Do I need an energy storage system, and which one should I choose?

What is an energy storage system? Do I need an energy storage system? Which energy storage system should I choose? Is it worth investing in an energy storage system? What does its installation look like? We will attempt to answer all 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 a battery bank that allows you to store electrical energy to either consume it yourself at an appropriate time or sell it to the grid at a better price—more about specific purposes a bit further down. In very simple terms, if at a certain moment you do not need electrical energy, but it is available very cheaply or you are generating more than you need, you can store the excess electrical energy in a battery. Likewise, during times when electricity is expensive or when you cannot produce electricity yourself, you can use the stored electricity directly from the battery.

Energy storage systems/battery banks intended to maintain the electrical appliances of a household or business are comparable in size to other appliances found in the home. For example, a 14.2 kWh Thunor battery bank (and other similar battery banks) weighs about 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 bank, or how much electrical energy can be stored in the battery.

How much electrical energy is 14.2 kWh?

To provide some perspective, a modern 50-inch OLED television consumes about 70-80 W per hour, meaning a fully charged 14.2 kWh battery bank could keep such a TV running for just over a week continuously. Using similar logic, a full-size refrigerator can be kept running for 5-7 days. However, since households typically have more electricity consumers, it is wise to look at your daily electricity consumption to assess the energy reserve of the battery bank.

Some energy storage systems can be connected together into one system, multiplying the amount of energy that can be stored. For example, Thunor battery banks can be connected into one system with up to 16 units, allowing for a total storage of 227.2 kWh of electrical energy, which should meet the energy reserve needs of even the most demanding energy consumers.

When purchasing an energy storage system, it is also necessary to add an inverter to the system, which can convert the direct current produced by solar panels and stored in batteries into alternating current suitable for the household and also convert the electrical energy to the appropriate voltage. Additionally, the inverter allows for controlling which household consumers are under critical reserve, meaning which phase (electric line) of the house gets priority to take electricity from the battery when the power goes out and electricity is drawn from the battery.

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 areas, the risk of power outages is higher, primarily due to weather conditions. Severe weather can knock out substations or power lines, leaving households and businesses without electricity. Last winter, there were frequent situations like the December storm (ERR link), where up to 4,000 households in Saaremaa were without power for extended periods. By having an energy storage system with an inverter, you can ensure a continuous electricity supply in such scenarios—switching all critical consumers in the household or business (water pumps, refrigerator, critical lighting, servers) over to the battery bank and maintaining their operation.

• Energy storage as a critical component of an off-grid system. There are households and cottages that produce all their necessary electricity themselves and are not connected to the general power grid. Such solutions are also referred to as off-grid solutions. Off-grid solutions typically have a power station that generates electricity using solar or wind energy, or a generator powered by fuel. Sun and wind as natural resources are inherently very unstable—sunny days alternate with cloudy weather, and windy days are followed by calm ones. Additionally, during sunny or windy moments, the production is usually very high, leading to excess generation. Energy consumption, by contrast, is much more stable and predictable. By having an energy storage system in such a setup, you can store the excess electrical energy in the battery bank and continue your usual consumption patterns even when there is no sun or wind. Many inverters also allow the system to be connected to a generator.

• Energy storage as a cost optimizer. Households and businesses connected to the grid that monitor market prices can optimize their costs by consuming more during low-price hours and less during high-price hours. Unfortunately, most consumers cannot manage their consumption very flexibly. For instance, it is not feasible to turn off a refrigerator at certain hours or shut down production equipment. By having an energy storage system, you can continuously configure the system so that consumption and battery charging occur during low-price periods, while only consuming from the battery (or selling back to the grid, see below) during high-price periods. For such optimization, there are also automatic controllers available that help manage energy storage and consumption based on your set parameters. Depending on fluctuations in electricity prices and specific consumption patterns, the payback period for such a system is in the range of 7-10 years. You can also earn money with energy storage by scheduling the sale of your produced electricity and participating in the electricity Stability Market. In a situation where solar energy capacity has been rapidly growing in Estonia, electricity prices on sunny days are very low, sometimes close to zero, because all stations are supplying electricity simultaneously, resulting in high supply. By storing energy, it is possible to sell electricity to the grid during times when it is more expensive, thus improving the return on investment for your solar park. Additionally, by partnering with Thunor and having a specific controller, you can also participate in the electricity Stability Market, where the electricity market operator pays producers a premium when actual production and consumption volumes differ significantly from what was expected. Depending on fluctuations in electricity prices and specific consumption patterns, the payback period for such a system is in the range of 3-6 years.

