There’s been plenty of talk about how Australian solar households are warming to the idea of battery storage, but little concrete data to back this up. Until now.
A new report from solar analysts, SunWiz, has revealed almost 21,000 behind the meter energy storage systems were installed in Australia in 2017, a three-fold increase on the year before.
On top of that, the report finds that 12 per cent of the 172,000 new solar systems installed in the booming 2017 market included a battery, up from six per cent in 2016.
But what does this trebling of battery storage uptake mean? Is it a sign that batteries now make economic sense to the average Australian household?
Well, it’s complicated.
If your metric is return on investment (ROI), there are a lot of variables that you need to weigh up – and they change from home to home, and state to state, and even from one distribution company to another. And we look into all that in-depth below.
But for those not banking on ROI – and plenty of consumers are not (think cars, couches, TVs) – then it’s pretty straight forward.
“With energy prices rising this year, Australians are embracing the idea of being able to control their energy consumption and costs,” said SunWiz founder and managing director, Warwick Johnston.
And battery storage can certainly do that, as long as you can afford to install it in the first place. ‘
As the SunWiz report shows – and the charts below illustrate – a Sydney household that invests in solar PV and a Tesla Powerwall 2 can achieve a $1,931 reduction (or 72 per cent) reduction in their annual power bills.
For those who can’t afford the up-front cost, there are deals like sonnenFlat – where households can install a 10kWh battery by German manufacturer sonnen at no up-front cost, instead paying a fixed monthly fee of $30, $40 or $50, depending on the system size and energy usage.
According to sonnen, this deal has already been popular in Australia – popular enough that the company is building a manufacturing plant here.
In one instance, according to installer Natural Solar, a Sydney family that uses around 35kWh of electricity a day, has saved $2,525.88 on its power bills this year through the sonnenFlat scheme.
Some state policies are also driving uptake, with similar deals of discounted or zero up-front cost – a pattern Johnston sees continuinf to emerge across the country considering the popularity of batteries and the potential benefits they can offer the grid.
But when it comes to ROI, as we said above, it gets complicated.
As noted in the report, and then detailed by Johnston at the Smart energy Conference in Sydney on Tuesday, there are a lot of factors that influence the ROI on a solar and battery storage system, and these vary from system to system, house to house, network to network, and state and to state.
To get around this, SunWiz performed detailed energy an financial analysis using its PVsell engine, for solar and batteries of various sizes in each major state, in each DNSP zone, and for flat rate tariffs (Peak/off-peak in Victoria) and flat rate export tariffs (plus TOU export in Victoria).
They also tested a range of PV system sizes (3kW, 5kW, 7kW); a range of battery sizes (0kWh, 4kWh, 8kWh, 12 kWh); and three levels of consumption (15, 20 and 25 kWh/day)
Here’s what they found:
1. Bill savings increase with battery capacity:
Johnston says: “This chart shows the financial benefit (bill savings) for a 5kW PV system with varying amounts of energy storage. As expected, as the battery size increases, so do the bill savings.
“The batteries are charging from power that would otherwise be exported at a low tariff, and value adding by discharging at a later time.
“Across our analyses, the proportion of power from a 5kW PV system that is exported is typically 61 per cent, but can be reduced to 16 per cent by a 12kW battery.”
2. ROI is best for smaller batteries:
Johnston says: “This chart shows the distribution of the ROI for PV-only, and PV with various sized batteries. Although a battery does reduce customers’ electricity bill, it doesn’t pay for itself as quickly as a 5kW PV-only system which has a typical ROI of 22.9 per cent (five-year payback).
“In contrast the battery drags down the ROI to around 11 per cent (nine-year payback). The PV does the financial heavy lifting, which is why a larger battery has a poorer ROI.
“That said, there are situations where the PV-storage ROI is quite healthy – and achieves an 18 per cent ROI (5.6-year payback).”
3. ROI is best for higher levels of consumption and smaller batteries:
Johnston says: “This chart illustrates the bill savings and ROI as additional amounts of storage are added, for a range of daily consumption levels.
