Labor takes power bill election fight in-house with help to buy home batteries

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Households are set to gain federal help to cut their energy bills under a government plan to make it easier for them to buy home batteries, in a major campaign pledge from Prime Minister Anthony Albanese in the coming days.

The new policy comes as the energy debate dominates the opening days of the election campaign, with the Coalition preparing to release modelling soon on the impact of their controversial gas reservation plan on electricity prices, while the prime minister refused to commit to continuing electricity subsidies.

The Labor policy seeks to cut the cost of household batteries that store surplus solar power that is generated during the day, aiming to make it more affordable for homes to use the batteries when electricity prices peak in the evening.

Labor plans to roll out subsidies for household batteries very soon.Credit: Alex Ellinghausen, iStock

A battery large enough for a family home costs between $10,000 and $15,000, before installation, but could cut more than $1000 from an annual power bill.

Underwriting the cost of these batteries through low-cost loans or direct subsidies would give Labor a new cost-of-living pitch as it tries to convince voters of a better standard of living despite failing to drive down prices by $275 as it promised at the last election.

Plans for the battery pledge were confirmed by a government minister and two other senior Labor sources.

Albanese on Sunday distanced himself from modelling produced for Labor three years ago by consultancy firm Reputex to underpin the party’s climate and energy policy. While the modelling said prices would come down by $275 over this term, Albanese said it was “based on the circumstances at the time”.

The prime minister has previously argued the Russian invasion of Ukraine drove up energy prices worldwide, with consequences for Australian industry and households.

Dutton has reminded voters of Labor’s $275 cost claim in his media appearances to promote the gas plan he unveiled in his budget reply speech on Friday night, saying he would help more gas fields get underway and would scrap funding for the Environmental Defenders Office, an agency that opposes the projects.

Labor countered the Coalition on its vow to force gas exporters to reserve more fuel for the domestic market, saying it will use an existing law to ensure supplies for households and industry.

Albanese said the existing law, passed at the end of 2022 over Coalition objections, already worked as a gas reservation plan without the need for the Coalition policy.

Asked if he was willing to get more gas from the exporters if needed, Albanese said: “Of course. The law provides that, most importantly, and we’ve acted.”

The Coalition policy promises to reduce the wholesale gas price to below $10 a gigajoule, but it said on Sunday it was not forecasting a specific cut to consumer prices.

In the upcoming announcement, Labor will also spruik its existing community battery programs and argue household batteries will reduce the reliance on gas power time.

The Coalition’s energy spokesman Ted O’Brien hinted in February that the opposition was considering a similar pledge, describing household batteries as a practical solution.

Two weeks ago, the Greens pledged up to $10,000 in grants and $20,000 in low-interest loans for batteries as part of their push to switch from household gas.

The Smart Energy Council calculates that an average home in NSW could save about $1100 in electricity costs a year with a battery, while Victorians could snip about $650 off their bills.

But uptake is relatively low despite NSW’s existing subsidy for household-battery buyers of up to $2400, and Victoria’s four-year interest-free loan of up to $8800.

Bloomberg on Sunday predicted that Australia could be on the cusp of a utility-scale battery boom, propelled by sustained high volatility in the power market, expected coal plant closures and the anticipated government subsidies.

On another household cost, the Coalition said it would review its cut to fuel excise after the first year, holding out the prospect of more help.

The Coalition claimed it would reduce the wholesale gas price from $14 to $10 or lower per gigajoule, but the most recent figures from the Australian Energy Regulator show that average prices have been below $14 in recent months.

The regulator said the average price was $12.17 in Victoria in the financial year to date, compared to $13.12 in Sydney, $13.67 in Brisbane and $13.16 in Adelaide.

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