All about batteries

Solar with battery storage

The cost of batteries is continuing to come down, and batteries are beginning to make financial sense for some households. Others choose a battery because they’re keen to be at the forefront of a clean energy future.

How does it work?

A battery stores the solar energy your panels produce during the day, for your household to use later, in the evening or on a cloudy day. The solar energy you produce will first be used for your daytime energy needs, and the excess will be stored in the battery. When the sun isn’t shining, your electricity will be drawn from your battery, and only from the electricity grid when your battery is empty.

A house with solar panels and battery storage system

Image source: Clean Energy Council

Financially, this means that when the sun is shining, you use free electricity, saving you the retail cost of electricity. When you’re using energy stored in your battery, you save the retail cost of electricity, but you are no longer receiving the feed-in-tariff for this energy, since you are storing it in your battery and using it yourself. While you’re using battery electricity, you’re saving the cost of retail electricity minus the feed-in-tariff.

Chart showing power generation with solar and batteries  

Image source: NSW Government Solar System Factsheet for Households and Businesses 

When the battery is empty, your electricity will be drawn from the grid, and you’ll pay retail electricity prices. And when the sun is shining and your battery is full, you can still feed excess energy into the grid and receive the feed-in-tariff.

A standard solar and battery system will not provide power during a blackout. The system automatically shuts off to protect the power lines, and anyone working on them during an outage, from electricity being fed into the grid. For an additional cost, batteries can be configured with additional hardware to provide backup supply during a power outage. If this is important to you, tell your battery retailer.

To make use of a battery, your solar system needs to generate more than you use, and you need to use electricity when the sun isn’t shining, for example in the evenings. 

Is a battery right for you?

If you want to be at the forefront of a clean energy future, or if your household has high electricity usage, an electric vehicle, or has switched off gas and gone all-electric, a battery might be right for you. A reputable solar and battery supplier, or an independent advisory service such as the Yarra Energy Foundation, can look at your energy bills and help you decide whether a battery makes sense for you, and what size battery is right for your home.

The Victorian Government offers rebates on batteries to eligible households in certain postcodes, although currently not in the City of Yarra. Visit Solar Victoria to learn more about battery rebates for eligible postcodes.

It is usually more cost-effective to install a battery at the same time as you are installing solar, rather than to add one later. However, batteries won’t make financial sense for every household right now. If you’re not ready for a battery right now but you think you will be soon, talk to your solar retailer to understand what you’ll need to do to add a battery to your system. Batteries can be added to any solar system, but some additional components may be needed, even for a ‘battery-ready’ system.

If you decide a battery is right for you, choose a Clean Energy Council Approved Battery to ensure you can access any available rebates, and your battery meets Australian standards. The same considerations for choosing a solar company apply. Batteries are typically expected to last around ten years, and this is the length of a typical battery warranty. For most batteries, performance is reduced over time, and after ten years can be 60-80% of the original, although some types of batteries can be higher. Check the product details for the battery’s ‘end of life’ capacity.

To determine if a battery is going to save you money over its lifetime, consider the payback period – the time it will take for your energy bill savings to equal the upfront cost of the battery. Payback periods can vary depending on the battery you choose, your solar capacity, and your energy use.  If the payback period is longer than the expected life of the battery, it is unlikely that your household will benefit financially from that battery.

The Clean Energy Council and CHOICE have more information on choosing a battery system. The NSW Government has also released a guide to batteries for homes in NSW, and while some sections are specific to NSW, much of the information about selecting a battery is relevant to Victorian households.