Since 2015 Australians have been talking about home battery storage being on the cusp of financial viability. Are home batteries worth the investment in 2018? We’ve crunched the number for all of Australia’s capital cities to find out.

This article was originally published in February 2017. We then had an August 2017 update, followed by this update (Jan 2018) to take into account changing grid electricity prices, solar feed-in tariff rates, battery installation prices and solar PV system installation prices. We plan on updating it again midway through the year. For regular updates, check out our monthly Battery Storage Price Index.

Compare Solar & Battery Quotes

Interest in battery storage remains high in Australia

Batteries are in high demand thanks to the promise of energy self-sufficiency and back-up power in the event of blackouts. Battery storage system prices are coming down quickly and the number of households opting to install battery storage has risen dramatically compared to just a couple of years ago. Accordingly, 2017 ended up being the best year ever for home battery storage in Australia – and there are widespread expectations that 2018 will be

Previously we’ve looked at the topic of when battery storage will become a ‘no-brainer’ investment. In that article, we said that the ultimate goal post is the point at which the addition of batteries actually reduces the payback period of a solar PV system – rather than lengthening it.

If we assume that the batteries are charged only with the sun, by our estimates battery storage pricing needs to come down to about $200-$300 per kilowatt-hour (kWh) of storage capacity (for a lithium battery with a 10-year warranty) for it to make sense purely from an investment standpoint. Paybacks could be faster if tactics like tariff arbitrage, selective energy export and spot price trading are implemented. Currently, the lowest prices we’re seeing are about $750-$800/kWh of storage capacity. Read the full article →

{ 7 comments }

+Jack Watson 20 January, 2018 at 8:31 am

ps. CORRECTION:- My first panels were sixty FOUR watt panels. The only others available were 45-watt and 30-watt. I recall the earliest ‘energy-saving’ light-globes’ ~ of which I STILL have two!’ ~ cost about $40 each…or 5 for a week’s wages. Free auto light-globes with/without suitable reflectors from the wreckers were a much better option, even if they used a bit more power. They didn’t, for example, need an inverter since most (DIY owner-builder) houses were wired for both 240vac AND 12vdc straight off the battery-bank. (I also still own a 12-volt tv from back then…and it STILL runs on EIGHT watts.

Solar Choice Staff 22 January, 2018 at 10:20 am

Hi Jack. Thanks for your comments. You are certainly ahead of the curve in your deployment of solar & batteries for home. When it comes to off-grid systems, there’s no question that lead acid batteries are still the best option, offering an affordable, tried-and-true solution that gets the job done. While the intrepid and the determined can surely put together systems such as yourself, for those who want to remain grid-connected without limitations on their energy consumption but still want a high degree of energy independence, solar plus a lithium battery is likely to be the preferred option going forward for a few reasons (warranties & piece of mind being a big part of that). These days professionally installed rooftop solar is affordable enough that there’s generally not a need to go DIY; it’s just a matter of time before (lithium) batteries reach this point as well.

Jack Watson 20 January, 2018 at 8:19 am

You may twiddle your numbers until your fingers fall off, but the question is a specious one; stand-alone battery-storage has ALWAYS been the more viable option ~ in terms of value for money if not convenience. One reason for your claims being way off the mark is that you(along with other commercial interests) insist upon using false parameters:- ‘power-walls’, lithium-etc and remaining connected to the grid.
I installed my first solar panels in 1981,before most people had even heard of such a thing, and components were horribly expensive; eg I bought my first 2nd-hand panels for $13.80 per watt ~ and they’re still working at about 80% efficiency. They were 6-watt panels ~ the largest available at the time. But for the people who bought them (hill-dwelling hippies etc.) who couldn’t afford the price of buying land within rifle-shot of the grid even that price was easily the best option. And the storage system was lead-acid batteries: 2nd-hand ones were plentiful. A friend of mine recently retired a set of 200ah ex-SEC batteries after 28 years of careful use. We used to buy them from the SEC depot in Port Melbourne (since privatised/closed) for between $9 and $15 each.
All the other parts were expensive too, but could be substituted for at tiny cost with a little initiative. Such measures are still available (dabbbles@gmail.com), though the price of modern gee-whiz components has also come down dramatically in price and well-worth a look.
Over the years I’ve installed/helped installed hundreds of solar systems in all sorts of circumstances, and can say that DIY Stand-Alone systems are STILL (and probably always will be be) by far the best, most economically-efficient and self-satisfying way to go. eg. Deep-cycle LA batteries have become far more reliable than ever and can be bought for as little as $1.50 per AH.: ie about $150 for 1kw of storage. Records show such batteries can be bought with a 3-year warranty, and experience shows they can be expected to last 5-8 years. So even if you had to replace them after 5 years the savings over the modern set-ups would still be HUGE. Moreover, since all such components are plug-and-play, installation costs are ZERO. Further, being grid-free means you don’t pay the ‘service-charge’. (Until recently ~despite the costs mentioned above I was paying about $600 pa. I was connected ONLY because I was still getting $1600 back from Origin on a 66-cent per kwh FIT.

Point is: DIY stand-alone is much cheaper, easier, more reliable and self-sufficient. However the offers and figures stack up, always remember that NONE of the ‘providers’ work at a loss. Their profits come out of YOUR pocket.

Peter 24 January, 2018 at 1:20 pm

Hi Jack, just reading your comments. They make sense if you have the skills and knowledge. The issue I would have is that without an electrician’s ticket, if my house burnt down, likely that insurance wouldn’t pay for it, particularly if the fire was caused by an electrical fault (and probably even if it wasn’t, given the reputation of some providers.) If you are qualified or have a mate who is, probably all good.

Otherwise, like most things in life, you factor in your own time, plus the enjoyment you get from doing it, and balance that against paying for someone else’s time and profit. Several decades ago, I built a pine book case – more expensive than the chipboard ones – because I had the time and the tools. The chipboard are long gone, my one was worth the time and had fun building it. These days, I’d just buy a good quality one, because I am time poor and have a brummy back. So I’ll probably pay for someone to put in batteries too!

Mick 19 January, 2018 at 6:31 pm

Thank you for your time and analysis in your blog ‘Is home solar battery storage worth it? (Jan 2018 update)’. This is very useful information.
I am having a problem with the tables in the article. I do not understand the columns ‘IRR’. I have reread the article couple of times and maybe I just keep missing it, but I cannot find what ‘IRR’ means or the related percentage.
Could you please let me know what IRR stands for or add a definition somewhere.
Thanks
Mick

Solar Choice Staff 22 January, 2018 at 10:25 am

Hi Mick,

Thanks for the comment. IRR means ‘internal rate of return‘ and is a slightly more sophisticated cousin of ‘return on investment’ that takes into account electricity price inflation as well as the financial ‘discount rate’ that is used when evaluating & comparing different investment options.

From the page that I’ve linked to above:

You can think of internal rate of return as the rate of growth a project is expected to generate. While the actual rate of return that a given project ends up generating will often differ from its estimated IRR rate, a project with a substantially higher IRR value than other available options would still provide a much better chance of strong growth. One popular use of IRR is in comparing the profitability of establishing new operations with that of expanding old ones. For example, an energy company may use IRR in deciding whether to open a new power plant or to renovate and expand a previously existing one. While both projects are likely to add value to the company, it is likely that one will be the more logical decision as prescribed by IRR.

Apologies for not making this clearer in the article itself. I’ll look into making this more explicit & clear in similar articles in the future.

Mick 22 January, 2018 at 11:49 pm

Thanks for the reply. I’ll take a closer look.

Comments on this entry are closed.

Previous post:

Next post: