Should You Buy a Solar Battery?
In this article, we will walk you through the main benefits and drawbacks so you can decide if you want to add a solar battery into the quotes you get from installers.
Significant savings can still be achieved with a solar-only system! Bills might be slightly higher without a battery, but not by much if you choose the right electricity plan and using energy efficienctly during daylight hours. Don't delay solar panel installation in the hope of future reductions in battery prices! Learn more about solar cost/benefits in this article.
What are the Benefits?
Here are key reasons to consider a home battery:
- Evening Solar Use: Batteries store solar energy for nighttime use, reducing your grid dependence and lowering electricity bills.
- Increased protection from electricity price increases. A comprehensive battery system might reduce dependence on the grid by up to 95%.
- Navigating Time Of Use Tariffs: With Time of Use (ToU) tariffs, electricity costs more during peak evening hours. A battery system helps you avoid these high charges by using stored solar energy, and some systems, like Tesla's, can even smartly charge using cheaper off-peak grid electricity.
- Backup Power: Certain batteries can provide backup for essential home circuits during blackouts, keeping your lights on when the neighborhood goes dark.
- Participating in Virtual Power Plants: Battery ownership enables you to join a network of other battery users. This collective can support the grid, especially during high demand periods, while also integrating more renewables. Plus, you might get compensated for this support.
- Accessing free money from government rebates
Some of these benefits come with additional considerations, so we'll unpack these below.
More About Time Of Use Tariffs
It can be hard to justify the upfront cost of a battery if you've got a flat rate electricity tariff. However, this changes if the cost of electricity changes throughout the day if you've got a battery that can be configured to charge during off-peak times so you can use stored electricity when rates are more expensive.
If you want to take it one steps further, you can join Amber, an electricity retailer who exposes you to wholesale electricity pricing that changes every 15 minutes. The fluctuations in prices mean that you can not only purchase cheap electricity from the grid, but also export your solar electricity when prices are high. However, things can easily go the other way and you can end up using power when prices are high. Unless you're willing to invest time and effort staying ahead of the market, this is not recommended.
More About Backup Power
Firstly, it's important to note that the number of instances of blackouts during the year is statistically low. A 2015-2016 study referenced by Energy Networks Australia (1) found that a typical energy customer will experience 1.5 outages a year, totalling 200 minutes. If blackout protection is the main reason for purchasing a battery, it'll save you a lot of money if you figure out other ways to make it through the few occasions of the year (if they happen at all) without electricity.
If blackout protection is important to you, most Australian solar batteries are designed to provide power during blackouts, but their capabilities vary. Key features to consider for maintaining blackout resilience include:
- Backup Current Capacity: Determines how many appliances you can run at once.
- Surge Current Capability: Ensures the battery can manage the initial surge when an appliance starts.
- Switchover Time: The brief outage experienced when switching from grid to battery power, which can vary in duration.
- Solar Charging in Grid Outages: Some systems may not charge from solar panels when the grid is down.
- Failsafe Mechanism: Check if a malfunction in the battery's inverter could disrupt your regular grid power.
All of these are talking points when you consult an experienced installer, especially if you are considering budget batteries.
Full-home backup can be expensive. A cost-effective strategy is to back up only essential circuits, such as:
- The fridge to prevent food spoilage.
- Lighting for basic visibility.
- Select power outlets, including one for your internet router.
- A small air conditioner to cope with hot summers.
This targeted approach makes sure you've got the basics covered in the event of a blackout, without overspending.
More About Virtual Power Plants
A Virtual Power Plant (VPP) is a network combining solar power, battery systems, and possibly other energy resources and controllable loads like electric hot water systems. Managed by a central operator, VPPs dispatch stored energy from these Distributed Energy Resources (DERs) to the grid during high-demand periods with peak electricity prices. VPP operators also profit by charging batteries when wholesale electricity prices are negative, and through payments for grid stabilization services.
Joining a VPP can offer benefits like upfront battery discounts, payments based on energy discharged, higher solar feed-in tariffs, or a combination thereof. However, participation in a VPP means ceding control of your battery to an operator, which will increase the number of charge and decharge cycles when they use it. This will reduce the lifespan of the battery and often this cost offsets any financial gain provided by the VPP.
For a lot of people, the economic benefits of joining a VPP don't stack up. Make sure you check reviews of VPP providers from websites like SolarQuotes (2) and carefully read the small print of their agreements to make sure you're getting a reasonable deal by joining their network.
More About Rebates
There is no federal battery rebate.The only state/territory rebate is the Northern Territory’s Home and Business Battery Scheme, worth up to $5,000.
Victoria offers an interest-free battery loan up to $8,800.
The ACT offers an interest-free loan for $15,000.
How Much Will It Cost?
The cost of a home battery depends on its storage capacity, measured in kilowatt-hours (kWh), and various installation factors. Larger batteries benefit from economies of scale, though less so than solar panels.
As a ball-park, reasonable price ranges for different sizes are:
5 kWh storage: $7,000-$9,000
10 kWh storage: $11,000-$14,000
15 kWh storage: $15,000-$18,000
Remember, battery installation costs vary significantly based on:
- The distance between the battery and switchboard (longer distances require more cabling)
- The number of backup circuits needed
- The location of these circuits (main switchboard or sub-board)
- The requirement for new circuit breakers
- The need for safety installations like bollards or fireproof backing
- Whether your home uses single-phase or 3-phase power (the latter often incurs higher costs)
- The price difference between straightforward and complex installations can exceed a thousand dollars.
You can find a more comprehensive cost comparison on SolarQuotes (3).
In summary
There isn't a clear-cut economic case for investing in a solar battery; the decision hinges on a range of personal reasons. Consider factors like safeguarding against fluctuating power prices, ensuring backup power during blackouts, and the desire for achieving Energy Freedom. Weighing these diverse motivations against the initial financial outlay is key in determining if a solar battery aligns with your personal goals.
If you don't have solar yet, it's definitely not worth considering a battery. Refocus on solar with our article, "How To Pick The Best Solar Power System"
You'll need an up-to-date switchboard if you're getting a battery installed. Find out if you need an upgrade with our article, "Will I need to upgrade my switchboard?"
Want to fast-track home electrification? Join an Energy Freedom Homes Masterclass and learn to identify your needs, gain expert installation advice, and meet trustworthy tradespeople. Check your Masterclass readiness now!