The Government has released information on its Cheaper Home Batteries Program. This post outlines the rebate criteria and helps you assess whether installing a battery is worth it.
Before you read on, CyberShack has amassed considerable expertise in rooftop solar. If you are considering solar, you might like to read Parts 1, 2, and 3.
Cheaper Home Batteries Criteria
- You must have rooftop solar panels, although the legislation does not specify the kWh generation capacity. There is no point in paying for a battery if you can’t charge it, e.g., exporting at least the battery capacity each day.
- Minimum battery size is 5 kWh (kilowatt hour) and maximum is 50 kWh.
- A battery system and the inverter must be listed on the Clean Energy Council (CEC) approved Battery product list and Inverter list.
- The battery must be installed by a person accredited for battery installations by Solar Accreditation Australia (SAA).
- Rebates are based on the new kWh usable capacity.
- NSW has cancelled its battery rebate scheme. The NSW VPP scheme still operates for >10 kWh batteries.
- A battery system (including an inverter) installed on-grid must be VPP-capable. Many existing inverters are not.
How much is that worth?
Each STC is worth $40. For example, a 5 kWh battery x approximately $372 = $1860 rebate. The rebate reduces annually over the scheme’s life. The consumer cannot buy a battery outright, only get an installed price, so it likely will not reflect the full discount after install and administrative costs are included. To be clear, you probably won’t receive anywhere near 30% of the battery cost.
| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 |
| Estimated value per kWh | $372 | $336 | $296 | $260 | $224 | $188 |
| STC factor | 9.3 | 8.4 | 7.4 | 6.5 | 5.6 | 4.7 |
What is the VPP issue?
Battery systems installed on the grid must be on the CEC-approved product list and able to be coordinated through a virtual power plant (VPP).
This includes the ability to connect to the electricity grid, respond to signals from third-party VPP operators, and maintain an ongoing internet connection. That capability may include a new inverter and other requirements to be met to participate in a VPP, even if you choose not to.
While it is not mandatory to join a VPP, the fine print states:
Additional requirements may be developed to ensure ‘VPP capable’ reflects technical and consumer expectations over time.
That is double-speak for potentially making VPPs mandatory if you have a battery.
According to the recent data from SunWiz, consumers remain unconvinced, with most VPPs currently registered with the AEMO to provide grid services remaining small, while others have gone backwards or been wound up.
Read VPP – Beware of the solar battery trap
Other costs
Currently, door-to-door hawkers and call centres are selling a new 5 kWh (or more) battery system on the basis that you get a 30% discount from the government. My neighbours have solar panels but no battery, and have already turned away five hawkers.
They like to play games with the hawkers and know that their system is not battery upgradeable without a new inverter and cabling, and they don’t have internet. They also know that the battery must be at least IP69, marine environment rated, and use LiFePO4, not Lithium-ion.
The cowboys all say there is no problem. Sign here!
You should consider your options and compare the benefits and costs of installing a new or expanded system. This includes:
- Electrical wiring upgrades
- Compliance with current standards
- Operating efficiency
- Hidden costs of changes or upgrades
- Impacts on feed-in tariffs.
- Battery quality – do you want a 5, 10 or 15 usable life?
- Environmental issues
If you are expanding a system, you may need to replace or upgrade components of your system to participate in the scheme. If you have previously received STCs, you are not eligible for additional STCs for replacements.
Batteries are not all the same
The CEC list includes about 600 brands/batteries/models and variants. It includes batteries whose approvals will expire in 2025. It does not discriminate between Lithium-ion ‘bombs on the roof’ and the vastly safer Lithium Iron Phosphate 4 (LiFePO4). Nor does it specify battery life, guarantees, IP ratings, or whether the batteries can be used in marine environments.
But a hidden issue is how that battery works. For the most part, the battery app does not speak to the inverter app—it is a dumb fuel tank. Having an app that covers the whole system is a huge advantage.
Is it worth it?
Let’s assume that a 5 kWh battery costs about $5,000 after the rebate. We won’t account for finance costs, and paying extra for inverters, etc.
Now, 5 kWh is DC, and that needs to be inverted into AC. Most inverters are around 80-85% efficient, so you get 4000 watts for an hour, which might run your home with a fairly meagre 500 to 1000 watts/hour base load for four to eight hours overnight. Base load is how much energy you use, such as lights, fridge, TV, etc., and excludes cooking appliances, cooling/heating, hot water, and washing /drying.
