Promising Results from SolarEdge Home Battery Initiative in the UK

SolarEdge Technologies, a company valued at approximately 6.75 billion USD, has published positive results from its innovative home battery program in the UK, launched last winter as part of the National Grid ESO Demand Flexibility Service (DFS). This initiative encouraged participants to decrease electricity consumption during peak periods by offering financial incentives.

Participants in this program, particularly those with SolarEdge home batteries, were not required to reduce their usage. Instead, they benefited financially by providing stored battery power back to the grid during peak hours.

Smart Metering Systems Plc (SMS), a key player in UK energy infrastructure, implemented SolarEdge’s advanced technology to automatically charge participants’ batteries ahead of each DFS event. This approach maximized the power exported to the grid without requiring homeowners to manage the process manually.

Financial insights reveal that SolarEdge has a strong balance sheet, with more cash than debt, and consistently demonstrates a high return on invested capital, indicating a solid financial outlook that might make it an attractive investment opportunity.

Participants using the battery scheme saw financial rewards that were up to ten times greater than those who manually reduced electricity usage. One battery owner received a peak reward of £25.60 within a single DFS event, while the average reward was £6.52. In comparison, those who manually cut back their energy consumption received roughly 90 pence per DFS event on average.

Throughout six DFS events, the highest total earnings for a battery owner reached £100.61. SMS projects that if the DFS service becomes available year-round, homeowners could potentially earn over £300 annually.

The batteries used in the program helped reduce grid demand significantly, outperforming manual reductions by UK homeowners. On average, battery participants exported 2.7 kWh to the grid per DFS event, while manual turn-down participants contributed less than 0.5 kWh.

Mark Hamilton, Managing Director of FlexiGrid at SMS, noted the advantages of automating the DFS, which could lead to increased homeowner involvement in future events and enhance grid stability through the use of home batteries.

Amit Larom, VP & Regional General Manager for Western Europe at SolarEdge, added that home batteries are beneficial for both homeowners and grid operators. They enable homeowners to save on energy costs by utilizing solar energy during high tariff periods. For grid operators, accessing community battery storage allows for better management of rising energy demand.

Additionally, projections indicate that SolarEdge’s net income is expected to rise this year, and the company has been profitable over the past twelve months. With a price-to-earnings (P/E) ratio of 22.16 and a price/earnings to growth (PEG) ratio of 0.23, SolarEdge may present a compelling investment opportunity.