Battery storage is the next frontier in home solar power for New South Wales. In fact, a perfect combination of factors means that NSW – and Australia more generally – is ‘ground zero‘ for energy storage, with the consensus being that it’s only a matter of time until solar-plus-storage is a ‘no-brainer’ for homes across the country. For any NSW resident considering a battery storage system for their home, there are a number of questions to ask and other considerations to be made. What do you need to know to make a decision about whether an energy storage system is right for your home?
Benefits of energy storage in NSW
Around 13% of homes in New South Wales have a rooftop solar system, according to the APVI. While strong government incentives (including an overly generous solar feed-in tariff) once drove the market for home solar power in NSW, these days high grid electricity prices and low solar system installation prices are what are motivating state residents to go solar.
But the state government no longer offers a strong incentive for sending solar power into the grid, and electricity retailers offer only a voluntary rate of 6-8c per kilowatt-hour (kWh). This means that in order to get the most of their solar systems, NSW solar homes must aim to consume as much of the electricity that their panels produce as possible by running appliances during daylight hours.
The problem is that peak solar output times do not always match up with peak electricity consumption times – which usually take place during the morning and late afternoon (as per the graph below). Home energy storage is the obvious solution to this problem: Once the power is stored, you have the option of using it later when it is of more value to you.
In a nutshell, energy storage is becoming attractive in NSW for the following reasons:
- Solar energy system prices are low and solar power is affordable.
- Retail electricity is expensive – as much as 50c/kWh or higher if you are on a time-of-use (TOU) tariff.
- With solar export rates as low as 6c/kWh, there is little incentive to sell your solar energy back into the grid.
- The cost of battery storage is coming down quickly.
What about backup power?
Want a battery backup so that you can keep your appliances running even in the event of a blackout? Keep in mind that not all energy storage systems have this feature – you may need to ask for it, and may have to pay more for it as well.
Key considerations & questions to ask about energy storage in NSW
Anyone thinking about getting a solar + energy storage system for their home or business in NSW should make sure they are well-informed before making a decision. The questions and considerations below will help you refine your understanding of your own needs and the ways in which energy storage might be of use to you.
Time-of-use metering: To switch or not to switch
Many of those who install an energy storage system find that they can get the most value out of it by switching to a time-of-use (TOU) electricity tariff with their electricity retailer. With TOU billing, your peak electricity rates are very expensive while your daytime rates are lower than a standard flat-rate tariff. By storing your electricity during the day (either from your solar panels or by purchasing from the grid) and then using the batteries to run your home when power is expensive, you could save more money than by staying on a flat-rate tariff. Speak with your installer to find out if a TOU option would make the most sense for you.
Sizing your energy storage system
- How much energy independence do you want? Do you want to go completely off-grid, or do you simply want to lessen your reliance on grid power while reducing your power bills? Remember that there are a spectrum of choices, and where your system size ends up falling on this spectrum will depend in part on your budget.
- What size solar system should you get? Barring special circumstances, solar industry best practice – with or without energy storage – is to design your solar system to meet your daytime electricity needs. Generally speaking, this is the optimal arrangement for maximising the value of going solar. That being said, you may want to significantly oversize your system if you are planning on installing enough storage to meet all of your electricity needs throughout the winter – when solar generation is at its lowest.
Can’t afford batteries yet? Consider a storage-ready hybrid inverter
Hybrid inverters are inverters which can intelligently manage power from multiple inputs – including the grid, solar panels and a battery bank. They cost a bit more than standard inverters but give you the option to easily add batteries in the future.
Evaluating & comparing energy storage system options
- Battery technology type: Lead acid and lithium-ion battery packs are the most common battery types that you will come across, but new technologies such as saltwater batteries and flow batteries are also coming onto the market.
- Grid charging: Can your energy storage system refuel itself using grid electricity? If you are on TOU metering, being able to charge your batteries during off-peak times instead of with your solar panels could make a big difference in the economic viability of getting energy storage.
- Key metrics for energy storage – Cycle life, DoD and storage efficiency: When comparing battery types, be sure to check the spec sheet for cycle life, recommended depth of discharge (DoD), and round-trip storage efficiency of the batteries in question – all of them will play a role in the overall cost of storage for the system.
- Warranty duration: Systems should have warranties between 5-10 years, depending on the type of battery. Check the terms & conditions of the warranty to make sure you do not void it through inappropriate use (such as discharging the battery too much too frequently).
Special considerations for retrofitting energy storage to your existing PV system
We recognise that many of the NSW residents in the market for an energy storage system already have solar PV. What should you keep in mind while shopping around for a retrofit battery storage system?
- Will you need to replace your inverter to install energy storage? In some cases you may – but it depends on the type of energy storage technology. Additionally, this might not be much of a problem if you’ve already had your solar system for over 5 years – at which point inverters generally require routine replacement/maintenance anyway.
- Are you currently receiving a state-mandated solar feed-in tariff under the NSW Solar Bonus Scheme? If you are, it may not be worth your while to install batteries as exporting solar electricity to the grid is probably worth more to you than saving it yourself. In this case, it may be better to wait until the end of 2016 (when the Solar Bonus Scheme expires) before installing batteries.
- How much of your daytime electricity needs does your solar system currently meet? Depending on when you had your system installed and whether or not you have/had a feed-in tariff, it may generate only enough power to meet a small portion of your electricity needs – or it may generate more than you actually need. This will dictate the best approach for sizing your battery storage. Speak to your installer about how to retrofit energy storage to optimise value.
- What size energy storage system would best suit your needs and budget? If energy independence is your goal and you have a large solar PV system and no budget limits, you could potentially become completely energy independent. However, if you do have a budget and your goal is to save money on your power bills by more effectively using your solar, you’ll want an energy storage system that is both affordable and offers real value. In this case, you may want to start with a smaller system in order to lessen your reliance on the grid – but not go entirely off-grid.
© 2015 Solar Choice Pty Ltd
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He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.
James lives in Newcastle in a house with a weird solar system.
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