Labor’s home battery help to jolt stalled industry

Labor’s proposal to subsidise the installation of household batteries will kickstart a stalled industry, but threatens to worsen inequality.

Labor’s proposal to subsidise the installation of household batteries will kick-start a stalled industry, but threatens to worsen the inequality between homeowners and renters who can’t participate in the scheme.

Prime Minister Anthony ­Albanese on Sunday unveiled a $2.3bn package to subsidise the cost of a household battery for people with rooftop solar. Labor said the initiative would reduce the cost of a typical installed battery by 30 per cent.

Australia has the world’s highest proliferation of rooftop solar with four million systems installed. A battery would allow those to capture excess power, which would otherwise be exported to the grid. This reserve can then be used to run home appliances when the cost of electricity spikes. Since batteries are expensive, the cost of the systems has been prohibitive for many households.

Tony Wood, director of the Energy Program at Grattan Institute, said the program had the capacity to accelerate installations after a period of relatively low uptake. “We were quite critical of the government’s decision to extend electricity bill rebates. At least with this policy you will get something for the billions of dollars of investment,” he said.

“Labor is hoping to appeal to those households with rooftop solar. It will want uptake but not too much as it blows out the budget, but I think there will be interest. The industry is primed for the uptake that many had expected to materialise.”

Sydney man James Abbott with a Tesla home storage battery to complement his energy efficient house and EV.

An uplift in battery installations will be a boost to installers, many of whom offer both solar and battery packages.

But Labor is also mindful of avoiding the pitfalls of the pink batts insulation scheme. In 2009, then prime minister Kevin Rudd aimed to revive the economy amid the global financial crisis by enabling the insulation of more than 2.5 million homes in under three years. It was halted in early 2010 because of four deaths, poor oversight and widespread fraud.

To qualify for the credit, Labor has insisted that households will need to use certified installers working with government-­accredited suppliers. Australia also has strenuous standards that, energy experts say, will minimise risks. Still, while Labor has set aside $2.3bn for the program, a higher-than-expected uptake would strain the budget.

More batteries would also aid energy retailers, which are under mounting pressure to replace their fossil fuel fleets.

Australia currently has about 15GW of rooftop solar, equivalent to 25 per cent of the grid’s generation capacity, and a rise in the number of batteries will allow the storage of excess capacity that is currently flooding the grid during periods of low demand. The rapid increase in solar and batteries is also expected to give rise to ever larger virtual power plants.

A VPP pools thousands of households or businesses with rooftop solar and batteries. Households are paid to sign-up, which is an increasingly important part of a retailer’s offering.

Louisa Kinnear, chief executive of the Australian Energy Council, which represents the country’s retailers, said boosting VPPs would help minimise wholesale price volatility, which is a major determinant of household bills.

“Encouraging VPP participation would help broaden the benefits of storage and rooftop solar generation and see reduced costs for all,” said Ms Kinnear.

While analysts seized on the benefits of possible lower energy prices, critics insist the scheme threatens to stoke inequality. One senior energy industry source said the government was offering “middle-class welfare”, and a rise in electric vehicles could make home batteries redundant. While EVs extract power from the grid, there is a growing push towards so-called bidirectional charging which allows a car to power the grid.

Originally published as Labor’s home battery help to jolt stalled industry