Octopus Energy Now Offering 20 Cents/kWh for Energy from Your Battery

If you are an Octopus Energy customer with a solar battery or plan to install one - here’s some good news for you. Octopus is now offering a never-before rate of 20 cents for every kWh of energy you pump into the grid. But does it make sense to switch to the retailer’s new plan? Even more importantly, does it make sense to buy a new battery for this? Let’s discuss.

What to Know About the OctopusPeaker Battery Plan

The terms “peaker” and “battery” are suggestive of what the plan hopes to do - it wants more people to use a battery and send energy from it into the grid during peak consumption hours. This will help Octopus to distribute its power generation profile more evenly by reducing the load on its generation systems during peak hours. It plans on doing this by using home batteries as local sources of energy.

Interestingly, the OctopusPeaker is New Zealand’s first time-of-export (TOE) plan, where users can get different buyback rates based on when they send energy back to Octopus. However, at My Solar Quotes, we think this could be the beginning of TOE buyback, with other retailers following suit.

Who Can Enrol in the OctopusPeaker?

Any Octopus customer who can send their excess energy into the grid can enrol in the OctopusPeaker plan. Even homeowners with a solar power system but no battery can choose the plan.

However, since the peak times are typically during hours of low solar power generation, the plan won’t save much with just a solar power system, and using a battery is the best way to maximise savings. Naturally, a home with a battery but no solar can also benefit from the plan.

Aside from this, homeowners with an EV that has vehicle-to-grid capability can also benefit from the plan, provided they have a bidirectional EV charger.

OctopusPeaker Buyback Rates

One of the limitations of the new plan is that its 20-cent pricing does not apply to all hours. Since it is designed to offset peak demand, the plan offers its 20 cents/kWh rate only during peak hours. The prices drop to ten and five cents for off-peak and nighttimes respectively. Here is a table that shows the pricing details for the plan for different times:

Here’s a graphical representation of the pricing offered by Octopus:

Image Credit: Octopus Energy

Should You Join the OctopusPeaker Battery Plan?

It all looks good on paper, but the real question is - will you see a notable difference in your electric bills once you join the new plan? Like all other things, there is no direct ‘yes’ or ‘no’ answer to this.

If you are contemplating switching to the new plan, there are a few things you have to consider. Firstly, the plan does not have a flat 20-cent rate, so you will have to ensure that you are able to export most of your stored energy in the peak hours. This means you have to shift your own peak hours consumption to non-peak hours, which may be difficult for some families.

Secondly, the plan can offer 20 cents for each unit of energy, but if you use your solar energy to offset your grid power consumption during peak hours, it can actually save you more per unit - around 30 cents per kWh. It simply makes more sense to buy less energy at 30 cents/kWh than send more energy at 20 cents/kWh.

Lastly,the OctopusPeaker plan would be worth trying only if you have an existing battery. Buying a new battery purely with the intention of saving money through the buyback program would be a financially unwise decision, considering the sizable price tags home batteries come with.

That said, you can still switch to the new plan and observe your electric bill for a few months. If it does not seem to generate any noteworthy savings and you think you were better off with your original plan, Octopus allows customers to switch back to the previous plan. However, you can only switch once a calendar year.

All-in-all, we think that several homeowners can benefit from the OctopusPeaker plan, and it is a welcome addition to New Zealand’s limited metering options. If you were thinking of adding solar panels and batteries to your home anyway, this plan may even offer the much-needed final push to do so.