Last year the number of residential battery systems installed in Australia increased by 20%. The 31,000 battery systems that were installed is a remarkable number, considering Australia entered a recession in September last year for the first time in almost 30 years. This article considers some of the key drivers behind the growing market adoption of small-scale battery storage systems in the Australian market.

Reduction in Feed-in Tariffs

The rate solar system owners can earn for selling energy back to the grid (Feed in tariff) has fallen significantly in the last 2-3 years in line with decreasing wholesales prices. In fact in many states, the wholesale cost of electricity moves into negative prices in the middle of the day when rooftop solar system generation peaks.

Many solar system owners have export rates of up to 70% or 80% and have been left searching for alternative means to create value from their surplus energy. This has been observed as one of the underlying drivers to battery take up.

In our recent analysis, we can see that even with the lower solar feed in tariffs the economic case to install a battery does not stack up. There are other non-financial factors that we need to consider when assessing the demand for battery storage systems.

State-based Solar Battery Rebates

The below table outlines some of the battery schemes that have come out in Australia over the last 3-4 years.

 Current RebateLaunched inSouth Australian Home Battery SchemeUp to $300 per kWh installed2018NSW Interest Free Solar LoansInterest free loans of up to $9,000 to retrofit a battery2020ACT Battery Rebate$825 per kW of Sustained Peak Output2016Solar Victoria$4,174 per household2019

With some of these programs were introduced several years ago they have been progressively building awareness. Many of these schemes help consumers with the financial return of investment for their battery system whilst supporting grid

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