When buying an energy battery for the home, most people are thinking about how to use their excess solar, what size battery they should buy and how much it costs – not how much energy the battery itself will use.
ISF was commissioned by the EDNA/International Energy Agency to examine what current studies can tell us about the energy efficiency of residential battery storage systems.
Our research found there is a big range between the most and least energy efficient household battery storage systems. Energy losses from home battery storage systems range from just 2% up to 20%.
Whilst the energy efficiency of battery storage systems does not appear yet to be on the radar of policy-makers, if consumers buy inefficient battery storage systems this could add up to a lot of lost energy.
Lost energy, in turn, could lead to lost household savings and extra cost for the energy system as batteries are deployed across millions of Australian households alongside rooftop solar.
What Determines the Energy Efficiency of Home Energy Storage Systems?
Energy losses from battery systems occur due to auxiliary loads such as cooling systems, LED displays, battery management systems, and through energy conversion and conditioning.
Energy losses result in reduced energy available to your home and to the grid. Existing studies find losses range from 2% to 20%, highlighting significant variability in energy efficiency performance across the market.
Performance is also likely to fade over that lifetime. Energy efficiency fade has been observed in EV batteries in as little as three years, but performance fade for home energy storage systems has not been studied.
Research in the UK has focused on quantifying the energy efficiency losses for individual home energy storage products, with losses per annum ranging between 300 kWh and 1000 kWh and financial losses of between €40 and €250 per household.
How important is the energy efficiency of battery storage systems?
No research has yet quantified or modelled the impact of these losses across an energy system, but it is clear individual product losses could really start to add up across the whole energy system if consumers select less energy efficient batteries.
The International Energy Agency is projecting 170 gigawatts (GW) of behind-the-meter battery storage will be added to the global energy system by 2030 under a net zero scenario.
Australians are installing home energy storage systems at a record pace – a total of 30,000 residential home batteries were sold in Australia during the first half of 2024, a 40% increase on last year.
The Australian Energy Market Operator is projecting up to 6.6GW of behind-the-meter (home battery) storage capacity across the National Electricity Market by 2030 and 44 GW by 2050.
Most battery product lifetimes are around 10 years, so if households are buying inefficient battery storage systems, this will lock in increased energy consumption for the next decade.
The New South Wales Government recently committed to a target of one million home batteries installed in NSW by 2035 in the Consumer Energy Strategy.
There are media reports that both major political parties will announce incentives for battery uptake in the run-up to the federal election.
Only 1 GW of home battery storage is currently installed but exponential growth is projected. Now is the time to get the settings right to ensure households are not buying inefficient battery storage systems.
What should policy makers do?
Deploying battery storage at scale is essential to complement the future renewable energy system, especially to make use of excess solar and meeting peak demand during times of lower generation, but we also need to make sure they are energy efficient.
Firstly, modelling is required to quantify the “size of the prize” for initiatives to increase the energy efficiency of home battery storage systems.
No detailed modelling has been done to examine the problem; for example, the energy penalty will depend on a range of variables such as deployment, the share of different types of batteries, etc.
Secondly, a standardised testing, measurement and verification regime needs to be established. Currently, there is a lack of standardisation in the testing methods used to measure energy efficiency and performance reporting.
Sometimes, there are unsubstantiated performance claims and in some cases manufacturers are not reporting an energy efficiency score at all on their product datasheets.
Manufacturer efficiency performance claims have in some cases been found to vary from performance observed during independent testing, which indicates a need for independent testing or oversight.
Consequently, the systems are not in place to objectively compare the efficiency performance of different battery systems.
Thirdly, minimum performance standards should be considered to lift efficiency standards for home energy storage systems.
Australia’s Greenhouse and Energy Minimum Standards, which has been one of the quiet achievers saving emissions and reducing energy bills across a range of appliances, appears well-suited to this task.
However, there are some complexities that would need to be considered before applying a regulatory approach to lifting energy performance standards in home energy storage systems.
For example, there are inherent differences between HESS product characteristics such as system scopes, product capabilities and battery cell chemistries which explains some of the differences between energy efficiency.
Differentiated standards might need to be developed for different types of batteries to ensure minimum performance standards don’t lock-out or favour specific technologies. Minimum performance standards should lift the bar without preventing innovation in what is an emerging sector.
Australia’s energy performance is poor by OECD standards because we often focus on supply-side solutions without minimising energy demand.
To avoid repeating the mistakes of the past, we need to ensure the millions of batteries that are going to be installed to store and supply solar power are also energy efficient.
Rusty Langdon is a senior research consultant at the Institute for Sustainable Futures, University of Technology Sydney
Chris Briggs is a research director & program lead – energy futures, at the Institute for Sustainable Futures, University of Technology Sydney
