Bill shock means home batteries make financial sense, despite expense

Rooftop solar is now supplying more than 10 per cent of Australia’s electricity, and last year a record 57,000 households installed a storage battery to beat soaring electricity bills.

Solar industry analyst SunWiz reports more than a quarter of a million households nationally have batteries, after the number of installations rose 21 per cent in 2023.

SunWiz managing director Warwick Johnston said the payback period for batteries had shortened significantly because of electricity price rises, despite the devices themselves remaining expensive.

Peter Horsley from Wahroonga has invested a fortune in solar panels, batteries and electric cars.Credit: Oscar Colman

“There’s been considerable growth in the market and that’s reflective of both growing appetite for savings on electricity bills, as well as people seeing all the blackouts that are happening around the place as violent weather becomes more commonplace, and deciding that they want to ensure their electricity supply,” Johnston said.

It comes as the Clean Energy Council, using SunWiz, on Tuesday reports that total rooftop solar capacity is now 20 gigawatts, or 11.2 per cent of the nation’s total power supply.

Last year, 314,507 households brought online 2.9 gigawatts of rooftop solar capacity, exceeding the 2.8 gigawatts of large-scale wind and solar energy generation commissioned in the same year.

The number of households installing solar panels was similar to 2022, but the average system is now 9.4 kilowatts compared with 4.2 kilowatts a decade ago.

Rooftop solar generates electricity only while the sun is shining. If the residents are not there to consume the power during the day, it either goes back to the grid or a battery can capture it and store it for later.

The Clean Energy Council estimates a battery can save a household with solar $900 a year or more, while an “orchestrated battery” – which can feed in electricity to the grid at optimum times – can save $1150 a year.

Johnston said the price of batteries had been stable for a few years, ranging from about $9000 to $15,000 depending on size. While batteries would drop in price eventually, consumers were increasingly deciding the time was right because of ongoing bill pressure.

Peter Horsley said the solar panels and batteries made financial sense, but it was also for environmental reasons to protect the future of his children, including Miranda, 8, and Lucas, 13.Credit: Oscar Colman

Electricity prices rose sharply in 2022 and early 2023 due to a spate of breakdowns at ageing coal-fired power stations and international prices pushed higher by the war in Ukraine. Prices have stabilised, but remained high.

Johnston said the national average length of payback was 4.8 years for solar panels alone, or 8.4 years for solar panels plus a battery. He said batteries would take off once the payback period fell to seven years.

The SunWiz figures show NSW led the charge in household batteries, with 18,670 installations last year, followed by Victoria with 12,022. South Australia was next with 10,165, punching above its weight mainly because of high electricity prices in that state.

Power companies pay households for the electricity they generate and deliver to the grid, but these “feed-in tariffs” have declined and there is now a wide gap between the price consumers can earn for electricity during the day and the price they pay at night.

This eroded the benefit of solar for most households unless they had a battery as well, and Johnston said this was a big driver of battery uptake in states such as NSW with a large base of established solar panels. There are 3.79 million households with rooftop solar overall.

The federal government’s target of 82 per cent renewable electricity by 2030 includes funding to help households install battery-ready solar panel systems and upgrade insulation, windows and appliances. There are also state programs to subsidise household solar.

The Clean Energy Council and others have called for rebates or subsidies for household batteries directly, including targeted assistance for low-income households. While solar panels do the heavy lifting environmentally, batteries also contribute by lowering demand on the grid at night.

Heidi Lee Douglas, chief executive of not-for-profit group Solar Citizens, said the goal should be to drive uptake of batteries to one million households by 2030.

“We’re world leaders, per capita, for solar, and if we tie that with batteries, we can use that cheap, clean power at night as well, when we’re most beholden to the high prices from coal and gas,” Douglas said.

Peter Horsley, from Wahroonga on Sydney’s upper north shore, has gone to great lengths to electrify his home, spending about $20,000 on 17 kilowatts of solar panel capacity (some of it second hand) and $39,000 on three batteries.

His household has seven people, including two tenants, and the cost of heating and cooling the house, running the swimming pool, and any other electricity usage was $1500 a quarter before solar panels. Now, his energy bills are zero or in credit, including for two electric vehicles.

“My wife’s an accountant, so she’s looked at all the finance around this, and I work in technology, but I’m very passionate about addressing climate change, so I looked at it from an environmental perspective,” Horsley said.

Moving from gas to electric appliances delivers household savings worth hundreds of dollars a year, even without solar panels and batteries, because of high gas prices.

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