Solar power tipped as winner but are home batteries next big thing

Falling costs of solar panels and the punishing price of grid electricity are fuelling an extraordinary level of South Australians choosing to generate their own energy. Now households are running the ruler over investing in batteries.

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Falling costs of solar panels and the punishing price of grid electricity are fuelling an extraordinary level of South Australians choosing to generate their own energy.

More than a third of homes now have solar and the push is on for consumers to add batteries.

Households are considering whether the enticing prospect of a financial advantage coupled with realising every little bit helps in fighting climate change means now is the time to buy in.

Experts have told The Sunday Mail solar is a really good deal but consumers should be cautious before taking the leap with batteries.

“You might pay $6000 for a solar system,” said Finn Peacock of leading reference agency SolarQuotes.

“That’ll pay for itself somewhere between two-and-a-half and four-and-a-half years.

“It’s an incredible payback.”

The numbers show how consumers are voting with their wallets.

The 227,000 rooftop solar arrays provided nearly a tenth of the state’s total energy generation last year.

In 2015, only 21 battery installations with solar were registered in SA under the Renewable Energy Target. Last year, there were 597.

The State Government’s home battery scheme, launched last October, has 1200 approved registrations on its books with 400 of those installed to date.

“The uptake has accelerated this year,” Energy and Mining Minister Dan van Holst Pellekaan said.

In addition, batteries are being rolled out at 1100 Housing Trust homes.

Richard Turner, founder of SA-based ZEN Energy, said back in 2004, paybacks on solar were 12 to 15 years. This contracted steadily, gaining momentum after falling below a seven-year payback through to today’s quick returns.

“With batteries, a couple of years ago payback was also 12 to 15 years,” he said.

“More businesses have come in like Sonnen and Tesla and now it’s probably just in excess of 10 years.

“But when you add solar and batteries together you get a much lower payback — an average around that seven-year mark.

“So if you take a long-term view of your property, you’re economically in front.”

Advocacy organisation Renew puts payback on solar at under four years.

“But battery prices haven’t been coming down as quickly as we would have expected,” Renew’s energy analyst Andrew Reddaway said.

Mr Peacock said desire for a battery led people to twist their sums into justifying a purchase.

“With a battery you might pay $15,000 for something that stores, maybe, $4 worth of electricity,” he said.

“On an emotional level it makes sense but the economics aren’t there yet.”

Individual households vary so there is no single best solar or battery product experts recommend.

Factors include total energy usage, time of use, orientation of the home and what appliances are used.

Mr Peacock said the “sweet spot” was 6.6kW of solar panels and a 5kW inverter.

This was because Australian standards restricted output to the grid at 5kW for a single-phase home unless the owner wanted to navigate extra bureaucracy.

A third more panels were allowable and gain a bigger federal “rebate” — the Small-scale Technology Certificates allocated under the Renewable Energy Target.

Panel prices are now about the same as the rebate — $600 a kW — so it was worth buying the extra.

“By the time the installers roll the truck, get the guys on your roof to put in the racks and fit the inverter, the rebate pretty much covers the wholesale price of the extra panels,” he said

Retailers are constantly developing new products to attract consumers.

AGL this week launched an Offsite Solar plan aimed at people in apartments, rental or other accommodation unsuited to solar.

AGL customers can subscribe and gain credits off their bill based on energy sold by AGL’s solar farm at Wagga Wagga in NSW.

Energy Locals this month opened a scheme where a solar owner can sell their energy to friends or family at a price agreed between themselves, not set by the retailer.

The price covers the generation component but not network, environmental, GST and other costs.