Everything you need to know about Labor’s home battery promise

Nearly 4 million Australian households have rooftop solar and millions more say they plan to install it within the next five years.

The density of solar panels is highest in the outer suburbs, a key battleground in the election, where 30 per cent to 40 per cent of freestanding homes have rooftop solar, compared with fewer than 20 per cent of equivalent homes in the inner city.

Solar panels on roofs in Sunbury, outer Melbourne.Credit: Paul Rovere

This is the demographic that stands to benefit from the Albanese government’s election promise to provide subsidies for solar batteries, a fact Energy and Climate Change Minister Chris Bowen was keen to point out when selling the policy at the weekend.

“Our suburbs are our solar champions,” Bowen said, “and will be our battery champions too. There is 10 times more solar in Blacktown than Bondi and seven times more in Frankston than St Kilda.”

The battery promise opens up one of the clearest policy differences between the major parties. The federal opposition’s energy platform centres on nuclear and gas.

Labor’s scheme is called the Cheaper Home Batteries program and this is what you need to know.

Why would I want a battery and why does the government want me to have one?

Rooftop solar now contributes more than 11 per cent of the nation’s electricity, playing an important role in reducing our greenhouse emissions.

Rooftop solar has been so successful that it is putting strain on the grid. The problem is that demand is low in the middle of the day when solar is plentiful, but high after sunset when the panels no longer generate power.

This produces a demand curve known in the industry as the “solar duck” because of its shape.

This situation has even led electricity networks to penalise panel owners for feeding into the grid during the day.

A home battery is energy storage that is charged by solar during the day and retained for the household to use when it’s needed. Electric vehicles with vehicle-to-grid charging can fulfil the same role.

This allows rooftop solar to grow, helping reduce national emissions, without putting pressure on the grid. The home owner saves money by using more of the electricity they generate, while the demand curve is evened out for the electricity network. Win-win.

How much can you save off your bill?

That depends on how much electricity you use.

Analysis by the Department of Climate Change, Energy, the Environment and Water suggests a household with existing rooftop solar could save up to $1100 off their power bill every year by adding a battery, and a household installing a new solar and battery system could save up to $2300 a year.

That’s up to 90 per cent of what the Australian Energy Regulator says is a typical annual electricity bill for a family.

Are there any other benefits?

If you have plentiful green electricity day and night, there is a case to fully electrify your home and disconnect gas, and there may be further grants and low-cost loans available to assist.

Some consumers buy a battery so they won’t lose power in a blackout, while others sign up with electricity retailers that allow them to sell electricity back to the grid at peak times.

What type or size of battery should I buy?

The lowest price, before any subsidy, is about $4000 for a 5 kWh battery.

A Smart Energy Council audit of 9500 energy users found that a 6 kWh battery at a cost of $5000-$8000 before subsidies would meet the needs of nine out of 10 homes.

Households can ask solar retailers for more tailored advice or use calculators such as the Solar Quotes website.

Credit: Bloomberg

How big is the discount and how do you claim it?

The Cheaper Home Batteries program will reduce the cost of a battery by 30 per cent.

Batteries up to 100 kWh will be eligible, but the subsidy will apply only to the first 50 KWh. That means a 6 kWh battery with a $6000 price tag will cost $4200.

Consumers will earn a tradeable certificate for installing a battery, just as they do with solar panels. The retailer will provide the discount upfront if the buyer agrees to sign over the certificate.

When will it start?

If Labor is re-elected, the policy will start on July 1 this year. It will not require legislation, just a regulatory change to the Small-scale Renewable Energy Scheme, the same program that has underpinned solar panel rebates since 2011.

Smart Energy Council chief advocacy officer Wayne Smith said that delays were unlikely because the $2.3 billion for the project was in the federal budget and work was done at the Clean Energy Regulator and the department before the government went into caretaker mode.

Who is eligible?

Home owners, small businesses and community facilities. It is not means-tested.

What about renters?

Abundant supply of solar power during the day has already lowered prices at off-peak times. More households with batteries will lower demand in the evening and therefore reduce prices at peak times, while lessening the need for grid upgrades.

This should all add up to lower prices for everyone.

The Albanese government is also promising an additional $150 direct energy bill relief for every household and about 1 million small businesses from July 1, and investing in energy upgrades for social housing.

Am I eligible for state-based incentives as well?

That is the intention. The federal government says it wants to complement rather than replace the existing schemes offered by some states and territories.

The NSW government started the Peak Demand Reduction Scheme in November and has had 7800 households and businesses take it up so far, more than half outside Sydney. This program offers a discount of up to $2400 plus a $400 payment for connecting to a virtual power plant – software that allows a network of distributed energy sources to work together.

Western Australia has the Residential Battery Scheme, which provides up to $7500 off home batteries.

The Northern Territory has the Home and Business Battery Scheme to access a grant of $400 per kWh, for a maximum subsidy of $5000.

What about loans?

There are several ways for consumers to access interest-free loans.

The Victorian government offers means-tested, interest-free Solar Battery Loans up to $8800.

Tasmania has the Energy Saver Loan, which is an interest-free loan from $500 to $10,000 to be repaid over three years.

The Australian Capital Territory has interest-free loans of between $2000 and $15,000 for eligible households, under the Sustainable Household Scheme.

Low-cost finance is also available through Bank Australia, ING, Plenti and Westpac, backed by the government.

How long does a battery last?

Solar Quotes says you can expect a home battery in a temperate climate with typical use to last 15 to 17 years. Solar batteries exposed to higher temperatures, and worked hard every day, could have an effective life of 12 to 14 years.

The recycling industry is in its infancy, but manufacturers are generally eager to take them back because they contain valuable materials.

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