Quick answer
Most residential LiFePO4 battery systems pay back in 6–12 years, and the number is driven almost entirely by the gap between the price you pay for grid electricity and the price you receive for exporting solar. If that gap is large, payback can fall under six years. If exports are paid at close to retail rate, a battery is mostly a backup purchase, not an investment.
IMGThe only formula you need
Annual savings equal the kWh shifted multiplied by the value gap per kWh, minus round-trip losses and any standby consumption. Divide the installed cost by annual savings to get simple payback in years.
| Input | Example value | Where to find it |
|---|---|---|
| Usable battery capacity | 13.5 kWh | Datasheet, after depth of discharge |
| Cycles per year | 300 | Realistic daily cycling |
| Energy shifted per year | 4,050 kWh | Capacity × cycles |
| Retail import price | 0.30 / kWh | Utility tariff |
| Export price | 0.08 / kWh | Feed-in tariff |
| Value gap | 0.22 / kWh | Import minus export |
| Round-trip efficiency | 92% | Datasheet |
| Annual savings | ~820 | 4,050 × 0.22 × 0.92 |
At an installed cost of 6,000, that example pays back in about 7.3 years before any incentive. Add a 20% subsidy and the figure drops to roughly 5.8 years.
Where the model usually goes wrong
- Assuming 365 cycles. Real households cycle 250–320 times a year; winter produces less surplus.
- Ignoring standby draw. A hybrid inverter can consume 30–60 W continuously, which is 260–525 kWh a year.
- Using nameplate capacity. Usable kWh is typically 90–95% of nameplate.
- Assuming flat tariffs. Time-of-use pricing usually improves the case; flat pricing weakens it.
- Ignoring degradation. Year-ten savings are lower than year-one savings by 10–20%.
Non-financial value worth counting
Backup capability has a real but hard-to-quantify value: avoided food spoilage, avoided hotel costs during an outage, and continuity for home offices. Some households also value the ability to keep a medical device running. Assign a conservative annual figure and include it as a separate line rather than inflating the tariff assumptions.
Questions to ask before signing
- What is the guaranteed usable kWh at the point of connection, not at the cell?
- What round-trip efficiency is guaranteed at the C-rate the house actually uses?
- Does the warranty require a minimum annual cycle count, and what happens if the household cycles less?
- Is the inverter included in the price, and what is its replacement cost at year twelve?
- Are there time-of-use windows the system is programmed to exploit automatically?
Bottom line
Run the calculation with the household’s own tariff and interval data before choosing a capacity. LiFePO4 hardware with 6,000–10,000 cycles is no longer the limiting factor; the tariff structure is. Where the import-export gap is wide, storage is a sound investment. Where it is narrow, buy it for resilience and size it accordingly.