A Home Battery is a large rechargeable battery designed to power your home |
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Home Batteries can store excess energy from solar systems or they can be programmed to charge from the grid, taking advantage of off-peak pricing |
Home batteries offer several advantages, including lower electricity bills, reduced household carbon emissions and protection against grid outages |
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Contrary to popular belief, Home Batteries can make economic sense, especially if you consume enough energy to cycle the battery to 75-100% of its capacity on a daily basis |
Want to learn more?
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GeneralWhat is a Home Battery?
A Home Battery is a large, rechargeable battery designed to power your house. Home Batteries primarily store renewable energy from solar systems but they can also be programmed to charge from the grid, taking advantage of off-peak pricing. This stored energy can then be used when you need it, for example, once the sun has set, during peak grid price periods or when there is a grid outage. What are the benefits of a Home Battery?
Home batteries offer several advantages, including lower electricity bills, reduced household carbon emissions and protection against grid outages. SystemWhat is the difference between AC coupled batteries and DC coupled batteries?
Firstly, your home, and the grid, run off alternating current or AC power. Solar panels generate direct current or DC power and batteries only store DC power. If you already own a solar system then you will be familiar with what an inverter is. An inverter converts DC power from your solar system to AC power which your home or the grid can utilise. Home Batteries come in two different formats; AC coupled or DC coupled. AC coupled batteries have a built-in inverter that converts the DC power stored in the battery into AC power that can be utilised by the home or the grid. They work in conjunction with your existing solar inverter and can therefore be retro-fitted to any existing solar system without the need for modification. The most popular AC coupled battery system is the Tesla Powerwall 2. DC coupled batteries generally utilise the same inverter as the solar system. However, standard solar inverters do not support DC coupled batteries, only “hybrid” inverters do. So, if you have an existing solar system with a standard inverter then you will need a new “hybrid” solar inverter if you want a DC coupled battery. These inverters can cost thousands of dollars depending on the size and brand required, hence it may not be cost efficient to retrofit one of these to an existing solar system. Popular DC coupled battery brands include BYD, SolarEdge, Sungrow and GoodWe. Can I retrofit a Home Battery to my existing solar system?
If you plan to retrofit a Home Battery to an existing solar system (or you don’t have a solar system), the best approach is likely to be an AC coupled battery that does not require a solar inverter upgrade, for example, the Tesla Powerwall 2. Your current solar inverter is unlikely to be able to communicate directly with a DC-coupled battery and therefore, if you were to purchase a DC-coupled battery, your solar inverter would need to be replaced at a cost of thousands of dollars. Such an upgrade to your solar inverter is not necessary with an AC coupled battery, which will likely make it the most cost effective option. What are the best battery brands in the Australian market?
There are now over 80 brands with over 500 different battery models approved for use in Australia (click here to view the list).
However, you can quickly narrow your search by considering a few key factors such as:
These brands consistently receive good reviews by installers and consumers, and they are also established companies with good local warranty support. 
What size Home Battery do I need?
The most appropriate battery size for your household depends on several factors, including your energy requirements, the size of your solar system, the retail plans available in your area, and your reasons for acquiring a home battery, such as financial return or reducing your carbon footprint. Let’s try to answer it based on the average Australian household which uses approximately 20 kWh per day, and the primary motivation for acquiring a Home Battery is to reduce electricity grid imports in order to save money. Assuming the household has solar and is a working household; then 60-70% of its electricity may need to be purchased from the grid. Much of this is consumed when the grid is expensive and primarily coal and gas powered e.g. through the early evening peak. To cover 65% of the household electricity needs from a Home Battery, instead relying on the grid, would require a battery with at least 13 kWh of usable capacity (being the daily usage of 20 kWh x 65%). It’s no coincidence that 13.5 kWh happens to be the capacity of the Powerwall 2 – the market leading Home Battery! How long does a Home Battery last?
Most Home Batteries will be backed by a 10-year warranty that guarantees at least 70% of the original capacity. However, you should further consider the brand to ensure they have an established presence in Australia to help ensure that they will stand behind any claims. It is too early to tell Home Batteries will perform beyond the warranty period, however based on the experience of some of the early model Tesla’s there is an expectation, at least with the Tesla batteries, that they will last a number of years beyond the warranty period. Will my Home Battery work during a grid outage?
The majority of Home Batteries should have the ability to operate in a grid outage. However, you should confirm this with your installer prior to purchasing. |
FinancingHow much do Home Batteries cost?
The cost of a Home Battery system is influenced by several key factors including: the cost of the battery; installation costs; and Inverter cost (if required).
A high-quality, appropriately sized battery with reliable warranty support will typically cost somewhere in the region of $15,000 (inc. installation). Be cautious of offers that promise significantly lower prices, as these may use substandard products or provide a poor-quality installation. If an offer seems too good to be true, it probably is. Expect to pay at least $1,000 per kWh of storage capacity. 
How much will I save on my electricity bill? What is the payback period?
