Battery ‘bill buster’ for millions of households, but renters and cash-strapped may miss out

Millions of people with roof solar panels could find it easier to buy a home battery, as installers say the Albanese government’s plan to heavily discount the upfront cost will wipe years off the payback time and turbocharge uptake of the energy-storage technology.

Prime Minister Anthony Albanese promised on Sunday that a re-elected Labor government would spend $2.3 billion to provide discounts of up to 30 per cent on household battery systems from July 1 in a push to slash power bills and accelerate the grid’s shift to cleaner sources of energy.

Anthony Albanese has pledged to cut the cost of home battery installations by up to 30 per cent if Labor is re-elected.Credit: Glenn Hunt

The move was applauded by renewable energy advocates and home battery installers, who described the program as a “bill buster” that would cut power costs for at least 4 million households.

Government and industry calculations suggest households with solar panels and a battery could save up to $1100 a year on power bills by reducing household power consumption, while benefiting consumers more broadly by easing strain on the electricity system in the evenings after the sun goes down and prices typically rise.

However, the generous discount scheme would not be available to renters or directly benefit cash-strapped households, prompting social services to step up calls for further investment in energy efficiency measures and solar panel uptake for low-income Australians.

“The reality is the home battery subsidy will be taken up by people who own a home and already have solar and lower energy bills,” said Edwina MacDonald, acting chief executive of advocacy group the Australian Council of Social Service.

“It’s the people on the lowest incomes and renters that continue to miss out.”

Opposition Leader Peter Dutton, who is seeking to fight Labor over energy prices and the cost of living, pointed to the prime minister’s battery subsidies as “proof that electricity prices are certain to go up”, and claimed the cost of a battery would still be $10,000 after the government’s proposed discounts.

“I just don’t know that the next-door neighbour, who can’t afford to pay for that battery, is going to subsidise the battery for me or for you on higher incomes,” he said.

Dutton has previously indicated the opposition would also promise a battery scheme. However, with four weeks to go in the campaign, the Coalition is yet reveal any plans.

The Tesla Powerwall 2 can retail for more than $15,000.Credit: Pat Scala

While some household batteries, such as the Tesla Powerwall 2, can retail for more than $15,000, many other batteries are far cheaper, said John Grimes, chief executive of the Smart Energy Council, an industry group.

There are 77 solar batteries on the Australian market at present, starting at about $4000 for a five-kilowatt-hour battery. At least nine larger 10-kilowatt systems range from $6000 to $10,000.

Grimes said this meant the government’s 30 per cent discount could go much further, potentially making “a massive difference in bridging the gap between people who couldn’t previously contemplate getting a solar battery”.

It would help drive down prices across the grid, not just for those who could afford a battery, he added, by helping avoid spikes in wholesale electricity prices during times of high demand on the grid, and reducing the flow-on effect to consumer bills.

“Less demand on the energy grid means fewer price peaks, a win-win for all,” he said.

Bryn Foletta of SolarGain, a major solar and battery storage provider with 23 stores nationally, said the discount would lower the out-of-pocket purchase and installation cost for one of its most popular batteries from $4900 to just over $3000.

With an estimated savings of $1100 a year for homes with solar plus batteries, the cost of adding a battery system to a home with existing solar panels would pay for itself in as little as three years, he said.

“It’s going to make it far more reachable for the consumer – especially if you’ve got an existing solar system and you’re adding a battery to it,” Foletta said.

“Obviously, it does depend on the battery, but it’s quite a significant amount of money.”

More than 4 million homes – or one in three – are now fitted with solar panels, the highest per capita take-up rate of any nation globally. Just one in 40, however, has a battery too.

Climate and Energy Minister Chris Bowen held a briefing with about 500 battery installers on Sunday to field questions about the program’s rollout.

Installers, who are now bracing for a significant increase in demand if Labor is re-elected, anticipated there may be a sharp drop-off in bookings until July 1, when the program would begin, as potential customers held off for the subsidies to kick in.

Bowen advised the industry to continue taking on customers and performing installations but not to turn the batteries on until July, allowing customers to claim the discount then.

Energy consultancy Green Energy Markets’ head of analysis, Tristan Edis, described Labor’s policy as an important initiative that could boost uptake, ignite competition and drive down prices for batteries in the future.

“Hopefully, they will get the industry to go down the cost curve such that it becomes a mainstream option that’s affordable for mums and dads in the mortgage belt, much like [rooftop] solar is now,” he said.

“If you look at where we are installing solar now, it’s in the mortgage belt where people are sensitive to electricity bills – it’s not in Hawthorn or Toorak or Double Bay.”

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