Plans to replace Victoria’s home battery rebate with a government supported green loan mechanism have been put into play in the state, with the launch of a zero interest finance offering to help cover the cost of solar energy storage.
The $8,800 interest free battery loan, announced on Thursday by Victorian energy minister Lily D’Ambrosio, will be repayable over four years and is expected, in some cases, to wipe out upfront installation costs altogether.
According to Solar Victoria, which administrates the Solar Homes program for the Andrews government, installation costs for a residential battery start at about $8,000 for a 6kWh system and rise to about $17,000 for an 11kWh system.
As part of the Labor government’s $1.3 billion Solar Homes Program, the loan will be available in addition to the $1,400 rebate and $1,400 interest-free loan for solar, saving eligible households $11,600 on upfront installation costs.
The battery loan will also be available to home owners who have already claimed a rebate and/or finance to install solar panels through Solar Homes.
Solar Victoria says that adding a battery to existing solar can more than double the average amount of rooftop-generated energy used by a household, taking it self consumption around 60 per cent.
This increase in solar self-consumption – and decrease in the use of electricity from the grid – promises to deliver a $1,500 energy bill reduction each year and offer an average return on investment period of seven to 10 years.
“To achieve our nation-leading renewable energy target of 95 per cent by 2035, it is vital households transition to running on cheap, reliable, renewable energy,” D’Ambrosio said on Thursday
“Interest free battery loans will allow more people to take advantage of cheaper renewable energy by significantly reducing upfront costs of installing battery storage.”
The decision to replace the nearly $3,000 home batter rebate with a zero interest loan offering was flagged by Solar Victoria in May, as a new approach to drive home energy storage.
At the time, Solar Victoria CEO Stan Krpan said a loan is in many ways a more generous offer that a rebate, factoring in the time allocated to pay it off and the boost to energy savings promised over that period.
Compared to the highly successful rooftop solar rebate, which in the early days of the program regularly saw thousands of applications snapped up within hours, the battery rebate has been much more of a slow burner, even if it has surpassed its targets of more 15,000 discounted systems installed over its lifetime so far.
Krpan says the idea of a loan for home batteries was partly inspired by the success of the $1,400 interest-free loan that is currently being offered loan alongside the current $1,400 rooftop solar rebate through Solar Homes.
“I think it’s recognising that our interest free loan on PV has been really popular,” Krpan told One Step Off The Grid in May.
“We’ve had 200,000 customers take that up. Two thirds of our customer take up the interest free loan at the same time that they take up the rebate.”