Are Solar Batteries Worth the Investment in Australia Right Now?

If you’ve been considering adding a solar battery to a new or existing solar PV system, you’re not alone. Many Australian households have expressed a desire to buy solar batteries to reduce their dependence on traditional power companies that have had a stranglehold over them for decades. In Sydney, over 1 in 4 new systems were installed with a battery last year.

Touted as the future of electricity, batteries allow solar power generated during the day to be stored for use at night time or on cloudy days when solar panels cannot generate electricity. In fact, adding a battery to a residential solar system can double the amount of self-generated electricity consumption. Although the benefits of solar batteries are clear, the high up-front cost has many people questioning if it’s worth investing now or waiting for the price to drop.

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solar batteries by Tesla, Senec and LG

How much do solar batteries actually cost?

The question of “how much do batteries cost?” is difficult to answer as there are a lot of variables at play when installing a battery and these can all impact the cost.

As a rule of thumb, residential solar battery storage prices are currently around $1,000 per kWh including installation and GST. Variables to consider include the size and brand of battery, the solar installers used to complete the works and whether additional works are required to make the battery compatible with your system (like installing an additional inverter).

So, are solar batteries worth it in Australia right now?

Unfortunately there is no black and white answer to this as it entirely depends on your individual circumstances. In a lot of cases and coming purely from a ROI perspective, no. They have a relatively high up-front cost and come with (typically) a 10 year warranty, so will likely need to be replaced before their pay-back period.

There are a number of instances, however, where it might make sense to consider the investment now. Below are some of the most common scenarios:

When the utility company charges significantly more than the feed-in-tariff

Normally, properties with solar power systems are able to sell their surplus kilowatt hours (kWh) back to the energy company – this is called a feed-in-tariff. This raises the question; if you’re getting paid for your excess solar power, why should you store it? The reality is that some companies charge much more for what they buy from a customer. In this case, each kWh stored in batteries for later use is worth more than what it would if it were sent back to the grid. Depending on the difference in price, the savings associated with storing and using that electricity yourself can very quickly add up.

When there are federal and/or state incentive programs

The financial case for batteries also improves when there are local rebates and incentives on offer. These can range from upfront rebates when purchasing batteries, to demand response programs that reward you for taking load off the power network.

There are several active battery programs in Australia, which vary by state and territory:

  • In Victoria solar battery rebates are available at their current value of up to $4,174 until all rebates in 2020–21 have been fully allocated. They will then reduce to $3,500.
  • New South Wales offers an interest-free loan of up to $14,000 for homeowners who deploy a solar power system with batteries, and up to $9,000 for adding batteries to an existing installation.
  • South Australia offers a battery rebate of up to $3,000 and the opportunity to participate in a virtual power plant (VPP). When battery owners join a VPP, they let the power company use their battery capacity in exchange for power bill credits.
  • The Australian Capital Territory (ACT) offers a battery rebate of $825 per kilowatt of power capacity, up to 30 kW (up to $24,750).

Incentives can greatly improve the feasibility of using batteries, either by reducing the upfront cost, or by increasing savings in the long run. The outlook improves further when expensive electricity is combined with battery incentives, which is the case in many parts of Australia.

When batteries come with extended warranties or battery replacement plans

Some solar batteries come with warranties well beyond the typical 10 year standard. For instance, the new SENEC Home V3 Hybrid comes with a 20 year extended warranty. Receiving a decent ROI is far more achievable in a 20 year timeframe, particularly when coupled with government incentives.

When it's not just about the economics

The world is changing. International agreements, global business attitudes and the public’s awareness are all pushing us towards a low-carbon economy. Knowing the impact our consumption habits have on the planet and the security of future generations, limiting your reliance on the grid is a huge step towards reducing your personal carbon footprint.

In other cases, it’s a matter of future-proofing yourself. Being more independent from the grid gives you, your family and/or your business the assurance that you will always have access to a reliable source of energy. Maybe you don’t need the excess energy now but you will in the near future. Should you eventually invest in an electric vehicle (over 50% of Australian’s are intending to buy an EV as their next new car purchase), then installing a battery (such as the Tesla Powerwall) means you are set up and ready go.

In short, if money isn’t an issue and/or you can afford the repayments, then why not?  Install as many panels as your roof can fit – the more you generate the more you can cover the balance of your energy consumption needs. If you can afford to buy a $10k TV which offers $0 ROI, or a $20k holiday then why not invest in your home and carbon impact? It comes down to your personal convictions and choices—what makes sense for you might not make sense for the next person.

Key takeaway...

Solar batteries are a viable option for Australians with solar panels who want to minimise their power bills and be less reliant on the grid. However, solar battery prices in Australia are currently high. For many Australians, a solar battery might not be worth the investment yet. However, when local electricity costs are very high, the savings potential improves the case for solar panels with batteries. Local incentives can also tip the scales in their favour. Finally, the benefits of battery storage aren’t purely financial and, as we move towards a zero-carbon future, more Australians are turning to energy storage as a means to achieve energy independence and a low carbon-footprint.

If you want to learn more about solar battery installation in Australia or would like a free quote, our solar power and battery storage calculator is simple to use! Just enter your postcode and average daily power consumption in kWh. The solar calculator will then generate useful estimated performance information and potential savings. We can then send this information to 3 trusted local installers in your area to receive free, obligation-free quotes.