“Larger consumers will also self-consume more power, and therefore their generation will be more valuable. As a result their ROI is higher for a PV-only system. Add in a battery and the advantage
diminishes (there’s less exported energy to absorb as less would otherwise be export), but the ROI is driven by the PV system so the PV-storage system still has higher ROI for larger users.”
4. ROI is best in South Australia:
Johnston says: “This chart compares the non-battery ROI vs the average ROI with a battery in each DNSP. ROI is highest in SA, both for PV-only and PV-storage.
“If you’re in Victoria, your ROI is much better in Ausnet territory than Citipower; likewise in Queensland Ergon ROI is better than Energex ROI.”
5. If you’re going to put a battery on, a 7kW PV array has equivalent ROI to a 5kW PV array:
Johnston says: “This chart illustrates the average ROI for a range of system sizes and battery sizes. There are some interesting economies of scale at play.
“If you’re looking at PV-only, then the ROI of a 5kW is the same as the ROI of the 3kW (at current FiT rates), meaning if you can afford the larger system you’ll get a better bill reduction for the same ROI.
“If you’re going to put in a battery then the ROI with a 5kW PV system is practically the same as the ROI with a 7kW system, so if you can afford to you may as well buy the larger system (and get better bill reduction).”
And there are other factors at play, too, including roof shading and orientation, where you put your panels, and which battery you choose.
But there is also more and more help out there to navigate these complexities, from experts like SunWiz, for all of the above, and Global Roam for the extensive work it has done in listing the more than 126 (and counting) different kinds of batteries currently available on the home energy storage market, and their specifications. And there are many other resources out there.
So get researching!
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.
This post was published on April 12, 2018 10:56 am
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View Comments
Some additional thoughts with a WA feel via here!
https://twitter.com/ProfRayWills/status/983509801693954048
They could be 100% by then Ray, my house has been for 12 months now and I sell my excess to the grid. My best credit so far for a quarter was $210.
And loving it!
Nah nah nah na na.
My best was $117 for one month.
❤
Well wonderful for you cheeky girl, but we use more energy than you, plus our solar generation charges the battery as well as supplying all loads and paying the SAC charge to boot.
If the grid goes down you're an unhappy lassie, but we won't be effected.
Winners are grinners. Lol
If the grid goes down I can clean my teeth and wash, fill a bucket all from the kitchen tap (ugh town water) to put by the loo, light candles, wait it out.
Maybe a battery in a year or two from savings and when the price has come down. Meantime, I'm a grinning winner too.
????
Yes you are a winner! When you get your battery, I'll toast you with a Wild Turkey and Honey. My favourite sipp'n medicine.
Lol.
My tipple is brandy and water, thank you.
I'll have one for you tonight.
Cheers.
I WONT put Battery storage on not worth it yet unless u are a big power user....i have 6 kw solar.. 4 people and aircon and timer on solar ...makes no sense for me to put battery on as $70 BILL IN SUMMER ..$130 in winter .a battery will not give a ROI ...cheaper to pay $ 500 per year...but not everyone here will agree ...not even solar guy will agree with this
It is a very interesting debate. I was dead set on a battery last year, in the planning stage, but the wheels fell off. Now, I can see that for my own situation, the only real value of a battery is for backup in a power outage, of which we have had precisely two that have lasted longer than a couple of minutes in the last 7 years, and even those lasted less than 90 minutes.
On present prices, the system pays for itself four months before the loan is paid off, and then returns more than double the previous power bills in income. Prices will of course change, but with the current lunacy surrounding policy, who would dare predict?
Would a battery Improve on that? I doubt it, and in any case, more income would cause loss of pension at 50c for every extra dollar.
But every case is different, and I can speak only for myself.
By the way, are your figures monthly or quarterly?
Total yearly bill less than $500 so the return on investment is poor as 10k to 13k for battery is at least 20 years ...just mot worth doing yet until ROI is 5 years.. $189 in feed in tarrif at 10.6 cents for dec to feb
Such a variation in FIT. 10.6, 12.8, Some get 14.0, I think.
