Your solar panel payments are running out – can you get paid to install a battery?

The four million households reaping the rewards of rooftop panels are set to lose what remains of solar feed-in tariffs in coming years due to a glut of daytime renewable energy supply, but a push is on for the federal government to supercharge household batteries.

Feed-in tariffs – payments to households for sending unused power back to the grid – and subsidies on purchase or installation drove massive solar panel take-up over almost two decades, making Australians the most enthusiastic installers in the world.

In the 12 months to July, rooftop solar generated nearly double the amount of electricity that came from large-scale solar farms.Credit: Fairfax Media

Energy Minister Chris Bowen attended a rooftop solar installation in western Sydney last week to mark the four-millionth system being hooked up.

“Solar energy on our rooftops is in many ways our most important form of energy in our national energy market,” Bowen said.

In the 12 months to July, rooftop solar generated nearly double the amount of electricity that came from large-scale solar farms.

But feed-in tariffs, which have been subsidised by governments, have fallen from about 20¢ a kilowatt-hour to 5¢ or less over the past decade as rising renewables in the electricity grid have lessened energy retailers’ demand for household solar during the day.

With solar panels still proving popular as a way to reduce energy bills, climate advocates and energy experts say batteries, which can retail from $10,000 to $15,000, should be the next beneficiary of government subsidies.

This would allow households to store the solar power that is not needed by the grid during the day and reduce their reliance on the grid at night, when it is powered largely by coal and expensive gas-fired generation.

This would, in turn, reduce the grid’s reliance on polluting fossil fuels and help the federal government reach its goal of raising renewables to 82 per cent of the grid by 2030.

UNSW senior researcher Dylan McConnell said about 10 per cent of the electricity that could be supplied by renewables – equivalent to the consumption of about 750,000 typical homes – was not making it to the grid.

This was mainly because wind- and solar-farm owners switched off their plants during the day as surplus renewables forced down the wholesale price, making it uneconomical to operate. Essentially, this meant there was little need in the near future for more solar in the grid.

“Households shouldn’t think about solar exports at all. It’s actually about how you use your energy at home more effectively than exporting it to the grid,” McConnell said.

NSW provides a grant for household battery buyers of up to $2400, while in Victoria a four-year interest-free loan of up to $8800 is on offer.

However, Smart Energy Council chief executive John Grimes has argued batteries are still too expensive and government should set a target for 1 million homes to have a battery by 2030, up from 250,000 already installed.

“There is now so much free solar power being generated in Australian homes that the outdated grid can’t handle it,” Grimes said.

“The evening peak demand period is a major cause of increased power bills. The more batteries that households have results in a reduction in peak demand, meaning lower power bills for everyone. Solar and batteries are a silver-bullet solution for the federal government to help cash-strapped Australian households.”

Advocacy group Solar Citizens’ national campaigns director, Joel Pringle, said feed-in tariffs motivated people to buy panels and a similar incentive was now needed for batteries.

“We want to see households making better use of their solar energy so they can use it during the day as much as they want, but they can also use some of it at night. And that means getting a household battery,” Pringle said.

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