Call that your fuel tank. Energy when the sun shines to fill it is free, but energy from the grid is damned expensive.
The following figures are based on selling 4 kWh (the entire AC battery capacity) to the grid every day at 5c per kWh. At that rate, it would take 68 years to pay off that battery!
The real value of a battery is its use in a blackout or when the sun does not shine. It means you are using them mostly when you would pay peak and shoulder rates. In NSW (these are Origin Energy prices), the time of day peak rate is 65 cents per kWh, shoulder is 35 cents, and off-peak is 27 cents. Then there is the totally unavoidable $1.12 daily supply charge.
- Off-peak payback: 12.68 years
- Shoulder payback: 9.78 years (typical battery life is 8-10 years)
- Peak payback: 5.27 years
Energy prices will continue to rise, but the dynamics won’t change much.
To summarise, you pay $5000 for a battery, and if you sold its entire storage every day, you would never make a profit before it reaches the end of its life. If you look at the current economics, you will never buy a battery.
Why buy a battery?
I guess I am asking this to justify my installing 10 kWh of batteries at an approximate cost of $15,000😒.
- Backup for blackouts: The batteries have about 10 hours of base load. If I just ran the fridge/freezer, I may get 24-30 hours. ✅
- Clean electricity: The pure sine wave from the Enphase microinverters is better for my equipment than the dirty AC grid power. ✅
- Environmentally conscious: It helps to reduce carbon emissions. So far this year (five months), I have reduced C02 emissions by 3.6 tonnes and sent 2.4 mWh (2400 kWh) back to the grid (at a lousy 5 cents or $120 for 5 months). ✅
- Feed-in tariff: At 5 cents per kWh, that is a big, fat❌.
- Night use: To save about $5 for overnight use (and that is closer to 10 kWh), that has a payback period for me of 8.2 years. ❌
- Self-Sufficiency: To eliminate grid energy, I would need 15 kWh of batteries, but they would still charge $400 per annum for the daily supply charge, and an extra 5 kW battery payback would be 7.8 years ❌.
- Charge an EV (which I don’t have): A Tesla Model 3 has about a 50 kWh battery for about 500km (some are up to 100 kWh) and takes about 8 hours to charge at 7 kW per hour. Charging it during the day from solar power is no issue when it is sunny, but at night, it would exhaust the 10 kWh batteries in less than two hours ❌.
What it confirms is that unless battery technology radically improves and costs come down or grid electricity prices increase beyond comprehension, the payback time is going to stick around 10 years. ❌
CyberShack’s view: The Cheaper Home Batteries Program won’t be of great benefit to anyone
Sure, it is nice to get a battery a bit cheaper, but you really need to do your sums and understand your energy use before you outlay the big bucks.
If you are a small household and only have a low baseload of 500- 600 Wh (to run lights, fridge, and TV at night), your payback will be longer than the battery life.
If you are a large user with a baseload of 1- 2 kWh, you will get marginally faster payback, but you will need more batteries.
If you are an energy hog and run a ducted AC system, you could be using an extra 4- 5 kWh every hour. You would need 60 kWh of batteries just to do that.
Of greater concern is that the Cowboys are already hard-selling and using completely fabricated figures to win over people.
Confused – I was
There are so many schemes and different tariffs that it is almost impossible to compare (and don’t get me started on those shonky comparison sites). I tend to be a visual person so I simply used Excel to visualise the tariffs – it took minutes.
Down the left side, 1 to 24 is the time from 01:00 to 24:00.
The green is for off-peak tariffs, yellow for shoulder and red for peak. The top figures are the recommended base rate, and under that is the discount offered for 12 months.
Finally, this is broken into columns – Summer, Autumn, Winter, and Spring and weekdays and weekends. ‘Simples’ as far as I can kick those bloody meercats.
When you install rooftop solar, you start to understand that energy-hungry appliances like washing machines, dryers, and dishwashers should be put on after 10 PM because they will use whatever is left in the battery, and then the off-peak rate. If you need to recharge the battery due to rain or overuse, do it after 10 PM because 10 kWh only costs $2.70 ($2.30) versus $6.50 at peak rates.
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Rooftop solar owners should look at their app regularly to see what rooftop solar is doing
36 comments
Robert
I’m one of the many who has been looking at adding a battery to my solar installation. While Batteries last past 10 years their warranty generally only goes for 10. For many years I’v been watching the cost of batteries come down and ( and in some cases go up).