It's good to be bill free, and getting cash. Not quote enough to cover the loan , but close. Though I'm choosing to regard that as my power bill. It's only $15 per fortnight more, and I apply the credits to power for the winter, saving for the air con, stuff like that.
Let's all hope that the States give NEG the bum's rush on Friday.
Turnbull might even have an apoplexy.
In qld we are restricted to 6 kw...i have 8 kw inverter and when i am allowed i will put up 2 extra kw up and thats all i will do...my last house i had 2 kw and a 17 year contract at 52 cents ...that system paid it's self off in 7 years but i had gas cooker and Rheem solar 300 litres on roof..
To the contrary, I agree a battery would be a waste of money in your case. I tell many of my potential customers the same thing. Morally it's the right thing to do, sure it doesn't help my finances, but I have to sleep at night!
You're one of the good guys, so.
Sunwiz, it would be useful if you recalculated the ROIs on a marginal-capacity basis, i.e. the return on *incremental* investment - as you add an extra kWh of storage.
My guess is the first kWh is insanely profitable, but it peters out around maybe 5 or 6kWh. Which would then (whatever that point comes to) be the logical sizing. I know that's lower than the blended (overall) ROI, so installers/vendors won't like it, but economically that is the correct way to look at it.
The sonnen battery is not no upfront cost. Once you have paid for the battery your electricity cost is capped at the per month fee as long as you stick to your usage limits.
Correct that it isn't without no up front cost and at even the min monthly fee of $40=SAC of $1.33/day. EA only charge me 82cents/day.
So why go with Sonnen.
The elephant in the room is the reaction of the networks to the prospect of widespread grid defections.
Blind Freddie can see that to reach their customers, the industrial generators, whether fossil fueled or renewable, must have a distribution or network. Equally, to have a distribution business, the networks need connected customers.
Blind Freddie can also see that high daily charges and silly low FiTs are going to drive defection.
When a certain critical mass of power production is independent, households and businesses that have abandoned the grid, then what?
All those wind and solar farms with not enough customers; Those coal clunkers with not enough customers; The networks with not enough enough customers?
Guys, to keep the customers from deciding your servicell is too costly, we'll go it alone, thanks, two things must change. You must woo your customers. Very simple.
1. The standing charges must be lowered.
2. Feed in Tarrifs must be high enough relative to kWh price to make leaving the grid totally stupid. After all, no grid, no FIT.
Then, the good news is, commercial generators keep enough customers to make some profit, and networks do too. Not quite the extortionate profits of recent years, but a decent whack.
Small batteries to cover the dark hours of one day, and possibly provide backup in case of blackout are a reasonable addition to a domestic solar system but not essential. The most important thing is to have enough panels to cover your daily usage, AND the standing charge, AND the cost of buying in for the dark hours, AND a bit extra to get an actual income. Stay connected, because a battery big enough to keep your house running through a long stretch of bad weather would be ruinously expensive for most families, and because without the grid, you can't get any FiT at all.
Spot on! Although some families don't think twice about getting that new $50k car, which has no ROI.
Those utilities who work out that a lot of the product they sell can come from roof top solar, the less they will need to invest in large scale solar and batteries themselves.
Basic!
To support Andy Saunders' comment, the blended ROI is a bit of a fraud.
The real question is this: when will you get a higher ROI from installing a battery than from paying down a standard mortgage at 4%? If it can't achieve that, then it's a financial non-starter.
Additionally, since batteries have a fair degree of round-trip inefficiency, it seems unlikely that they reduce carbon emissions.
All up, it seems people would be better off taking that money and investing it in more solar panels if they can, or power-saving measures if they can't.
If there is an export limit on your solar inverter (as is the case in many distribution areas) you are storing some of that "curtailed" distributed solar for nighttime use. In this case, it has the potential to reduce carbon emissions. This will only increase as the rate of distributed generation increases across Australia.
That's true, I hadn't thought of this factor.
How is ROI defined? What is the time frame?
The ROI used in this article is certainly not corresponding to the definition of ROI.
For definition and calculation see: https://www.investopedia.com/articles/basics/10/guide-to-calculating-roi.asp
ROI also does not take into account the time value of money ($100 now is different to $100 in say 19 years)