Explained: How new solar battery rebate can save you thousands
A new 30 per cent rebate for solar batteries will drastically bring down the price of taking solar-powered homes off grid. Here’s everything you need to know.
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Australians will soon save thousands with the cost to install a solar battery and take their homes and businesses off grid set to plunge.
From July 1, a new 30 per cent federal government rebate on new solar batteries begins - part of the $2.3 billion Cheaper Home Batteries program.
It’s an extension of its energy incentive scheme which subsidised the cost of solar panels.
It’ll take the average cost of battery from in excess of $10,000 down to a more attainable $6000.
It will enable households to store excess electricity generated from their solar panels during the day to power their homes at night instead of tapping into the electricity grid.
While there are more than 4 million rooftop solar panel systems installed in Australia, only about 100,000 have batteries, according to government data.
Batteries have been expensive, making them inaccessible for many households and businesses, but energy minister Chris Bowen has flagged the government is aiming to have one million installed by 2030.
The rebate is expected to dramatically increase demand, with installers saying they are already seeing a surge in phone calls from potential customers.
Solar Battery Group CEO James Hetherington also believes the rebate will “supercharge” the industry and more electricians will seek out the accreditation required to install batteries.
Are you thinking about installing a battery? Here are some answers to questions you might have from installers and a comparison agent.
Why should I get a battery?
Mr Hetherington said the trigger for most of his customers buying batteries is their energy bills.
The excess power generated from solar panels for most owners is fed back into the energy grid and in return, their energy providers gives them a feed-in tariff, or a credit on their next energy bill.
However tariffs are now limited and close to zero, Mr Hetherington said.
“If you’re a solar homeowner, you’re not getting anything now for excess production feeding back into the grid.
“And now the topic is, what do I do with this excess power? I either let the retailer have it for free or do I want to try and store it and then use it when the sun isn’t out.
“The return on investment and the ability and size of the batteries in the market now are of a good investment, the numbers are stacking up better than they’ve ever done.”
How much could a battery cost?
It depends on how much energy and battery capacity you would need.
Luke Stronach, CEO of solar provider 1KOMMA5° Australia CEO said buyers could expect to pay between $1,000 to $1,200 per kilowatt-hour (kWh) before any rebates were applied and installation could typically cost about $1,500 to $2,000 at minimum.
“For customers in the market, anything less than that price range is likely a sign of a lower quality product,” he said.
For a standard 10kWh battery with installation costs included, Mr Hetherington said it could cost about $12,000 to $15,000 a year ago.
But he expects batteries will come down in price with rising demand, in addition to being discounted by the rebate, dropping the total installed price of a 10kWh battery to about $5,000 to $6,000.
This could vary between different brands and models.
Comparison website SolarQuotes has estimated the installed cost of a battery with about 13kWh capacity after the rebate could vary from about $6,000 for a budget option, up to about $10,950 for a high-end Tesla product.
How much battery capacity would I need?
In a survey of 9,500 households, the Smart Energy Council found a 6kWh battery would meet the needs of 90 per cent of homes.
But Mr Hetherington said the 10kWh size is expected to be bought by most households, as the rebate can only be used once, for one battery per home.
“[The government] wants people to buy the biggest battery they can afford and then claim the rebate against that as a policy of one chance, one battery per household.
“So really think about the size of the battery and think about your expansion over the next three to five years because you won’t be able to claim the rebate twice.”
Max Opray, editor at comparison website SolarQuotes added buyers could calculate how much energy they’d need through solar and battery calculators available online, using their electricity bills.
What is the criteria for the discount?
The requirements are still yet to be finalised and could change.
But for now, the intended criteria from the government states the rebate can only be used for a battery system installed either with an existing solar panel system, or installed together with new panels.
Participants may only access the rebate for batteries with a total capacity in the range of 5kWh to 100kWh.
It could be used for a single battery unit or a system of modular cells connected to serve as one battery unit.
The rebate could also be used to add capacity to an existing battery system, if it’s adding at least 5 kWh and the total upgraded capacity of the system doesn’t exceed 100kWh.
The scheme will only apply to batteries in the Clean Energy Council’s approved product list, which has standards for electrical safety and quality.
Systems installed before July 1 can apply for the rebate - but they can only be switched on after the start date, SolarQuotes stated.
Households can only access the rebate once - Mr Hetherington suggested customers may want to consider if their energy needs will increase over the next few years.
The best time to purchase is sooner rather than later, he added, as the rebate is scheduled to decrease each year from January 1 2026.
