Power play: what to consider when installing a home battery in Australia | Solar power
Australian homeowners have shown an overwhelming appetite for energy storage, with more than 400,000 batteries already installed under the federal government’s subsidy scheme. However, a shift in policy is now redirecting how these systems are funded to ensure they better match actual household requirements.
The Transition to Tiered Subsidies
The Cheaper Home Batteries program was initially designed to encourage adoption, but it often led users to install systems that exceeded their actual needs. In response, the government announced a move toward a tiered scheme to support more tailored installations.
Starting in May, the subsidy structure will be divided by usable capacity. All battery systems will receive the full base subsidy for the first 14 kilowatt hours (kWh). Systems exceeding 14kWh will receive 60% of the subsidy up to 28kWh, while capacity between 28 and 50kWh will be subsidized at a rate of 15%.
This financial incentive is not permanent. The discount is scheduled to be slowly reduced every six months until the year 2030.
Prioritizing Efficiency Before Storage
While the subsidies are attractive, some experts suggest that a battery may not be the first logical step for every home. Tim Forcey, a researcher, author, and home comfort and energy adviser, argues that there is no need to rush into a purchase.
Forcey recommends first improving energy efficiency through measures such as draught-proofing, window coverings, double-glazed windows, and better insulation in the walls, and roof. These steps ensure that subsequent electrification efforts provide more value.
Further steps include replacing gas water heaters with electric versions, swapping gas cooktops for induction, and installing heat pump split-cycle air conditioning. “Now you’ve got an all-electric home, so you’ve got a better chance to get actual value out of a battery,” Forcey says, noting that powering a “leaky house” with a large battery is neither efficient nor effective.
The Synergy of Solar and Storage
Batteries are most effective when paired with solar power. Nigel Morris, chief strategy officer at the Smart Energy Council, suggests maximizing generating capacity first because the initial installation fee is the largest associated cost.
“The best bang for your buck, and the best bang for the environment, is to put on as much solar as you can,” Morris says, adding that “no one ever said: ‘Damn, I added too much solar’.”
Expanding solar capacity early can help future-proof a home, especially for those planning to add children, new appliances, or an electric vehicle (EV). Morris notes that an EV adds a significant load, making overnight storage crucial for managing increased consumption.
Strategic Investment and Installation
Determining the right size for a system is critical for return on investment. Dr. Dylan McConnell of UNSW points out that “bigger is not always better” from a value perspective.
Since December, the average system size has been roughly 32kWh, while average daily household use typically ranges between 15kWh and 20kWh. This suggests that most current systems are already more than sufficient for standard needs.
Beyond sizing, the quality of the installer is paramount. Morris warns that poor attention to detail can lead to safety risks, such as batteries being placed where they could be hit by a vehicle in a tight garage.
Forcey also highlights the risk of incorrect installation, noting cases where batteries were set up to draw power during expensive peak times and discharge when electricity is cheapest. To maximize value, users should review their electricity plans; for example, some providers may offer free electricity between 11am and 2pm starting July 1, allowing batteries to charge for free during the day.
Frequently Asked Questions
How will the new battery subsidies work from May?
The scheme will be tiered: the first 14kWh of usable capacity receives the full base subsidy, 14kWh to 28kWh receives 60%, and 28kWh to 50kWh receives 15%.
What should I do before installing a home battery?
Experts recommend first improving home energy efficiency (such as insulation and double-glazing) and then electrifying the home with induction cooktops and heat pump air conditioning.
Is it better to have a larger solar system or a larger battery?
Nigel Morris suggests maximizing solar generating capacity first to get the “best bang for your buck,” as this helps future-proof the home for increased loads like electric vehicles.
Are you prioritizing energy efficiency or storage for your home’s energy transition?