Energy storage in NSW after the Solar Bonus Feed-in Tariff Scheme

There are roughly 150,000 households in New South Wales who receive solar feed-in tariff payments under the state’s Solar Bonus Scheme. As the Sydney Morning Herald pointed out recently, before the payments cease at the end of 2016, these households will be looking for ways to make the most of the solar energy that their systems produce. Many of them are expected to install an energy storage system to maximise their solar usage.

Installing battery storage is not yet at the point of being an economic ‘no brainer’ for most situations in Australia. One of the situations where storage is already starting to make sense, however, is the case of NSW homes coming of the Solar Bonus Scheme.

Not interested in battery storage? Check out our article about other options for homes coming off the NSW Solar Bonus Scheme this December

The Solar Bonus Scheme, which has been closed to new applicants for several years, pays households either 60¢ or 20¢ (depending on when they signed up) for every kilowatt-hour (kWh) of solar electricity that they generate.

These are very generous rates, and there are two major implications for when they are cut off:

  1. Almost all systems that were installed under the incentive will have paid themselves off by the time the payments end on 31 December 2016; and
  2. There will be strong feelings of loss among those who experience the step-down in rates – the exported solar power once worth so much will then be worth only 6-8¢/kWh.

How to get the most out of your solar system after the NSW Solar Bonus Scheme ends

Net metering, self-consumption & energy storage

Solar Bonus Scheme customers, with their systems already paid off, will be looking to minimise the losses associated with the reduction in feed-in tariff payments. There are three steps they can take to do this:

  1. Switch from a gross solar metering setup (where all solar is automatically exported to the grid) onto a net solar metering setup (where only the excess solar power not used by the house is exported to the grid).
  2. Where possible, endeavour to use more of your electricity during daylight hours. ‘Self-consumption’ is the name of the game for anyone who goes solar without a feed-in tariff; you’ll save more money on your power bill by consuming the electricity that you generate at home than by sending it into the grid.
  3. Install a battery storage system to help increase self-consumption. Not all households can shift their electricity usage to daylight hours – energy storage lets them instead shift their solar power usage later into the afternoon and evening.

What sort of energy storage system will you need?

There are a number of considerations you should keep in mind when selecting the best energy storage system for you; many of them will depend on your personal preferences. They include:

  • Can the energy storage system be retro-fitted onto an existing solar system? Your installer or the manufacturer should be able to answer this question for you, but generally speaking most systems can be retrofitted.
  • Will you need to replace your inverter in order to add on batteries? Depending on the energy storage system type and your existing inverter, you may or may not need a new inverter.
  • How much storage capacity do you need? You should try to understand how much excess solar power you have on a daily basis once you switch to net metering. Your battery bank should be large enough to collect the excess solar power – but not larger. Because most systems installed under the Solar Bonus Scheme were in the range of 1.5 kilowatts (kW) to 3kW in capacity, a storage capacity of 5-7kWh should be sufficient to capture all of the excess solar in most cases.

(Check out our Solar & Battery Storage Sizing & Payback Estimator Tool!)

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  • Do you want your batteries to give you back-up power in the event of a blackout? Not all energy storage systems have this functionality – you will need to ask for it.

Energy storage for non Solar Bonus Scheme customers

If you installed your solar system after the Solar Bonus Scheme closed to new entrants or are considering a brand new solar-plus-storage system in NSW your selection criteria may be different from those mentioned above. We have published a few articles on the topic of energy storage which you may find useful:

Compare solar & battery storage quotes for NSW

In August 2015, Solar Choice launched Australia’s first Battery Storage Comparison service, which will allow you to compare installer offerings at a glance in an apples-to-apples format.

If you are a residential customer interested in a new solar-plus-storage system, fill out your details in our Solar Quote Comparison request form to compare your options now. Potential commercial clients are also invited to register their interest. (If you have a pre-existing solar system, select ‘Battery Only’.)

© 2016 Solar Choice Pty Ltd

James Martin II


    1. Hi Dennis,

      We’re more than happy to help where we can. If it’s battery storage you’re after, simply fill out the Quotoe Comparison Request form to the right of this page (select ‘Battery Storage Only‘ if you have a preexisting solar system).

      You can also give us a ring on 1300 78 72 73 if you’d like to discuss your options in further detail.

  1. James,
    I reside in Sydney and installed a 2.8 kw/H system in 2011. By default the metering will be switched to net by my retailer at end of 2016. I understand the difference between net and gross metering but am a little uncertain about the usage of the solar generated power. This is what I think will happen: during daylight hours when the system is generating electricity and there is a demand from the house then the generated power will be fed from the inverter to the house. If there is no demand from the house (unlikely) or supply exceeds demand at any given point then the solar generated power is exported to the grid. At night no power can be produced by the system so all demand will be drawn from the grid. Conclusion: if there is any excess in the system during daylight hours that will be exported to the grid. To use all solar generated power in the house would require a storage system (given there is an excess, which in our case does apply).
    Very interested in your thoughts.

    1. Hi Peter,

      The way you’ve described the situation is exactly correct – as long as you’re on a net metering setup, your solar energy will flow first into your appliances, with only the excess, unused solar energy going into the grid. And yes, the goal is to ensure you’re ‘self-consuming’ as much of your solar energy as possible.

      There are a few ways to do this. The most talked-about solution at the moment is battery storage, and once prices come down a bit batteries will probably be the most commonplace and obvious option thanks to their versatility (you can use them to power all sorts of devices, and depending on your setup they can be charged using either solar or grid energy – which presents further savings opportunities through tariff arbitrage.)

      A few other options include 1) putting devices on timers (not really a ‘smart’ option as timers can’t predict the weather), 2) getting an energy management system (which will schedule the use of devices in accordance with solar availability in order to save you money – see for example carbonTRACK), or 3) divert as much of the excess solar as you can into your hot water tank using a device such as SolarImmersion.

      I hope this helps!

  2. i have a 2 kilowatt solar system.i will only break even at end of scheme.So no advantage in the cost of installation,I would like to go totally off the grid as I dont believe if there is no advantage for my household,my electricity provider should not benefit,due to my initial cost.

    1. Hi Noelene,

      Once the Solar Bonus Scheme ends, the rate you get paid for exported solar will actually be worth less than what it would if you consumed it yourself directly. So if that’s what you’re referring to when you talk about ‘breaking even’, it’s actually not even that good.

      As we’ve written before, going off grid is not as easy as it may at first appear. This is mainly because you need extra solar and battery capacity to carry you through about 3 days’ worth of bad weather (a realistic worst-case scenario) if you’re relying only on solar power. Unless your daily electricity consumption is very minimal (about 1 kilowatt-hour per day), then a 2kW solar system will not do the job.

      However, you could look into expanding your solar system. By our estimates, a 10kW solar system is roughly large enough for a fairly energy-efficient home (consuming about 10kWh/day) to go off the grid; as for batteries, you’d need around 30kWh of capacity (with lithium-ion, flow or ‘saltwater’ batteries) or about 45kWh of capacity with lead batteries.

      Hope this is helpful. If you’re like to compare solar & battery quotes from a range of installers, fill out the Quote Comparison Request form to the right of this page or give us a ring on 1300 78 72 73. One of the installers in our network should be able to assist.

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