NSW Battery Rebate: It’s Payback Time

New South Wales’ battery rebate can knock thousands off the cost of a home energy storage system. So, how does that impact simple payback?

If you aren’t familiar with the NSW incentive, in a nutshell it involves PDRS certificates (PRCs) that have a value, which can vary according to market conditions. After any admin fees, the total value of these certificates is offered as an up-front discount to the battery purchaser. Check out our recently updated NSW battery rebate information page to get some more background on how it works.

Calculating Estimated Payback

For the purposes of this exercise, we’ll look at three batteries – the Tesla Powerwall 3 (13.5kWh usable capacity), Sungrow’s SBR HV (12.8 kWh model) and the BYD Battery Box Premium HVM (13.8 kWh).

In case you want to play along at home, this is how I’ll go about it the first time around.

• I’ll use the SolarQuotes NSW battery rebate calculator to estimate how much the rebate will be based on a postcode of 2750 and a new battery installation.
• Then using SQ’s solar + battery calculator with its default values – aside from specifying a 2750 postcode and subtracting the rebate from the battery system cost noted in that calculator – it will provide a rough estimate of payback time (it will show separate payback periods for the two in the results).

Note that the solar + battery calculator will also have a 6.6kW solar power system selected by default. I’m going to leave that as is.

So, here we go – the results:

• A Tesla Powerwall 3 attracts 1,088 PRCs. At a rate of $2.00 per PRC, this gives a base rebate of $2,176. With the incentive subtracted from the estimated supply and installation cost; it works out to $14,424 and the battery’s simple payback is 27 years.
• The Sungrow SBR HV 12.8 is eligible for 1,031 PRCs. At $2.00 per PRC, this means a base rebate of $2,062. After the incentive, the estimated cost of supply and installation is $10,438 and simple payback for the battery is 21 years.
• BYD’s Battery Box Premium HVM 13.8 attracts 1,112 PRCs, for a base subsidy of $2,224 at $2.00/PRC. After the subsidy, the estimated cost of supply and installation is $11,376 and simple payback is 23 years.

Not Great, Right? But Wait …

Based on the calculator’s default settings, in each instance the battery payback is far, far longer than the warranties – even after the New South Wales incentive. But try it with your own details and battery of choice and you’ll likely get a much different (and hopefully much shorter) simple payback result given variables such as:

• Your location.
• How big your solar system is.
• The battery you choose (and what you’ll pay).
• What you pay for electricity and how much you use.
• PRC value.

For More Accurate Payback Results

Given all the variables, a much more accurate way to go about it is with SQ’s “add battery” calculator, which is specifically designed for adding a battery to an existing solar system. Other major points of difference include support for time-of-use as well as flat-rate electricity plans, and it requires you to upload what’s called an NEM12 data file. This is a file that contains electricity consumption/export data and other metering information for your property. If you have a smart meter, you *should* be able get hold of your NEM12 file – here’s how. (it’s worth the effort).

I uploaded my NEM file (BTW, I have a 10kW solar system) and here are the results:

• Tesla Powerwall 3: 21 years
• Sungrow SBR HV 12.8: 17 years
• BYD’s Battery Box Premium HVM 13.8: 17 years

These results were based on an EnergyAustralia flat rate plan available in postcode 2750. It appears EA doesn’t have a time-of-use (ToU) offer for that area according to their website.  The best electricity plan for solar + battery owners is often ToU with lower off-peak and shoulder rates. While time-of-use plans have expensive peak rates, these can be mostly avoided if you have enough solar and storage.

Under an EA ToU plan (and I’m not suggesting EA’s are the best plans available), simple payback for me looks like so:

• Tesla Powerwall 3: 15 years
• Sungrow SBR HV 12.8: 12 years
• BYD’s Battery Box Premium HVM 13.8: 14 years

That’s looking better, but still longer than the 10-year warranties. Again, your own results will very likely be different to mine.

Don’t Forget VPP Incentives

The NSW incentive provides extra subsidies when the battery will be connected to a Virtual Power Plant – there’s a box you can tick on the NSW rebate calculator indicating this. VPP incentives can also be claimed for eligible existing batteries. In the above examples (new installations):

• Tesla Powerwall 3: an additional 165 PRCs, increasing your incentive amount by $330.
• Sungrow SBR HV 12.8: an additional 156 PRCs, increasing the incentive by $312.
• BYD Battery Box Premium HVM 13.8: additional 168 PRCs, increasing the subsidy by $336.

.. which will help accelerate payback further (plus there may be other VPP incentives) – as long as you don’t mind having a third-party taking control of your battery.

If a home battery purchase decision hinges on rapid payback, it may still not be for you – but you may place great value on other aspects, such as blackout protection. Learn everything you need to know about understanding, buying and owning home energy storage.