Which energy storage system to choose?

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

Key parameters to consider:

• Capacity refers to the amount of energy the storage system can hold. It is usually measured in kWh (kilowatt-hours) or MWh (megawatt-hours). Capacity indicates how much electrical energy the battery can provide before the next charging cycle. Thunor currently offers batteries with a capacity of 14.2 kWh, which can be added to a single system with up to 16 units, resulting in a total capacity of 227.2 kWh.

• Power refers to how much power can be drawn from the battery at once or, in other words, how powerful the consumers can be supplied simultaneously from the battery. The Thunor 14.2 kWh battery allows for simultaneous consumption of up to 7 kW, and this power can be multiplied by adding more batteries to the system.

• State of Charge range (SOC) refers to the normal operational range, or how full or empty the battery can be charged to ensure normal functioning and the longest possible lifespan. The recommended operational range for Thunor batteries is 10%-95% state of charge, which is set during installation.

• Life Expectancy is measured either by the number of charge cycles the battery can perform or in years, which often already includes an assumption about the number of charge cycles. Thunor batteries allow for at least 6,000 charge cycles, where one charge cycle is a 100% charge to 0% discharge. With one charge cycle per day, the expected lifespan is 16.5 years. By the end of the expected lifespan, the battery capacity typically drops to around 80%, so reaching the end of its lifespan does not mean the battery needs to be taken for waste disposal; it simply has reduced capacity.

• Working Temperature refers to the range in which the battery can operate. Batteries generally do not tolerate very hot or cold conditions and are not suitable for outdoor storage in our climate. The typical temperature range is 10-30 degrees Celsius. Thunor batteries allow for stored energy to be maintained in a range from -30 degrees to 60 degrees Celsius and can consume or recharge stored energy in a temperature range from -10 to 50 degrees. Additionally, Thunor batteries have built-in heating mats that help regulate the internal temperature of the batteries.

• Scalability refers to the ability to expand the storage capacity within the same system, i.e., to add more batteries. As mentioned earlier, Thunor batteries allow for up to 16 storage units to be added to the same system, totaling 227.2 kWh.

• Technology used in the batteries. Different technologies have various pros and cons regarding lifespan, efficiency, and capacity. Accordingly, the above parameters can vary significantly among batteries with different technologies. The LiFePo4 (lithium iron phosphate) batteries used by Thunor are among the most modern battery technologies, with strengths compared to other systems including safety, long lifespan, energy stability, high power, good temperature tolerance, low maintenance needs, and environmental friendliness. This topic undoubtedly deserves a separate, more detailed discussion. It should also be noted that not all batteries sold on the market are assembled from high-quality, nominal capacity battery cells; some are sold (at a lower price) as battery banks composed of defective cells. Defective battery cells are often categorized as A- (minus), B-class, or ESS-level (Energy Storage) cells. Using defective battery cells can significantly reduce the battery's lifespan, capacity, and other parameters. At Thunor, we prioritize using only documented A-class defect-free battery cells (Certified Automotive Grade) in our batteries and have corresponding documentation for all battery cells. We also conduct capacity tests to verify this and provide the customer with the corresponding documentation with the battery. It is crucial to carefully check whether the weighted battery has the appropriate documentation!

Battery nominal voltage expresses the voltage at which the battery operates. Thunor batteries operate at low voltage, specifically 48V (compared to high-voltage batteries that operate at 300-800V). Low voltage has certain advantages over high voltage, and vice versa. Generally, the advantages of low-voltage batteries include:

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

2. Ease of installation - Operating at low voltage allows for the possibility of self-installation (although we always recommend using trained professionals).

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

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

5. Efficiency - Energy losses during charging and discharging are generally lower in smaller low-voltage systems.

In contrast, the advantages of high-voltage batteries over low-voltage batteries include:

1. Higher instantaneous power, making high-voltage batteries suitable for vehicles where high instantaneous power may be necessary (for example, for overtaking or accelerating).

2. Compactness - High-voltage batteries generally have a higher energy density, allowing for physically smaller batteries (especially less environmentally friendly NCM, or nickel-cobalt-manganese batteries). However, there has been a growing production of high-voltage LiFePo4 batteries that are as compact as modern low-voltage batteries.