I am now considering moving from gas to an all electric house. This means installing an induction cooktop and heater, both of which draw a lot of power and a new stove. During winter, when heating is a big expense, my solar system won’t be able to re-charge a battery during the day unless we are away from home. The same could apply in summer if I did run the aircon during the day. This means that I’m unlikely to get the full ROI over 10 years, making a battery uneconomical, even with a Govt. rebate.
The best thing I can suggest to anyone is to track all your solar and grid energy over say a 12 month period to get a good look at what type of ROI you can get. With FIT’s going lower from 1/7/25 it is better to make sure you can use as much solar energy as possible during the day. I also noted that the talk during the year of being charged for feeding in excess solar back into the grid during the peak of the day has quietly disappeared. I wonder if it will come back once everyone has got use to their new electricity rates from 1/7/25 !
Ray Shaw
Excellent sage advice – thank you. We have a 5kW ducted AC unit, and frankly, that drains a 10kWh battery in two hours, not nearly enough for overnight use in summer. I am hearing that even 20- 30 kW systems and batteries are struggling for these all-electric homes.
CharlieQ
We’ve had 5.4 kW solar for 12 years and after the last election, I’ve signed up for 14.2 kW solar, 32 kWh Sigenergy battery, 12 kW inverter, gateway and AC EV charger. Everything costs 22K after rebate. We also got the Victorian interest-free loan so I’m only out of pocket ~11K. I worked out the battery rebate is actually 45% for my brand and battery size.
By switching from central gas heater to split systems, we should get our money back after 6 years.
Ray Shaw
Thanks Charlie
It is real feedback from a real user that helps people decide. But remember you are a ‘power user’ and you will benefit more than Joe and Jane Average.
CharlieQ
We are not ‘super user’ per se but just a large household. For years, we were paying an extraordinary amount for both gas and electricity so one day I decided to scrutinize our bills. When our gas hot water system died last year, it was a no brainer to switch to water heat pump. I was shocked to see our gas bill dropped from $5-7/day in summer to $1.3/day.
A decision was made to switch to solar, EV and battery storage. These changes enable us to put the power back in our hands (punt intended)! So instead of paying for energy bills, we are paying upfront for our system now but will be energy self sufficient down the track.
Ray Shaw
You bought for the right reasons – to help with blackouts and self-sufficiency. You can’t put a value on that. What we are finding is that if your energy bill is $4,000 plus a year, then it makes great sense to go rooftop solar and a battery. The only remaining issue is to weed out the coyboys and has been sports celebrities promoting the worst possible gear.
CharlieQ
Yes, I took 6-8 months before deciding on a local installer. During that time, I read many reviews from multiple sources. I read the 1 star reviews first and yes, a lot of them are just the middle man providing services like Uber or Air BnB.
Ray Shaw
The unfortunate part of this is that reputable local installers are being driven to the wall by these shonks. It seems that honesty and solar installers are mutually exclusive terms (apologies to the ever-decreasing number of honest installers). I have begun to hear of these larger celebrity-fronted sales organisations buying up the assets of reputable installers as they get out of the business, and the hoops they put owners through to get warranty and support. One reader reported that his installer went broke and the new owner (a biggie) wants to charge $2400 upfront for annual inspection and cleaning costs just to honour the warranty.
Elias
Pretty good read! Thank you.
Just to throw my 2cents and the biggest reason we got a battery. We were with Origin energy and had massive problems with them, despite having 36 panels, our usage just kept going up and up, to 1500kw!!! Something was wrong and we had 0 help from them. Solar exports were rubbish as well. Mind you, 2 person household with minimal appliances as we were only living there for 3-4 months. Switched to Amber and saw my monthly bill cut by nearly 50%. When I saw the volatility on some days where prices would home up to $20kw, I decided to get a battery. Single phase, 13kw Sigenergy. LOVE IT! Solar charges battery and powers the house during the day and then powers the house at night. The battery will generally last us until midnight or even the next morning, depends how much cooking we do (no gas).
The beauty of this is, when those prices spike, so does the exports. It’s not rare that these spikes happen, it really just depends on the grid. We could easy make $100+ in 2 hours from exporting and still have enough juice in the tank to power us through the night. We’re just mindful of turning off power hungry appliances.
I’m now even looking at expanding the battery.
Ray Shaw
I must look into the Amber scheme. It appears to offer the wholesale rate benefits for VPP exports. But you hit it on the head. ‘Solar charges battery and powers the house during the day and then powers the house at night. The battery will generally last us until midnight or even the next morning, depends how much cooking we do’. Self consumption should be the only driver.
