Home Batteries to get 30% cheaper, as Labor announces new $2.3B policy – techAU

Minister for Climate Change and Energy Chris Bowen has announced this morning a new policy by the Australian Labor Party those targets Home Battery Storage for Australians.

The new policy would reduce the cost of a ‘typical’ installed battery by 30%.

Home Storage Batteries allow you to collect energy from solar during sunlight hours, and timeshift that to the hours you need it. Most household energy use spikes at 5PM-10PM as we return from work, lights, TVs, the oven, heating/cooling, dishwasher etc. By consuming power from the battery, you get to avoid drawing power from the grid at it’s most expensive time, saving you money.

Modeling shows that this would lead to around 1 Million new Home Batteries being installed at Australian homes in the next 5 years.

With more than 1 in 3 homes (4 Million) adding solar to their roof in the past decade, many are ready customers for battery storage, for the right price. Labor says only 1 in 40 have home battery storage.

This brings us to the definition of a ‘typical’ installation.

Let’s imagine a home purchases a home storage battery like a Tesla Powerwall, Sungrow Battery, SolarEdge Home Battery, BYD Battery Box, or SonnenHome. These batteries typically cost between $6,000 and $15,000 installed, depending on the complexity.

Complexity comes from challenges like the distance between the installation location to the meter box, and if you have the space, circuit breakers etc. Finally there’s grid connection approval to deal with as well, as energy companies may not have sufficient transformers in place at the local level to deal with 100% of homes moving to solar+battery.

If your circumstances mean you are eligible, then a 30% reduction from the Federal Government could fundamentally change the economics of home battery storage for many Australian households.

Labor predicts that by adding battery storage, could reduce reduce energy bills by up to 90%. It is worth noting that Labor’s forecast for energy cost reductions in the past have been challenged, forecasting at the last election that households would save $275 a year, which hasn’t materialised.

This program is worth $2.3 Billion to the budget.

What is important is the immediacy of this program, scheduled to start as soon as July 1 this year.

Being a federal program, we’d expect that this would work in addition to state incentives.

In Victoria, the basic maths would go something like this..

• Purchase a Tesla Powerwall 3 for $15k ($11,900 PW3 + gateway $1,700 + installation).
• 30% federal cost reduction, reduces the cost to $10,500.
• Take a $8,800 interest free loan from Solar Victoria (assuming you meet the eligibility criteria)
• Result: $1,700 out of pocket

In this scenario, purchasing a home storage battery is far more approachable and yes, you still have the repayments on that interest-free loan, but that should be offset by the dramatically lower energy bills.

If you did decide on Tesla’s Powerwall, you’re getting a battery with 10 years warranty, and if you decided to join their Virtual PowerPlant, you’ll get an additional 5 years of warranty, making the ROI easily positive.

Having a battery opens the door to lending your power to your neighbours via the VPP, up to 50 times a year. VPP customers receive $220 (incl. GST) in Grid Support Credits every year, per Powerwall.

If you’re in NSW, eligible households can receive up to $2,400 off the price of the battery for a 4kWh or larger battery system.

In NSW, the cost of a home battery storage solution could be..

• Purchase a Tesla Powerwall 3 for $15k ($11,900 PW3 + gateway $1,700 + installation).
• 30% federal cost reduction, reduces the cost to $10,500.
• $2,400 state incentive.
• Result: Out of pocket expense of $8,100.

While not as appealing as the Victorian offer, this does bring it well below the $10k mark. For homes spending $2-3k per year on energy, they could see a positive ROI in 3-5 years.

For more information visit the links below.