Community Energy and Batteries: the Current Picture
Battery storage offers a possible solution to the intermittency of renewable energy. By storing solar, wind or other renewable power until the consumer needs it, batteries could help community energy projects reduce their grid dependence and boost long-term profitability. But batteries continue to have complex economic, environmental and practical considerations, meaning they still aren’t a go-to for most community energy groups.
Right now, batteries are the exception rather than the rule in community energy, but the case for them is building. Our Project Development Team explore some of the pros and cons, and what could happen in the next few years to increase their viability.
Balancing out the environmental impact
It’s an uncomfortable truth that batteries, while reducing dependence on fossil fuels, come at their own environmental cost. The extraction of minerals, combined with an energy-intensive manufacturing process, creates a significant environmental footprint before that battery begins to store any energy.
This means that once the battery has been produced, it then needs to work hard to pay off its environmental 'debt'. For batteries, 'work' means charge and discharge cycles, and the more cycles a battery completes over its lifetime the better its overall environmental impact becomes.
Electric vehicles illustrate that well. An EV has a much larger environmental footprint than a petrol or diesel car during manufacture, largely due to its battery. However, driving an electric car is much less polluting than a petrol or diesel car, even if the electricity comes from a fossil fuel power station. In most circumstances, over the vehicle's lifetime those pollution-free miles more than offset the initial manufacturing impact.
The principle is the same for any community energy group considering batteries – will the battery work hard enough to balance out its initial environmental impact? For example, a primary school’s solar panels might overproduce during the summer holidays, but not for the other 46 weeks of the year, leaving the battery idle. This must be decided on a case-by-case basis, and financial modelling can be complex for each site.
The economic case for storing electricity
No single use case can justify a battery on its own. It's very normal for battery revenues to be ‘stacked’, where multiple income streams are combined depending on the time of day or season. This allows a single battery to access whichever role is more profitable at the time. These are some of the scenarios where the economics can work:
Storing your own generation
Batteries can store excess generation for later use, which makes economic sense because export rates (the money earned by exporting excess electricity) are much lower than import rates (the money spent using imported electricity on site). In other words, a site can save more money by using stored electricity in the evening than it can by selling it back to the grid during the day. This creates a tempting case for organisations like schools trying to cut their electricity costs – but (similar to the environmental impact point) it only works if the battery can cycle often enough, which comes down to that site's usage patterns.
Trading on price
A related opportunity is price arbitrage. On market-rate tariffs, electricity prices vary every half hour, with particularly high prices often occurring during the evening demand peak when many people return home and cook dinner. A solar site can store generation in a battery during the day and export that electricity after 5pm, accessing significantly higher revenues than would otherwise be available. Standalone batteries can also participate by charging during low-price periods and exporting during high-price periods. At times of grid oversupply, import prices can even become negative, allowing batteries to be paid to charge. Delivering this effectively relies on accurate price forecasting and automated control systems that optimise charging and discharge schedules against market conditions.
Working around grid limits and peak moments
An alternative situation where it can make good financial sense is if the grid connection limits how much energy can be imported or exported. A solar park or wind farm might be capable of producing 2 MW but curtailed at 1 MW – they are producing more than the grid can accept at any one time. A battery turns curtailed generation into usable energy later in the day. A site with intermittent high energy usage may also be able to avoid a grid connection upgrade by using a battery to power equipment for short periods of time. A grid upgrade can be hugely expensive for the scale at which many community energy sites operate, while a battery can be comparatively cheap, especially if the peak requirements are short lived.
One increasingly common example where batteries can be used to operate very high-power equipment on a small grid connection is electric vehicle charging. An EV charger isn’t used all the time, but when it is it needs a lot of power quickly. Rather than paying for a grid upgrade to handle peak moments, a battery can store energy gradually and then deliver it in bursts when needed. This is often better value, especially when dealing with several Megawatts of potential demand.
Local resilience
Beyond the financial case, some people support community energy projects because they want to build local energy security. In locations where power cuts are frequent, backup facilities provide genuine value beyond simple financial calculations. Batteries contribute to this vision, creating more reliable energy systems.
However, this only applies to sites that use the energy directly. Larger wind and solar projects (typically in the rural areas) tend to sell their electricity to the grid because of the UK’s restrictions on local power supply. We may see this change in 2026 as changes to the regulations around the local supply of electricity come into effect.
Some projects have innovative approaches to using large volumes of electricity onsite. Dundee Renewable Energy Society operates an unusual ‘behind-the-meter’ arrangement with their high-consumption neighbour, the James Hutton Institute. This research institute can use almost all the power generated. In situations like this, batteries would genuinely enhance energy security.
Avoiding network upgrades
Energise South are a community energy group currently exploring a project using batteries on a housing estate to avoid network upgrades. The UK electricity network is currently creaking under the strain of increasing demand. EVs and heat pumps are more efficient than non-renewable options, but it still means a lot more electricity is required to replace the fossil fuels that are currently used. Adding batteries (especially near the edge of the grid) may allow network upgrades to be delayed or even avoided completely, saving large amounts of money and disruption by allowing peak demand to be met from local batteries. These can be charged during periods of low demand, or local renewable generation can be stored for use later on.
So how common are batteries in community energy?
Not many community energy groups are using batteries yet. Although costs are coming down, they currently remain rather expensive as an upfront cost and the incomes are uncertain. Groups may prioritise maximizing the renewable generation capacity, which often delivers better value for money.
Within the Energy4All family, there are a handful of examples: REPOWER Balcombe owns a solar installation on a school with an accompanying battery, and Edinburgh Community Solar Co-op owns three arrays with batteries. These have been funded with the help of grants or community benefit funds; batteries have historically been difficult to justify on their own in financial terms. While grant funding is likely to be needed in the short term (especially for back-up projects with minimal income) we hope to be able to install batteries in more sites in the future, as the incomes become clearer.
Currently battery storage represents only a small fraction of Energy4All work, but we expect this to change in the future as costs come down and it becomes more viable to balance out their initial costs. More broadly, storage will become more important as more renewables are added to the grid. The question is when the economics and environmental case will align to make them the obvious choice for community energy.