Don Hannay
Great article Ray. We are investigating a domestic VPP which involves changing supplier (Origin) to allow wholesale power price exports. The idea is good but by my reckoning the ROI is low if using $ as the measure. As retires, we would break even about the time of our funeral.
Ray Shaw
Read https://cybershack.com.au/off-grid/vpp-part-2-maybe-not-a-great-idea/ and you will see teh results of a deep dive into all the VPPs and a downmloadable spreadsheet of all terms.
Tim Newman
I’m an electrical engineer by profession and am old enough to remember when solar first got the scene in the early 2000s.
It’s never really been affordable or provided a decent ROI. even in the days of 44c tariffs. People never factor in what the spent $ would be doing for them if not used for the purchase, and they always over estimate the life of the hardware.
Long heated debates from dozens of engineers over a proper life cycle cost analysis have concluded that the ‘benefit’ is a smaller carbon footprint. But even that is debatable knowing what goes into manufacturing. The cynics suggest this is nothing more than class division and taking demands from government infrastructure and pushing it on the public.
AND those who can’t afford the up front costs, benefit the least. The rich can potentially benefit the most.
Ray Shaw
Hi Tim
It is clear that you know about cost/benefit analysis, and no one can or should argue with that. Had I not had the discretionary funds available, and readers were crying out for clarity, I doubt that I would have bothered. After all, a 10-year payback when the asset is either at the end of life or close to it does not make sense unless it is your forever home and you will live long enough to benefit. But having made the switch and having seen energy price rises this year of 13-19% I think that the payback period will reduce. I don’t know what happened to the promised $275 reduction in bills by 2025. I have seen a 49% increase since 2020. And don’t get me started on the 5c feed-in tariff – it is an insult and a joke. The real answer is that the government gets its Paris accord credits at the taxpayers’ expense. And as one reader pointed out, there is a huge carbon emission cost in making panels and batteries that we all ignore (because it is not well known). Add to that the coyboys who install systems at the wrong pitch or orientation resulting in poor energy efficiency and the cheap inverters and batteries and this willl all end in tears.
James Pipe
The Cheaper Home Batteries Program policy paper clearly states that “A battery in an on-grid system must be capable of being coordinated through a virtual power plant (VPP), but does not need to be connected to a VPP.”
It is a voluntary thing for sure.
I reached out to a battery installer in my area to confirm it.
“It is mandatory to have a VPP capable battery but participating in a VPP scheme offered by your energy retailer is voluntary.”
From FAQ section of their page:
https://ipromiseaustralia.com.au/federal-battery-rebate-australia/
Ray Shaw
We made that clear in the article. What concerns me is that the government has yet to develop a policy on VPP. Knowing how it likes retrospective policy, I would like some clarity.
Aaron
I have purchased a FoxESS EQ4800 41.93kwh battery + an extra 9.68kw solar system + FoxESS 10kw hybrid inverter + full house backup and fail over, with a powston inverter controller for selling to the wholesale market. All together this will cost me $13,800, with roughly $17,000 in rebates with the solar and battery rebates combined.
This would be an absolutely idiodic decision without a rebate, but a no-brainer with it. I wouldn’t be so quick to write off the rebate, and encourage people to look at brands that aren’t the top 3. The biggest risk is FoxESS doesn’t have a big presence in Australia yet, but with a 10 year warranty I’m not too worried about a complete failure. The tech itself is proven and popular in the UK.
Ray Shaw
Thanks for the extra information. Comments are all about that, as we can’t know all the sources.
Mr Ian J Draeger
Would using an EV that has Vehicle to grid capability be a better solution than using a regular battery? The solar panels would charge the car during the day and the car would power the home at night. The car battery is much larger and would easily power a household all night. Not all EVs have this capability but some do.
Ray Shaw
I don’t have any experience with vehicle-to-home (V2H), but in theory, you have approx 50 kWh DC to use at night. If your night base load is around 1- 2 kWh AC per hour (using 15- 30 kWh DC after the inverter converts it to 12- 24 kWh AC in total), it should work. You will need to purchase bidirectional (V2G) EV charging equipment that’s compatible with your EV and compliant with Australian Standards for a grid-connected inverter. Bidirectional charging equipment currently costs many times more than normal EV charging equipment. We understand that two drawbacks are that it shortens the life of the EV battery as you are using a recharge cycle each day, and there are extra costs with cabling and inverters. As far as we are aware, very few EVs are certified for V2H in Australia. There is a good overview here https://www.solarchoice.net.au/ev/charging/bidirectional-v2g-v2h-v2l
Ian Hogan
If I put my purchase money for a battery in a term deposit the interest will help make up for the gains that the battery will give.
