In October 2022, the Australian Energy Market Commission (AEMC) published an article on their website called:  Turning point for incentives to invest in residential batteries.

In the piece they state that with the following trends in the energy markets are creating greater incentives for consumers to store and use their own energy using residential batteries:

  • Falling price of feed-in-tariffs.
  • Implementation of export charges during peak solar production times of the day.
  • Increase cost of power during peak periods.
  • Falling cost of batteries.
  • Longer battery warranty times.

For households that already have solar systems, the net benefit of owning a solar system increased  from $0.15 – $2.0 per kWh in 2020 ( this is the difference between the value of the feed-in-tariff and the cost of energy during peak periods), to $0.24 per kWh in 2021.  This trend of falling feed-in-tariffs and export charges is expected to continue, with a potential net benefit of $0.30 per kWh in 2024/25.

Coupled with the now more common warranty period of 10 years by most battery manufacturers, this is now resulting in the average pay back period for many of the more reasonable priced battery storage systems to fall within the warranty period.

Of course many factors come into play, such as the size of the solar system, the size of the battery, amount of excess power being generated daily, if the household is a heavy energy consumer or not, etc. however it can be expected that the average 10-12kWh battery system could pay itself off in 6 to 7 years, whereas a premium priced system such as Tesla Powerwall 2 most likely will not pay itself off until several years after the warranty period has expired.

AEMC states that there are currently around 3.19 million solar systems installed in Australia, with this number expected to increase by 37% by 2024/25 and 83% by 2029/30.

Data sourced from the Clean Energy Regulator shows that the total number of registered small-scale battery storage systems in Australia as of August 2022 was just over 50 thousand.

In conclusion, the AEMC piece states:

“Residential battery costs are falling, with warranted lifetimes increasing. The incentive to store low-cost solar energy and use this energy in peak periods is also increasing. By 2025, battery installation may be economic for a number of households with solar PV installed. This will have implications for consumers and for the wider grid as the system transitions and greater amounts of DER, EVs and other new technologies are deployed across distribution networks in the NEM.”