Federal Labor and its Western Australia state government counterpart have announced that their respective home battery incentive schemes will be merged to work in unison – but not in the way many might have hoped.
Rather than allowing applicants to stack the two rebates to get a double discount on a home battery, a merging of the two schemes will instead mean around five times as many WA households will be able to access the state rebate, which ranges from between $5,000 to $7,500.
In a joint announcement on Tuesday afternoon, federal energy minister Chris Bowen and WA premier Roger Cook said an estimated 100,000 solar households would benefit from a combination of the $337 million state Household Battery Rebate and the $2.3 billion federal Cheaper Home Batteries program.
“This will ensure around five times as many households than originally proposed under the state scheme can seamlessly access the complementary schemes,” the statement says.
Households with incomes of less that $210,000 per annum will also be given access to zero interest loans of up to $10,000 to help cover the remaining cost of adding a battery.
Western Australia’s Residential Battery Scheme was unveiled at the official launch of the state Labor election campaign in February, with the original goal of underwriting more than 200 megawatt hours (MWh) of small-scale storage – the equivalent, Cook said at the time, of the first stage of the state-owned Kwinana Big Battery.
Boosting the scheme fivefold would, then, presumably mean underwriting more than 1,000 MWh of small-scale storage, or one gigawatt-hour.
With Cook and Labor re-elected in March, the WA rebate is due to come online at the same time as federal Labor’s – from the start of July – offering Synergy customers up to $5,000 off the cost of a battery and Horizon Power customers, in the regions, an up to $7,500 discount.
And while some households will undoubtedly be disappointed that they cannot stack the two rebates – taking discounts closer to $9,000 and $11,500 – the decision to pool resources and expand the offer makes a lot of sense.
WA hosts one of Australia’s most rooftop solar soaked grids, with electricity from mostly consumer-owned systems accounting for a record 80.5 per cent share of generation in that state’s main grid at one point in November last year, and consumers adding around 200 MW of new capacity a year.
This makes the addition of storage – of all types and sizes – a rather urgent matter. Already, the market operator and the state government have signed contracts to see half a dozen new big batteries built to soak up rooftop solar in the middle of the day and re-inject it into the grid in the evening peak demand periods.
WA Labor had expected the home battery rebate and loan scheme, as originally announced, to more than double the number of residential batteries currently installed in homes across the state. Its reach, now, should be much, much greater.
“We know WA’s booming economy and growing population means we will need an affordable and secure supply of energy going forward – and the WA Household Battery Rebate will mean households play a central role in meeting that need,” Cook said on Tuesday.
“This will do more than lower emissions. It may also support local battery manufacturing, which is crucial to my vision for a future that’s Made in WA.
“Not only that, it will provide households the opportunity to secure WA’s energy future and earn financial benefits for doing so.”
“West Australia’s household solar uptake is world leading and getting more batteries soaking up our sunshine will be good for bills and good for the grid,” Bowen added.
“And now working with the Cook Labor Government we’re making sure a record number of homes, small businesses, schools and community facilities here in WA can slash their bills too.”
Industry, which has been watching for announcements of how the various states with their own battery rebate will manage the federal offering, seem happy with the outcome in WA.
“This is a great step forward for the smart energy industry and for consumers,” said Smart Energy Council chief John Grimes on Tuesday.
“Combining the state and federal rebates will enable up to 100,000 Western Australian solar homes to take back control of their energy bills.
“It’s important to note that the federal government’s generous Cheaper Home Battery Program could enable many more homes to get a discount beyond the duration of the state rebate.”
The VPP imperative
The federal battery scheme requires discounted energy storage systems to be virtual power plant (VPP) compatible, but leaves it up to households whether they sign up to a VPP or not.
By contrast, solar households are required to participate in VPP to be eligible for the WA scheme, with the promise of “attractive feed-in tariffs” in return for sharing their stored solar with the grid through a third-party aggregator.
“Through VPPs, households can sell energy stored in their battery back to the market – helping to decarbonise WA and bolster energy security, while offering financial benefits through above-average feed-in tariffs,” the joint announcement said on Tuesday.
Considering how slowly consumers have warmed to VPP participation in Australia, so far, this could be a deal-breaker for some. But, again, industry appears to be happy with the rule – at least in the case of WA, which is one of the world’s most isolated grids.
“This means their battery will work alongside thousands of others across the state to help manage energy demand and supply,” the Clean Energy Council (CEC) said in a statement on Tuesday.
“By working together in this way, the batteries help reduce pressure on the electricity grid and avoid the need for costly upgrades, making better use of the existing poles and wires as more rooftop solar power flows through the system.”
The CEC’s general manager of distributed energy, Con Hristodoulidis, compared the use of VPPs to incentivising drivers to use a freeway during off-peak to avoid the disruption and cost of building more lanes.
“Having more home batteries installed and connected to VPPs means that they store energy from rooftop solar during the middle of the day [and] can be used during the evening peak, leaving more capacity in the grid for other energy customers,” Hristodoulidis said.
The SEC’s WA general manager, Charlie Caruso, says a contestable VPP market under the new state battery is to be congratulated.
“Enabling customer choice, interoperability, and third-party participation is exactly what’s needed to unlock the full value of consumer energy in Western Australia,” Caruso said on Tuesday.
“This is a critical signal to industry that WA is serious about building a flexible, resilient, and consumer-empowered energy system — and we welcome the clarity and ambition embedded in these reforms.”
Sophie is editor of One Step Off The Grid and editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
