New South Wales’ long-awaited home battery incentive will open to applications on Friday, promising to take up to $2,400 off the cost to consumers of investing in solar storage and offering $500 rebates to battery owners who join a virtual power plant.
The incentive aims to drive the uptake of home batteries in the state where rooftop solar installations recently passed the 1 million mark – and which consistently leads the nation in the addition of new distributed PV capacity.
Officially dubbed the Peak Demand Reduction Scheme, it recognises the importance of energy storage of all shapes and sizes in a state that is desperately trying to kick coal, while also trying to better manage huge amounts of solar flooding the grid during the middle of the day.
The scheme is not a rebate, but rather offers a discount on the upfront cost of a home battery, proportional to the battery’s kilowatt-hours (kWh) storage capacity – the bigger the storage capacity the better the discount.
According to the NSW government website, eligible households can get a discount of between $770 and $1150 when they install a new 6.5 kWh battery, but the discount jumps to between $1600 and $2400 with a new 13.5 kWh battery.
The incentive launches this week nearly five months after it was first announced by the NSW Labor government, a time-lag that has been heavily criticised by industry for stalling the market while customers waited for the discount.
Back in April, this effect was immediately felt in the industry, with companies sharing stories of orders being cancelled and of sales leads drying up.
Questions also arose over the design of the scheme, including the range and size of batteries that would be eligible, the eligibility criteria for households, and the layers of complexity rendered by the number of parties involved in its governance.
At the time, Smart Energy Council called a snap “crisis meeting” that was attended by more than 150 members.
As it stands at launch, the NSW Peak Demand Reduction Scheme (PDRS) is designed to give an upfront discount to the accredited supplier that installs the eligible home battery, which is then it is passed onto the customer.
A total of 10 accredited suppliers, or Accredited Certificate Providers (ACPs), have been selected by the scheme administrator (IPART) to install new home batteries under the PDRS, while four ACPs can connect existing and new batteries to a VPP. (See ACP list below.)
A broad range of batteries between 2-28kWh are eligible for the scheme – around 90 per cent of the current market – having being accredited by the Clean Energy Council.
The 2kWh minimum will likely remain a point of contention in the industry, over concerns that it will encourage the installation of systems too small to be of any use in virtual power plants or in supporting all-electric homes with large solar systems and electric vehicles.
“What it’s going to do is to probably encourage a lot of dumping of the really cheap, small… batteries, to maximise the rebate, as opposed to going with good quality batteries, which are going to give consumers … a much better outcome and return for the long term,” Solar Edge’s James Sturch told One Step Off The Grid sister site Renew Economy in April.
Sturch, who worked with Sonnen’s home energy storage business in Australia before becoming technical director at SolarEdge, said at the time that there was little to no industry consultation on the design of the scheme.
“It’s a real shame, because it’s not going to deliver the results that I’d have thought that New South government actually wants,” he said at the time.
The SEC, which has worked hard with the Minns government to address industry concerns about the scheme and get its design right, says there are bound to be some teething issues once it launches, but that it is much improved on what was initially proposed.
“The PDRS scheme will help more NSW households take charge of their own energy,” SEC chief John Grimes said on Thursday.
“Battery booster programs are a no-brainer for people trying to cut their rising energy bills during a cost of living crisis, and we want to see more of them.
“Aussie households are doing the heavy lifting with rooftop solar, decarbonising our economy, the addition of batteries is a logical next step.
“Allowing people to store the energy they create on their roofs will ease the pressure on the grid during periods of peak demand.”
Industry and consumer advocacy group, Solar Citizens, says the new incentive shows the NSW government is taking consumer energy resources seriously.
“The rollout of coordinated, behind-the-meter batteries can democratise our energy system, by saving and storing excess solar power generated on our rooftops during sunlight hours and feeding that energy back into the grid when it’s needed,” Solar Citizens CEO Heidi Lee Douglas said this week.
“We need all states and territories, and the federal government, to provide similar financial incentives to massively increase the number of behind the meter batteries in the system and make electricity cheaper for everyone,” she said.
“Australia’s home solar uptake is world leading, and we need to marry this solar uptake with batteries so we can use the cheap, clean energy day and night and replace our aging coal fired powered stations.”
Find more details on the Peak Demand Reduction Scheme (PDRS) here.
Accredited suppliers:
- 4Eva Energy: www.4evaenergy.com
- Creditex: www.creditex.com.au
- EC Focus: www.energyconservation.com.au
- Ecovantage: www.ecovantage.com.au
- Electric Future Sustainability Services: www.electric-future.com
- Greenbank Environmental: www.green-bank.com.au
- Mac Trade Services: www.mactradeservices.com.au
- National Carbon Bank of Australia: www.nationalcarbonbank.com.au
- Trade In Green: www.tradeingreen.com.au
- Virtual Power Co: www.virtualpowerco.com.au
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
