Roughly one in three homes in South Australia is equipped with a solar PV system. While the main motivating factors for going solar to date have been generous government incentives (especially feed-in tariffs), these days low solar system prices are the main reason SA homes are going solar.
The need for these homes to use as much of the solar energy that they produce directly (instead of exporting it into the grid) is leading many to consider a battery storage system to keep more of their precious power to themselves.
What should SA households consider if they’re thinking about getting a home battery system installed?
Energy Storage in SA
The strong feed-in tariff incentives that once drove the solar industry in South Australia have been significantly reduced in recent years, but retail electricity prices remain high, so generating electricity at home is still an attractive prospect for many homes and businesses the state.
The only downside at the moment is that any excess solar power sold into the grid will earn the solar system owner only about 6-8c per kilowatt-hour (kWh) – significantly less than what they would save on their power bills if they ‘self-consumed’ the solar electricity themselves. The upshot of this is that without energy storage, South Australia 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 typical peak electricity consumption times – which usually take place during the morning and late afternoon.
These circumstances set the stage for energy storage to come to the rescue: If a customer can find an affordable energy storage option, they can not only save money on their power bill by using their solar power when it is worth the most to them (e.g. in the evening) – they can also reduce their reliance on the electricity grid.
In short, energy storage is becoming increasingly attractive for South Australia households because:
- Solar energy system prices are low, making solar power affordable compared to retail grid electricity.
- Retail electricity is expensive – as much as 50c/kWh or higher if you are on a time-of-use (TOU) tariff.
- Solar export rates are low, at around 6c/kWh, so it doesn’t make sense to send your solar into the grid.
- Energy storage costs are coming down quickly.
Do all energy storage systems provide backup power in the event of a blackout?
If you’re interested in energy storage primarily to ensure that you have access to electricity even in the event of a blackout, a system with backup functionality is what you are looking for. But keep in mind that not all energy storage systems have this capability – you’ll have to ask for it and may also have to pay for it.
Does battery storage make sense for you in SA?
Depending on your situation, it may or may not make sense for you to install batteries for your solar panels. If you live in South Australia and are thinking about solar and/or battery storage, then you probably fall into one of the following categories:
Category 1. You have a pre-existing solar PV system and are receiving South Australia’s 44c per kilowatt-hour (44c/kWh) solar feed-in tariff. Provided that you don’t move house, you’ll continue to receive these generous payments until 2028.
- Should you install batteries? Probably not: You could potentially lose this generous benefit by installing batteries, and in any case it would be virtually impossible to improve your returns by installing batteries (unless someone installed them for free).
Category 2. You have a pre-existing solar PV system and currently receive SA’s 16c/kWh solar feed-in tariff (plus retailer contribution). These payments will cease in September of 2016. It’s unclear what the replacement rate will be, but it’s likely to be in the range of 6-8c/kWh, as is the case in most other states.
- Should you install batteries? Maybe: Once the feed-in tariff payments end, it will make even less sense for you to send your solar energy back into the grid. Installing batteries will help your home to use a greater proportion of the solar energy that your system produces.
Category 3. You have a pre-existing solar PV system, but currently receive only the minimum feed-in tariff (a retailer contribution of 6-10c/kWh). The solar energy that your system produces is worth much more to you if you ‘self-consume’ it than if you export it into the electricity grid.
- Should you install batteries? Maybe: If you’re exporting a lot of your solar energy into the grid, batteries may already make sense for you by enabling you to use more of your solar energy directly.
Category 4. You do not yet have a solar system or batteries. In this case, if you install a solar system, any excess energy that it produces will go into the grid for about 6-10c/kWh – probably significantly less than what you pay for retail electricity.
- Should you install batteries? Maybe, but you’d probably save more money by simply installing an appropriately-sized solar PV system. If you do install batteries, a small battery bank would probably offer the most benefit.
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