There is no one size fits all approach to calculating the financial return on an investment in Home Battery Storage. It is dependant on a number of factors including your power consumption (total power used and at what times of the day it is used), the size of your solar system, the availability of retail plans offering cheap or free grid consumption (for days when there is insufficient solar), what grid rates you pay for power used from the grid, especially during peak periods.
However, for illustrative purposes presented below are three examples:
How can I finance the purchase?
Presented below are some examples methods to finance the purchase of your Home Battery.
Cash Simply pay for the battery from any cash savings, providing you with full ownership of the asset. Buy Now Pay Later (BNPL) Some installers have teamed up with BNPL providers such as Humm to offer interest free payment terms up to 72 months on solar and battery installations. However, be aware as even though such offers are advertised as interest free they often have establishment fees and monthly account keeping fees. Humm’s website implies a one off establishment fee of $110 and a monthly account fee of $8 – or a total of $686 in fees over 72 months. Use your existing mortgage If you have the capacity then an option is to utilise your existing mortgage facility to fund your purchase. CBA’s online home loan calculator implies that the addition of $14,000 to a mortgage with an interest rate of 5.5% and a term of 5 years would increase monthly repayments by $268 with total interest charged of $2,045. Personal loan Another option is to use a personal loan. Two providers offering personal ‘green’ loans include Brighte and Plenti. However, this is likely to be a more expensive option than utilising your mortgage or BNPL. Plenti is advertising rates from 10.6% p.a. and Brighte from 10.48% p.a. Such interest rates, over a 5 year term, would result in monthly repayments of approximately $398 and total interest paid of $3,848. Some alternative ways to finance your battery include: Upfront discounts from retailers Some retailers, including Origin and AGL, are offering discounts to the upfront purchase price of a battery when combined with a solar system and purchased from them. Origin is advertising a $1,500 discount and AGL a $1,000 discount. But such offers come with a number of downsides and there is a good chance that they will not be financially beneficial over the long term.
Non-customer owned Some new market entrants, like NRN.com.au, offer solar and battery systems at no upfront cost to homeowners. Instead, the homeowner buys the power generated by the system, typically at a rate lower than what they would pay for electricity from the grid. The homeowner may then take ownership of the system after a defined period of time or after a lump sum payment. It is hard to estimate the financial impact of this method of financing over the life of the battery as it depends on a number of variables. However, if other options are out of your reach this could give you a path to ownership of a solar and battery system. 
What rebates are available?
Below is a summary of the current rebates and incentives available for Home Batteries:
OtherHow much carbon will I save?
Installing solar panels and a battery system can reduce your home's direct CO2 emissions by approximately 41%. However, these technologies lay the foundation for achieving near-zero emissions by supplying the renewable energy needed to electrify your home and transportation.
What is a Virtual Power Plant or VPP?
A VPP is an interconnected network of smaller energy resources that are centrally controlled and that can be coordinated to act as one united energy source. An example of this is an Energy retailer, e.g. AGL, controlling the Home Batteries of its customers. AGL may choose to dispatch energy from its customers batteries to the grid at times when electricity is in high demand, or to charge batteries when prices are cheap or even negative. In return the retailer normally offers some form of financial incentive to the customer e.g. a one-off payment, a discount to the purchase of the battery system or regular bill credits. Should I join a VPP? The main disadvantage of joining a VPP is that you are handing over control of your Home Battery to someone else. What they do with your battery may not be in your best interests. For example, they may excessively charge and discharge it which could shorten its lifespan. They may charge the battery from the grid overnight when the grid is almost exclusively coal, thereby increasing your household’s carbon footprint compared to charging the battery during the day. You may also be left without battery power when you need it if your retailer has discharged your battery. You should analyse market offerings for VPPs carefully before committing to one. The lock-in period can span many years with some, and the financial benefits can be minimal, or even negative, when taking into account the extra wear and tear on the battery and the loss of control. What about Vehicle to Grid and Vehicle to Home if I have an EV or thinking of buying an EV?
Vehicle-to-Home (V2H) and Vehicle-to-Grid (V2G) technologies enable EVs to supply power back to homes or the grid. In V2H, EVs can provide electricity to a household, acting as a backup power source. V2G takes this a step further by allowing EVs to contribute energy to the electrical grid, helping to balance supply and demand, and support grid stability. Both technologies leverage the battery storage capacity of EVs. Where is this technology at? Unfortunately this technology is in its infancy in Australia. Some states have allowed trials to take place but only for EVs that utilise the CHAdeMO charging standard. The Nissan Leaf and Mitsubishi PHEV are the only two vehicles utilising CHAdeMO in Australia, and these cars represent only a small portion of the overall EV market. The vast majority of EVs use CCS and this has not yet been approved for V2H or V2G in Australia. The timing for approval remains uncertain. Additional challenges arise from car manufacturers, many of whom do not offer V2H or V2G capabilities. For those that do, the power output is often limited and may not sufficiently meet a home’s energy needs. However, this situation is expected to improve in the medium term, particularly if Tesla, the leading brand in the market, integrates this V2H/V2G functionality into their vehicles. Additionally, the current cost of a V2H or V2G-compatible charger is around $10,000, meaning the cost of the charger alone is not too dissimilar to that of a Home Battery. |
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