produce your batteries in Estonia and plan the installation within 30 days of order confirmation.

On the agreed-upon installation day, our team will bring the battery and other necessary electrical equipment to the installation location and carry out the agreed-upon work, including any required work on the electrical system. The battery will start operating immediately after installation.

Feel free to reach out! Our specialists are happy to advise and discuss the best solution for you.