Blog 13. 10. 2022 Written by: Eva Almašiová

Virtual or physical battery? Which works best with PV system?

The rising energy prices have boosted not only the interest in photovoltaic systems but also in solutions that help to utilize the green energy to the maximum extent. Because not always is the electricity consumption high enough to use all of the produced solar energy...

The most convenient way to make use of surplus solar energy is to store it and consume it later.

There are two options currently available on the market - virtual and physical batteries. What is the difference between them and what do they offer?

Virtual battery

It is a battery that does not physically exist. Your excess solar energy simply flows through your smart meter back to the power grid. The electricity supplier, as the entity providing the virtual battery service, monitors these flows using the smart meter’s online data and records it in its business systems. However, as soon as the electricity passes through the smart meter, the “stored” solar energy merges with the energy mix in the power grid and gets consumed by other consumers almost immediately. There is therefore only a billing record of the amount of stored electricity.

Sending the surplus electricity back to the grid in order to to store it in the virtual battery is usually free of charge. However, as soon as you want to use it, you pay all the distribution fees except for the electricity market price. Considering that these distribution fees make up to about 67% of the total price of electricity for households and 58% of the price for businesses, it's like buying your stored electricity at a 33% discount (in the case of households) or a 42% discount (in the case of businesses).

The electricity supplier, on the other hand, gets your electricity for free and charges you a monthly fee for the virtual battery service.

Virtual batteries have been supported by a strong media campaign thanks to which they are often the PV owners’ first choice. However, the electricity supplier may make more money on this service than the PV owners themselves. Especially today, when the price of the electricity is high, but suppliers still provide "cheap" electricity purchased in advance.

If you want to make more money on your surplus solar electricity without installing any other technologies, look around for solar buyback options which usually reflect the current electricity prices.

Physical battery

The physical battery is installed on-site, close to the electrical switchboard, and it usually stores the excess solar energy or the off-peak electricity. It is still quite expensive device so its payback period might be a bit unattractive. Although, with today's energy prices, this is certainly not the case anymore.

In order to see the major difference between virtual battery and physical battery, we use our smart battery storage brAIn by FUERGY as an example, as it offers more functionalities than a basic physical battery, more sophisticated green energy management and more attractive payback periods despite all the fees associated with its connection to the power grid and recycling at the end of its lifetime.

To learn more about our battery system, we recommend you to read our blog article "A guide to the high capacity smart battery storage brAIn by FUERGY".

But for now, let's see which battery offers more benefits:

*The national energy mix provides an overview of the share of each energy source in the total generated electricity. The Slovak energy mix can be found here.

To sum it up, the virtual battery is definitely the easier option, but it would only be worth a go if there was no other alternative available.

The advantages of physical battery storage brAIn are just visibly predominant. Especially when it comes to the most important factors such as financial savings. And even though installing physical storage may be a bit more time consuming, it certainly does not pose any problem. For a technology that pays for itself without you even knowing, it's simply worth the wait. Not to mention that you become more energy self-sufficient, environmentally friendly, and in a few years, when all the technology gets paid off, it becomes your net income.

Physical battery on lease

As the comparison shows, higher initial costs tend to be one of the barriers when considering buying the physical battery. Usually, the crucial one.

Luckily, there is an Energy as a Service model, or in other words, battery storage on lease, which effectively solves this problem. In addition to zero investment costs and a number of benefits associated with the operation of physical storage, you also get a share of the generated savings. The owner of the storage is the investor or other third party, entitled to the largest share of the savings. He either owns the storage for the entire approximately 15-year lifetime of the batteries or offers it to you for buy-back after a certain period of time.

Although the battery storage on lease is currently only available for businesses and larger delivery points, we believe we will soon extend this service also to households. Because every single energy customer deserves access to greener and cheaper electricity.

At FUERGY, we are creating a better future of energy. One in which every customer is an integral part, participates in improving processes, helps to save costs and unnecessary electricity waste, and for all that he is also properly rewarded.

Let's create it together.

We are living in the future of energy. Are you?

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