3. Efficiency, especially in systems with very high consumption (general electrical grid storage systems, large factories with significant energy needs).

Safety features refer to additional functions that help ensure the safe operation of the battery, beyond the previously described nominal voltage. For example, Thunor batteries have built-in short-circuit protection to prevent battery damage, high-temperature protection (the battery shuts down), protection against undercharging, and a heating function for the battery cells to prevent damage. All of this allows Thunor to offer a 10-year warranty on its batteries with a 20-year expected lifespan.

Warranty refers to the manufacturer's responsibility for replacing a non-operational system.

Investment cost consists not only of the storage but also includes (a) the inverter that allows the storage system to be used, (b) sometimes charging controllers, if not built into the inverter, and (c) maintenance fees. When considering the investment cost, both the initial investment and the expected lifespan should be evaluated, more specifically:

• The investment (including the inverter and other necessary components) per kWh of storage capacity indicates how much needs to be paid as an initial investment to achieve 1 kWh of storage capacity. The following table provides an overview of the investment cost for Thunor (simplified).

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

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

The calculation is based on a battery cost of €5200, a hybrid inverter costing €3300 (including VAT), and for an off-grid solution, an inverter costing €1000. The number of charging cycles is 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 essential to determine profitability based on specific use cases.

• In situations where an energy storage system addresses energy reliability issues—ensuring that electricity is available during outages—the profitability must be assessed in terms of comfort and necessity arising from the loss of electricity. However, since there is no financial measure for how inconvenient, for example, the non-functioning of a water pump is, it is more challenging to evaluate profitability. The investment can be compared to a generator of equal power. The price range for similarly powerful generators starts at around €1000-2000, making them cheaper compared to batteries. However, the drawbacks include the noise generated and the need to constantly refuel the generator, which increases the operational costs and associated inconveniences.

• In scenarios where the energy storage system helps to balance 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 similarly to the previous use case, considering related losses, inconveniences, and alternatives like having a generator available.

• Optimizing costs with a battery—storing energy during cheap periods and consuming it during expensive times—allows for profitability assessments based on fluctuations in energy prices, but the precise personal profitability naturally depends on consumption patterns and prices. A very simplified example would be if the price difference between peak and off-peak hours is 10 cents when purchasing electricity from the market, the payback time for the battery + inverter investment is about 16 years for a system with 1 battery, 13 years for 2 batteries, and under 12 years for 3 batteries.

• If the system also allows for selling electricity back to the grid, the payback period decreases by about half, as you can sell electricity at high prices during peak hours. Thus, in the previous example, the payback period for a system with 1 battery would drop to 8 years, for 2 batteries to 6-7 years, and for 3 batteries to 6 years.

• If the system also participates in the Stability Market—monitoring specific energy demands in real time and allowing the system to supply or purchase electricity during significant demand and supply imbalances—the profitability improves further, reducing the payback period to about 3-4 years.

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

How to finance the purchase?

Since adding an energy storage system to an existing energy setup or building your own production facility (e.g., a solar park) is an expensive undertaking, there are several financing options available.

Kredex will soon reopen a support round for individuals to enhance their building's energy efficiency (news). Although a battery alone probably won't qualify for this (the exact conditions haven't been published yet), the energy storage system as part of the overall energy system is expected to be eligible for support (as it has been in previous rounds). Kredex has supported investments at a rate of 30% so far.

Thunor is a partner with LHV Green Installment for purchasing energy-efficient equipment (see also Thunor’s page and LHV’s page), under which LHV offers loans at an interest rate of 6.9% for the respective investments. A two-battery system with an inverter, including a smart controller and installation, with an estimated cost of €15,000—which also participates in the Stability Market and recoups its investment in about 3-6 years—would require a monthly payment of less than €300 over 5 years when using LHV’s installment plan.

Interested in what to do next?

If you would like additional consultation and to discuss your specific situation, please contact us at info@thunor.eu or through the contact form on our website. We can discuss your energy storage needs and, if necessary, visit the specific location to assess the installation's complexity and carry out the required preparatory work (such as creating an electrical scheme).

After confirming the order and paying the deposit, we will manufacture your batteries in Estonia and plan the installation within 30 days after order confirmation.

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

Get in touch! Our specialists will provide consultations and will gladly help you find the best solution for you.