In the ten years life of the battery I still have my purchase money.
Ray Shaw
Clever question. Assuming term deposits are 5% (big assumption) and you pay $5,000 that amounts to $8200 i 10 years at compund interest. The batterery is a better investment if it saves $5 per night (big assumption) for 10 years of $18250. Now assume the battery is worth nothing by then you are still $13250 ahead.
Jeff
A perfect explanation of the way people get easily duped by smooth talking politicians and businesses with financial interests in conning the layman with little or no knowledge of the electricity game.
Well explained and thank you.
Ray Shaw
Our pleasure. Wouldn’t the world be wonderful if politicians put people first instead of spending our money on schemes that seldom achieve anything for anybody?
Mike Page
WOW…. Given I am 77 yo and have NO solar and after reading all of the above, it would appear that the only beneficiary of a battery/solar installation would whoever becomes the the owner of our house when we either leave this mortal coil or are dragged out kicking and scratching to be installed in a nursing home.
Not a satisfactory end solution for us at all. Oh well, back to the blankets and candles for us then.
Luigi Di Benedetto
More information
Ray Shaw
Hi Read https://cybershack.com.au/off-grid/vpp-part-2-maybe-not-a-great-idea/
Ray Shaw
I feel your pain. Yes, solar is a long-term investment and really only for your forever home. However, now I have a 10kw system and battery, I am determined to be more energy-wise and use grid power only when it’s cheap. Even at 25 cents off-peak there is something wrong when they only pay a 5-cent feed-in tariff.
Peter
Do you think the rebate scheme will expire? If so, then an investment now might increase the value or attractiveness of your home.
Ray Shaw
It will be scaled back from $372 per STC to $188 by 2030. I believe that solar and battery increases your homes value but by how much? The home market is very volatile and who knows if it won’t simply be expected in a few years time.
Joe Gorman
I am in my eighties and still reasonably tech savvy. When I built my house 50 odd years ago I made one phone call to the only electricity supplier and was connected to and paying the same rate for electricity as everyone else until our “o so humble to represent us” elected representatives fed us into the hands of the big end of town and a host of snake oil companies who run such a complex system of *CONDITIONS APPLY” that you need to consult an actuary before signing up to an agreement that you still don’t understand and which they can alter at any time to suite themselves. You then have to constantly be aware that if you don’t review your supply contract on a regular basis, you will probably end up on their default rate. Or should I say, “RIP OFF” rate. Buying your electricity now has come down to the same exercise as monitoring your pantry cupboard to ensure you have enough bread and milk.
Recently I moved house and installed 13.3kw of solar panels. I should be so thankful to those same elected leaders who gave me almost $4000 towards the cost but I feel some guilt because it wasn’t their $4000 to give. They have no money – it came out of the pockets of people who pay their taxes, can’t afford to put solar on their roof and might also be renting and are struggling to pay their electricity bills.
Andy
Thanks for the article Ray. I have signed up for 24kw 3 phase sigenergy battery system. Approx cost incl fed subsidy of $14.5 K. Gives full house backup and ability to charge battery when grid is down, a key requirement for us in bushfire area. An additional potential benefit comes if using Amber energy for wholesale pricing, can sell excess power to grid when prices are high, charge battery when prices are low. Can change the ROI if that’s important to you . Cheers Andy
Ray Shaw
You are one of the lucky 3-phasers… That is a very good price for 24kWh. And you realise that emergency backup is your priority.
Ray Shaw
I wish more people understood that governments don’t make money; they spend our money. I received STCs, which reduced the price, but I really feel that all STCs have achieved is to raise the price of the panels, batteries and inverters to give the solar food chain more profit.
Mark
I am an avid listener of your show on 3AW. In your article on batteries you state as an advantage “ Environmentally conscious: It helps to reduce carbon emissions. So far this year (five months), I have reduced C02 emissions by 3.6 tonnes and sent 2.4 mWh (2400 kWh) back to the grid (at a lousy 5 cents or $120 for 5 months). “
My question – does that calculation take into account the carbon emissions that would have been generated by manufacturing and transporting the battery from say China?
Keep up the good work
Kind Regards Mark
Ray Shaw
No, Mark, it does not, and that is the dirty little secret that we would love to know the answer to. It is on my agenda to dig more into this.