Do cheaper solar batteries sound good to you? You’ll probably like steadfast solar supporter Dr. Helen Haines’ new draft legislation, introduced yesterday.
There’s a lot of interest in home batteries in Australia – SolarQuotes’ solar battery comparison table is one of the more popular pages on this web site. But many Australians would be in for a dose of sticker shock when they see estimated pricing. Like solar panels were some years ago, batteries are a currently a big investment.
Independent Federal Member for Indi1 Helen Haines yesterday tabled new legislation that would slash the cost of a home energy storage system by up to $3,000. It would do this by batteries being considered eligible technology to create certificates under the Small-scale Technology Certificate (STC) scheme – the scheme that provides for Australia’s very popular “solar rebate“.
“My policy would deliver 15 times more capacity than the Government will get from the new gas-power station it is building in the Hunter Valley,” said Dr Haines, referring to the controversial Kurri Kurri power station.
The big difference of course is batteries don’t generate energy, they store it. But Dr. Haines points out these batteries would collectively act as a giant sponge, soaking up solar energy goodness during the day for release at night (or when otherwise needed) – reducing the (perceived) need for more gas power.
Dr. Haines also says:
“There is huge potential for households to save money with renewable energy, and the cost of batteries is one of the biggest barriers to unlocking those savings,” said Dr. Haines. “My plan would remove that barrier.”
But the cost of batteries isn’t a barrier to saving money with renewable energy as solar-only provides incredible bang for buck and rapid payback in most circumstances. Batteries can provide even bigger electricity bill savings, but it’s their payback time that remains a challenge. A $3,000 subsidy would certainly go quite a way towards addressing that.
If you want to see the difference in payback between solar power only and panels + storage, take SQ’s solar and battery calculator for a spin. It will calculate your overall payback, but also show you how savings and payback are affected by a battery and solar panels separately. You’ll be able to fiddle with system costs to see the difference a $3,000 subsidy will make.
The Fine Print
Scoring the full $3,000 would depend on “how big the battery is and how you use it.”
In terms of size (capacity), Dr. Haines says a 13.5kWh Tesla Powerwall 2 would eligible for around $3,000 subsidy.
The “how you use it” bit has me wondering if as the bill is debated, it may end up meaning you need to join a Virtual Power Plant (VPP), although this isn’t mentioned anywhere in the document as it currently stands.
Dr. Haines said having a home battery means lower power bills and:
“It means taking back control from the power companies over your power usage.”
If VPPs were involved, that requires giving control of the battery to a third-party, something Australians looking for more energy independence may not be particularly keen on.
On the issue of STCs, the number of certificates an individual home battery can create will be determined by the annual electricity discharge of the battery (in megawatt hours – to be determined) multiplied by the “deeming rate” (measured in years). So, the subsidy would drop over time.
The proposed deeming periods:
- Installation before 2026: 15 years
- 2026: 15 years
- 2027: 14 years
- 2028: 13 years
- 2029: 12 years
- 2030: 11 years
The issue is home battery warranties tend to be 5 – 10 years and capacity degrades over time/use – and both these aspects will require consideration. The results of long-term battery testing to date haven’t been particularly encouraging. But as residential energy storage technology evolves, this should (hopefully) generally improve.
Additional Support For Low Income Households
Dr. Haines also called on the Government to introduce a new program of no-interest loans for low-income households to purchase solar and battery installations. Given the “bang-for-buck” situation, even just getting more solar on these rooftops would be a great thing.
The Australian Council of Social Services (ACOSS) worked with Dr. Haines on the Cheaper Home Batteries Bill and put forward their own amendment that would offer additional rebates to low-income people for the cost of power. On a related note, ACOSS is holding a webinar on February 22 in relation to “OurPower”, its vision for clean, affordable, dependable energy for all.
Given the number of solar households in Australia (3 million+), the interest in batteries and an election around the corner, it was a pretty good time to table this bill. While there’s not enough time before the election to pass it, it will be interesting to see what the powers-that-be and those who aspire to be signal what they intend to do with it.
The text of the Renewable Energy (Electricity) Amendment (Cheaper Home Batteries) Bill 2022 along with explanatory memoranda can be found here, and here’s the speech Dr. Haines delivered when introducing it:
Footnotes
- Indi is an electoral division in Victoria’s north-east, adjoining the border with New South Wales. ↩
About Michael Bloch
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I don’t mind the idea of a VPP in principle. But primarily if I am to invest $10k (with subsidy) into a battery, I want first dibs on the juice it holds, or to be paid hansomely if that’s not the case.
Agreed. And $3000 subsidy (if you could get that much) still wouldn’t make the battery cost-effective within the 10-year warranty period. I’ve looked at a number of VPP-subsidy schemes in Victoria and none of them provide me with payback within 10 years. Mind you, I export most of my solar production and 50% of my grid usage is at off-peak rates so I’m a bit different to many households. The real deal-changer will be a reduction in battery prices (which we’ve been expecting for years but never materialises, in fact just the opposite in the case of Tesla) – so I’ll keep waiting and hoping.
Hi Dennis – Looks like we’ve clipped the bottom in terms of battery prices, 15% increases in wholesale prices this month for entry level across many brands, another 10% increase for next month under advice from manufacturers that their material costs have increased by 50% overall – lithium as an example is 1.5kgs in a typical home battery and its cost has risen from $10000 / ton to $50,000++.
