Your EV battery can do more than get you from A to B. If you have access to bidirectional charging, it can also buy electricity when it is cheap, hold it, and use or export it when prices rise. That is the core idea behind how to calculate EV energy arbitrage savings – and it is more practical than many drivers realise.
The catch is that headline savings can look better on paper than they do in real operation. Tariff design, charger limits, battery efficiency, driving needs and export rules all shape the result. If you want a number you can trust, you need a method that reflects how energy actually moves through the vehicle, the home and, where allowed, the grid.
How to calculate EV energy arbitrage savings step by step
At its simplest, arbitrage savings come from the gap between a low charging price and a high use or export price. You charge the EV during an off-peak window, then either discharge into the home during peak rates or export energy when the value is higher.
The basic formula is:
Savings per kWh discharged = value of discharged energy – cost of charging that energy
But for a usable result, you need to account for round-trip efficiency. Not every kilowatt-hour you buy ends up available for discharge. Some is lost in charging, inverter conversion, battery chemistry and discharge.
A more realistic formula is:
Savings per kWh delivered = discharge value – (off-peak import price / round-trip efficiency)
If your round-trip efficiency is 85%, and your off-peak power costs 20p/kWh, your effective input cost for each usable kWh delivered is about 23.5p/kWh. If that energy offsets a peak import rate of 40p/kWh, your gross arbitrage saving is 16.5p/kWh delivered.
That single adjustment is where many rough calculations go wrong.
Start with the tariff, not the battery
Most people begin by looking at battery size. In practice, the tariff does the heavy lifting. A large battery on a flat tariff may deliver little arbitrage value, while a smaller usable window on a sharp time-of-use tariff can produce meaningful savings.
You need four tariff inputs. The first is your off-peak import price – what you pay to charge the EV. The second is your peak import price – what you would otherwise pay during expensive hours if the EV did not discharge to the home. The third is any export payment if you plan to send energy back to the grid. The fourth is the duration and timing of those tariff windows, because not all cheap periods line up neatly with vehicle availability.
For many households, the highest value use case is not exporting at all. It is avoiding expensive evening imports by powering part of the home from the vehicle battery. Export can still matter, especially where dynamic pricing or flexibility schemes reward discharge, but self-consumption often gives the clearest baseline.
Work out your usable battery window
The full battery capacity is not the same as the energy available for arbitrage. You need to preserve enough charge for driving, and many systems also hold a reserve to protect battery state of charge.
Say your EV has a 60 kWh battery. You may decide that only 20 kWh is available for energy shifting on a typical day because you want to keep enough range for normal travel and unexpected trips. If the system uses an operating window between 30% and 65% state of charge, that practical window may be smaller again.
This is why real-world planning matters. The best arbitrage strategy is not the one that empties the battery most aggressively. It is the one that fits around mobility first and still captures price differences often enough to be worthwhile.
Apply efficiency and power limits
Once you know the usable energy window, apply round-trip efficiency. If 20 kWh is allocated for arbitrage and your system efficiency is 85%, only 17 kWh may be available as delivered energy.
Then check the charger’s power rating and the length of the tariff windows. A bidirectional charger limited to 6 kW cannot discharge 17 kWh in one hour. If your peak period is only two hours long, the practical maximum discharge may be 12 kWh, not 17 kWh. The battery may have more available, but the hardware and time window cap the result.
That matters because arbitrage is partly about energy volume and partly about timing precision. If prices spike for a short period, limited discharge power can leave value on the table.
A simple worked example
Let’s take a realistic household scenario.
An EV owner charges overnight at 18p/kWh. Their evening peak import rate is 38p/kWh. They use the EV to supply the home between 5pm and 8pm. The system round-trip efficiency is 85%. Their practical discharge window is 12 kWh per day.
First, calculate the effective cost of each delivered kWh:
18p / 0.85 = 21.2p per kWh delivered
Then calculate savings per delivered kWh:
38p – 21.2p = 16.8p per kWh
Now multiply by the discharge volume:
12 kWh x 16.8p = £2.02 per day
If this pattern holds for 20 days per month, that is about £40.40 per month, or roughly £485 per year.
That is the clean version. In reality, some days the car will be away, some days the battery window will be smaller, and some days household demand during peak hours will not fully absorb 12 kWh. But the method is sound, and it gives you a grounded starting point.
If you export to the grid, change the value side
If energy is exported instead of consumed at home, replace the peak import price with the export payment or dispatch value. For example, if you charge at 18p/kWh, your round-trip efficiency is 85%, and the export event pays 30p/kWh delivered, the gross arbitrage margin is:
30p – 21.2p = 8.8p per kWh delivered
That is still positive, but it is notably lower than offsetting a 38p/kWh household peak tariff. This is why participation models vary. In some cases, home discharge gives the stronger day-to-day saving; in others, grid export becomes attractive when event payments rise or when networks pay for support during constrained periods.
For fleet operators or advanced home energy users, the best answer is often a blended one. Some energy offsets household demand, and some is dispatched to the grid when external value exceeds internal value.
Don’t ignore battery cycling costs
This is where the conversation gets more nuanced. Every arbitrage cycle contributes some battery wear. The financial impact depends on battery chemistry, warranty terms, cycle depth, temperature, control strategy and how frequently you discharge.
There is no single universal pence-per-kWh degradation number that suits every EV. Still, if you want a conservative estimate, include a notional cycling cost in your model. If you assign, say, 4p per delivered kWh to battery wear, the earlier example changes from 16.8p gross savings per kWh to 12.8p net savings per kWh.
That may still be attractive, especially where the vehicle is already parked during peak periods and the system is optimised around modest daily cycling. But it is a reminder that savings should be measured, not assumed.
The factors that change your result most
If two EV owners compare notes, their arbitrage savings can differ sharply even with similar vehicles. Usually, the biggest reasons are tariff spread, vehicle availability, daily driving demand and whether the home has solar.
Solar can improve the picture or complicate it, depending on export rates and control logic. If daytime solar would otherwise be exported cheaply, storing it in the EV for later home use may produce higher value than simple tariff arbitrage. On the other hand, if your export tariff is already strong, charging from solar instead of exporting may not add much benefit unless evening rates are very high.
The same principle applies to dynamic tariffs. A fixed cheap-night and expensive-evening spread is easy to model. Dynamic pricing can create better opportunities, but it demands better forecasting and automation.
A practical monthly formula
If you want a fast planning model, use this:
Monthly savings = discharge days x delivered kWh per day x [value per delivered kWh – effective input cost per delivered kWh – battery cycling cost]
Using numbers from above:
20 days x 12 kWh x [38p – 21.2p – 4p] = 20 x 12 x 12.8p = £30.72 per month
That figure is more conservative than the gross estimate, and therefore more useful when assessing system payback.
For anyone evaluating V2G or V2H, that is the mindset worth keeping. Start with realistic availability, use delivered energy rather than nominal battery size, and test both gross and net outcomes. The strongest case for bidirectional charging is not built on optimistic maths. It is built on measurable savings, better resilience and a vehicle that works as part of a smarter energy system.
If you are serious about the numbers, model your own tariff and driving pattern before chasing a headline figure. The value of mobile energy storage comes from fit – the right charger, the right control strategy and the right use case at the right time.