Solar battery storage: Is it worth the cost?

Solar battery storage technology is generating a lot of discussion within the energy industry – and for good reason. It’s been hailed as the future of electricity, and given Australia has one of the highest penetrations of rooftop solar panels in the world, we’ve fast become a focus-market for many retailers.

Concerns over increasing electricity costs have led many Aussie households to turn to renewable energy solutions, such as solar storage, as an alternative to drawing power from the grid. But are solar batteries really worth it? Unfortunately there is no black and white answer to this as it entirely depends on your situation. In this article, we take a look at what to consider before installing a solar battery and whether or not it can save you money.

Chances are that you’ve probably never purchased a solar battery before, so you might not be too sure what to expect. If you’re thinking about a solar battery for your home or business, here are some things you need to know.

What solar battery systems are available in Australia?

Australia is a hotspot for solar storage retailers, so we have plenty of choice when it comes to choosing batteries. One of the most recent well-known and recent additions to the market is the much-hyped Tesla Powerwall 2, with 13.5 kilowatt hour (kWh) storage capacity. There are many other battery storage systems available however, including Aquion’s AHI batteries, LG’s Lithium-ion batteries, Redback’s Smart Hybrid System, Enphase’s modular AC batteries and Ecoult’s ‘Ultrabattery’ to name just a handful. These storage units vary considerably in size, price and efficiency. Visit Canstar Blue’s page to see a complete list of available solar storage retailers.

Solar Battery Price

The biggest factor impeding further growth in the solar storage market is the cost of a solar battery system. Prices for solar batteries largely depend on the storage size, with costs around $1,000 – $2,000 per kWh storage capacity.

If you first need a solar panel system installed, then that can cost anywhere from $2,000 to $12,000 depending on system size. Most households with storage units will opt for a solar system with a capacity of 4kWh, which will cost around $6,000 to $8,000.

You will also need to pay for a compatible solar inverter as well as installation costs which will usually run in to the thousands of dollars, depending on the complexity of the installation. Nearly all solar companies will request a quote before they can give you some idea of how much this will set you back.

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How much solar battery storage do I need?

Solar batteries come in a number of sizes to suit a range of needs. Some models, such as the Aquion AHI battery, can even stack upon one another to increase overall storage size to suit your needs. Most solar batteries within a reasonable price bracket will not be able to completely cover your electricity demand. Remember that the larger the battery, the more expensive it will usually be, so only purchase what you think you will need.

Battery Efficiency

Efficiency in the context of solar batteries refers to how much energy is successfully stored and converted to useable electricity. It’s currently impossible for a solar battery to be perfectly efficient, but some models come much closer than others. Take for example, Tesla’s Powerwall which has an efficiency of 92.5%, meaning it loses 7.5% of solar generated electricity in the storage process. This is still considerably higher than some models on the market.

How long do solar batteries last?

Solar battery life is measured in cycles, which refers to the process of filling and emptying a battery with electricity. When measuring a life span in years, it’s usually assumed there is one cycle per day. Obviously the more cycles, the more durable the battery.

What is your feed-in tariff?

A feed-in-tariff is a rebate on your energy bill for each kWh of electricity that a household solar system generates but doesn’t actually use, meaning it’s fed back into the energy grid. This raises the question – if you’re getting paid for your excess solar power, why should you store it? It’s a good question, but while some areas of Australia receive high tariff rates (upwards of 20c per kWh), some states have reduced or completely removed their feed-in-tariff subsidies, meaning the rate you’re paid is usually around 4-6c/kWh.

Solar Plans & Prices

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Ausgrid network in Sydney but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Energex network in Brisbane but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on SA Power network in Adelaide but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

How much money does a solar battery save?

Now for the question everyone is wondering – are home battery units even worth the mammoth cost? They’re marketed as being able to help you cut your electricity bill, and they certainly deliver on that. According to DC Power Co, an average Aussie home with rooftop solar could save around $550 a year by installing a solar battery to their system. Impressive right?

Well, not so fast, remember that solar batteries are quite the financial investment. Households can spend up to $16,000 on a solar storage unit alone. This means that – despite the incredible savings on ongoing electricity bills – it’s unlikely the entire solar system will pay for itself before the solar battery’s warranty expires.

Let’s take the below case example to illustrate the costs and savings associated with a solar storage system.

Case Study: Solar Battery Storage

Let’s take a Sydney household with a 5kW solar system already installed. The standard four-person Sydney household consumes 20kWh of electricity a day on average. Now let’s assume this property pays an electricity usage rate of 30c/kWh, meaning it’ll cost the home $6 a day in electricity costs. 

The home’s 5kW solar system produces about 20kWh of electricity each day, if conditions are optimal. For each kWh of power that’s generated from the solar system will mean the household will be saving 30c/kWh.

If this household were to add a solar battery…

To complement its current solar system, let’s say the household decides to purchase the Tesla Powerwall 2, which costs around $14,500 for the unit plus installation (excluding the cost of an inverter). The Powerwall 2 can hold 13.5kWh of electricity, but will take around 15kWh of the solar system’s generated 20kWh to fully charge the battery, according to SolarQuotes.

Of the household’s 20kWh of electricity use each day, 13.5kWh would be stored in the Powerwall 2 as opposed to relying on the grid, meaning the house would save around $4 a day, or approximately $1,500 each year.

The payback time would be around 10 years…

Given that the Powerwall 2 has a 10-year warranty and 15-year life expectancy, this means that the household in this particular situation would be right on the money with their purchase. If you don’t currently have a solar system installed and paid off, then you will also need to factor in the costs of solar panels as well as their potential savings from feed-in tariff credits.

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When will solar batteries be affordable?

Solar batteries may still be worthwhile for certain households, particularly ones that are ineligible for feed in tariffs or are charged high electricity usage rates. The payback period will vary across different households, so consider your personal situation before deciding if a home battery unit is right for your home. The price of solar batteries have fallen over the past few years, so if it’s not right for you now, keep your eye on the market.

A solar battery will definitely help you reduce your grid energy demands, however it’s unlikely that you will save money within a 10-year timeframe given how expensive storage units currently are. With that said, nearly anyone with a bit of energy know-how will insist a solar panel system is still a good investment – especially if you’re smart about energy usage.

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