Can I access the rebate if I’m already benefiting from another state or territory incentive scheme?
Customers could combine the federal rebate with other schemes for extra savings and benefits - but the federal government has said they should check their eligibility requirements.
In WA, households could access the state rebate from the Residential Battery Scheme from July which grants up to $1,300, as well as zero-interest loans for up to $10,000, which can be used for batteries, inverters or panels.
The ACT has offered a zero-interest loan under the Sustainable Household Scheme for up to $15,000, to support buying energy-efficient products.
And in NSW, residents with batteries are able to be paid up to about $1,500 from July 1 by joining a Virtual Power Plant (VPP), a network of home solar systems that coordinated together can function as a single power plant.
NSW does currently have a discount for battery installations, but it won’t be available from July 1 and can’t be combined with the federal rebate.
When does the battery pay for itself?
In terms of savings households would accumulate on their power bills, an average battery would pay for itself at about the six to seven year mark, Mr Hetherington said.
He estimated most of his customers would save around $1,200 in their bills each year.
The rebate could halve the payback period to around three to four years, he said.
“All batteries under this rebate scheme have to have a ten year warranty,” he said.
“If you’ve got a battery that’s going to pay you back within three to four years, it’s got a warranty for ten years and if you’re going to stay there for at least ten years, it is a sound investment.
“The numbers now make sense, it’s the right time to get a battery if you’ve been thinking about it.”
What if I live in a place with no sun?
The value and payback period of a solar battery does vary between regions, particularly if you live in a place with limited sunlight.
SolarQuotes has estimated a 10 kWh battery with a total cost of $8,500 after the rebate would pay for itself in an average 6.3 years in Adelaide, compared to 7.7 years in Brisbane and 8.3 years in Sydney.
In Melbourne, there was an estimated payback period of 13.9 years compared to 20.7 years in Hobart.
The company has also factored in varying electricity costs between regions in its estimates, noting electricity is relatively cheap in Tasmania.
The higher electricity pricing is, the more saved on each bill and the quicker the battery would pay for itself.
“In Tasmania, for most people, a battery probably wouldn’t pay itself off,” Mr Opray said.
“It might be that someone wants blackout protection, but that battery business [case] doesn’t quite stack up so well in Tassie just yet.”
Could my household become “bill-free” with a battery?
Yes - but it could require some lifestyle changes.
Mr Hetherington said current batteries may not be able to serve all of a household’s energy consumption - for example if it used air-conditioning or heating all night.
But he said for an average home with a fridge, modem, lights and ceiling fans used at night, a decent sized battery should be able to “get you almost to zero”.
“Every home’s different and what we like to do is encourage our customers to get the software monitoring systems on the battery.
“We can then teach them how to reorganise their lives to maximise the usage of the battery.
“It’s things like running your dishwasher during the day when your solar system is producing at its peak.”
He explained most energy retailers’ peak tariffs were between 3pm to 9pm - meaning it would cost more to run appliances at night.
Customers could get around this by setting appliances on a timer, to run at 10 in the morning instead, he said.
Can businesses access the rebate?
Yes, small to medium sized businesses can take advantage of the rebate for batteries sized up to 50kWh.
They could potentially power small commercial warehouses or sites, Mr Hetherington said.
Mr Opray added farmers had lobbied to ensure they were included in the rebate.
“If you’re on a farm that’s a bit far-flung and relying solely on a diesel generator, a battery could be part of the mix there.”
What should I know if I’m shopping for a battery?
The government has recommended customers check they’re using installers certified with Solar Accreditation Australia and their batteries are also on the Clean Energy Council’s approved product list for the rebate.
“The Clean Energy Council, what they do is they will do lots of testing to make sure that these batteries are fit for Australian conditions,” Mr Hetherington said.
“That is a great initiative in the industry to protect against very cheap batteries flooding the industry that aren’t really fit for purpose and don’t do a very good job.”
Buyers won’t have to pay the full upfront cost of batteries or apply for rebates - instead installers will claim the rebate from approved auditor bodies.
They will have to submit compliance certificates and electricians also have to include geo-tagged selfies on the job as part of the verification process, Mr Hetherington said.
Mr Stronach added buyers should be wary of operators cutting corners, commenting “if it seems too good to be true, then it is”.
“Aussies in the market should do their research, look for a company that’s been around for a long time and has experience installing batteries.
“Ask the installers how long they’ve been in operation, how long they’ve worked with battery storage and how many batteries they’ve installed over the last three years - this should give you a good sense of what experience the business has.”
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