Home battery rebate up to $2,400 unveiled, one day after deal to keep coal plant burning

The New South Wales government has announced a home battery rebate that will shave up to $2,400 off the cost of adding storage to existing rooftop solar systems, and reward battery owners for joining virtual power plants.

The move to help households further rein in their energy bills comes just one day after the Labor Minns government revealed that NSW taxpayers would foot the bill of up to $225 million a year to keep Australia’s largest coal plant burning past its use-by date.

As Giles Parkinson writes on Renew Economy, the long anticipated and controversial deal with Origin Energy is being sold as necessary to “keep the lights on,” while offering no guarantee that the ageing plant can actually achieve this goal.

The broadly unpopular move has, in particular, angered consumer and electrification advocates who have long called for the subsidisation of home battery storage as the best, fairest and cheapest way to boost the reliability of the NSW grid.

A day later, they finally got their wish.

“This is a targeted action to support those with solar to take the next step to lowering their bills by using renewable energy. It also supports the state’s transition to renewable energy,” said state energy minister Penny Sharpe on Friday.

“More than 1,000,000 NSW households have solar panels on their roofs and adding a battery will see them benefit around the clock, not just when the sun is shining.”

The rebate, part of the state’s Peak Demand Reduction Scheme, offers a discount of between $1600 and $2400 on the up-front installation cost of a household battery for homes and business with existing solar.

For those homes and businesses also wanting to install solar, the government says the incentive “will be considered in the quote for a new solar and battery system installation.”

For those who have already forked out for a solar battery, a $250 to $400 incentive is on offer for connecting to a virtual power plant – and this can be claimed a second time, three years on, the government says.

The incentives will be available from November and will be accessed through approved suppliers, which will be accredited through the scheme between now and when the rebate opens.

Rewiring Australia, one of those groups tirelessly advocating for targeted government support for consumer-focused energy solutions, says the incentive will remove the financial barrier to batteries for many households.

“Increasing the growth rates of distributed solar and batteries is the fastest way to reduce peak demand and shore up energy reliability as old coal-fired power stations retire,” said Rewiring Australia executive director Dan Cass on Friday.

“The incentive to encourage households to deploy their batteries in virtual power plants points to a future where millions of solar households with batteries and EVs become the backbone of the grid.

“In the time it takes the faux debate about nuclear power to lurch from one crazy idea to another, hundreds of thousands of solar household heroes can buy a battery and actually do something tangible for energy security and emissions reduction,” Cass said.

Dean Spaccavento, the CEO of smart energy outfit Reposit Power, says the expansion of the Peak Demand Reduction Scheme to include household batteries is a win-win for consumers and the grid.

“Home batteries are now playing a crucial role in a cleaner, more secure energy future for NSW and earning money for their contribution,” Spaccavento said on Friday.

“Homeowners can maximise the benefit they get from a battery system at their home by shopping around for deals that offer guaranteed bill reductions for at least five years.”

How the rebate is received by households and businesses in NSW will be something to watch. Considering the installed cost of a Tesla Powerwall 2, for example, remains up around $13,000 – $15,000, a $2,400 rebate is not going to make a huge difference to up-front affordability for many households.

In Victoria, the state government last year decided to scrap its nearly $3,000 home battery rebate and replace it with a zero interest finance offering, in the hope this approach would be more popular.

Solar Victoria’s $8,800 interest free battery loan is repayable over four years and is expected, in some cases, to wipe out upfront installation costs altogether.

The previous Coalition NSW government in 2020 piloted a program offering interest-free loans of up to $14,000 for a solar-battery system, or up to $9,000 for the addition of a battery to an existing solar system.

Solar Citizens, which has led an email campaign calling for the NSW government to support home battery uptake, says the rebate is a good start, but more needs to be done.

“The Australian Energy Market Operator has modelled a need for around one million household batteries by 2030,” said Solar Citizens CEO Heidi Lee Douglas on Friday.

“We would expect NSW’s share to be around 300,000 of those. This announcement is a welcome start but will not get us to 300,000 household batteries.”

Douglas says the state’s plan for consumer energy must be backed by “serious investment” in the upcoming NSW budget, or risk going nowhere.

She says a social housing Virtual Power Plan – a program to install rooftop solar on at least 30 per cent of social housing stock backed by 18,000 battery installations – would be one example of the sort of budget measure that could be rolled out.

“This could provide a 90MW contribution to the grid during peak demand, while bringing down energy bills for people on low and fixed incomes,” Douglas says.