How does energy storage reduce electricity costs?

Local energy storage systems (LESS) use lithium-ion batteries to store energy for later discharge to power systems within a residential property. The Li-ion battery set can be charged in one of two ways: either from energy generated from a solar PV installation or from the grid overnight (at low rate tariffs). The stored energy can then be used when there is a power outage and/or when electricity peak tariffs are highest. A local energy storage system can therefore be used to reduce electricity bills with the savings used to cover the cost of the system.

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How does energy storage reduce electricity costs?