Currently lead times are as much as 4-5 months! for Tesla powerwalls (prices have yet to increase for these)
consumers securing their energy supply and various state government contributions mean demand is huge.
In our case, it is that we are not allowed to export in excess of 1.5Kw, so it is painful to see a 6.6Kw system sitting on the roof and not performing to its full capacity. It is not the FIT, but the waste.
We will be getting a 5.1 Kw BYD battery in a few moth looking after our own needs.
Hank
did you buy a hybrid inverter to support this BYD?
5.1kWh IMHO is insufficient as over 10 years the available capacity declines,
you may not be able to add capacity later due to mismatch in available models in the future. Small capacity batteries are more susceptible to operating temps as discharge rates at low temps are negligible.
I would highly encourage you to get a bigger one. Lets hope your installer split your orientations of panels to spread out your generation during the day.
a carton of beer takes almost 1kWh to drop from 25 deg to 3-5deg in the fridge.
Use your fridge as a battery put warm beer in in the morning and drink cold beer at night.
Use start timers on things like dishwasher and get a heat pump for your how water (or time switch for existing electric)
heat and cool your house with Airconditioners
all of these things can easily use up all the available excess production you have.
Hi Karl
We have a Fronius gen24 with 6.6 panels. There are only two of us in the house and we are small users, but we are all-electric.
The 5.1 is just to ascertain what happens in winter. We could have started with 7.6, but that is the biggest the Fronius likes. The BYD is able to manage with a new battery and can equalize the new with the old. We are not going to wait long if we decide to expand.
If we would like to go bigger we have to get two battery sets, but who nows we may also get an EV which than changes the whole equation.
We are aslo looking at the panels and we may go to another 6.6 on a second Fronius and have the Gen24 work as the master and battery manager.
Hank
So if a 13.5kWh Tesla Powerwall 2 costs $15,000 to get installed, the proposed taxpayer funded rebate would see the total drop to about $12,000? After 2026 the taxpayer funded rebate drops of course, but by then perhaps the cost of the technology will have dropped.
Still seems too expensive to be financially viable for me. Until they get closer to the $4,000 mark and a full 10 year warranty, they simply won’t pay for themselves.
Random thought. If you had to replace your solar battery could you double dip for the taxpayer funded rebate, or could you only claim once per person or residence?
George, it would be great for a 13.5kWh battery to drop by such a large amount. However, because there’s quite a lot of peripheral electronics associated with a home battery, the actual battery is just one component of the overall install.
Given the labour costs involved as well, it’s highly doubtful that with current technology that the cost will come down so much any time soon, even if batteries halve in price.
Don’t put your hopes on home batteries dropping in price soon. Tesla increased production last year, but only EVs, battery production stayed the same as demand increased.
There is far too much demand from the EV industry, I believe household won’t drop until there is a lot of competition in the market and the supply is to the same level as demand, I believe presently demand outstrips supply, which I think is why Tesla could increase its price.
Hank
I have a 9.6kW solar system with an 8.2kW inverter. I’d like to get a battery but I can’t find a vendor who can get me the exception from Energex. Can somebody help please?
Hi Alex
I’m guessing you have single phase power. In this case I’m afraid Energex simply may not allow the addition of an AC coupled battery as they count battery inverters as counting towards the 10 kilowatt limit for single phase homes. Replacing your current solar inverter with a hybrid one would allow you to DC couple a battery but is an option but not one I’d generally recommend at this time. If your main goal for having a battery is to get through blackouts then a small generator may be the best alternative at the moment. You can have it hardwired in, which is more convenient when there is a blackout, or you can keep it portable which lets you take it where you might need it.
Hybrids work great!
Sungrow Hybird SH5.0RS does 5.0kW EPS can have upto a 12kW Array connected, will do 6kW in backup and costs just a couple of hundred bucks more than a normal non-hybrid inverter
I have a 5.5kw and done have a battery despite almost getting a cheap one for around $3,000…i use amber electric which gives me wholesale prices for my electricity…when there is a power surge i get the wholesale price which is very high…i think it is worth a look for people who have panels without a battery…its even better with a battery
We are charging our Tesla (car not power wall) using our 5kw system. Every kw/h of power going into the car is effectively saving 30c that Synergy (western power) charge for grid power. Admittedly it’s an expensive way to get a Tesla battery but it feels good to be getting free power to charge it.
This is the ultimate solution ! Well done Driving your battery is fun too!
I’ve just bought one too although the wait is 6-7 months.
There is a large group of tesla owners in WA- they do club runs etc together and have lots of handy advice
It’s just welfare for the wealthiest households. Terrible public policy.
The only people who’ll get the subsidy are those with a lazy $10k burning a hole in their pocket and who can afford to still lose money on an installing an overpriced battery.
Far better to spend the money on providing solar PV (and maybe storage) for public and social housing and on helping essential community services, such as shelters for those fleeing violence or aged/disability care so they can reduce their costs of operation, or on further support to local grid scale systems which will benefit everyone, rather than the wealthy few.
Then there is the issue that state battery incentives such as in SA and the ACT have resulted in battery prices increasing (which is a common problem with demand stimulus programs by govts).
My take on Batteries is this.
When the upwards curve of Longevity and Output meets the downward curve of Price of Acquisition and Installation, I will start to think seriously of installing a Battery
My 14 year old 2.7 Kw system with 44 cents feedback tariff enables our 2 person household to make a small profit.
My expectation is that by the time my contract runs out in 5 years, batteries will be more affordable.