Previously we’ve looked at the question of payback periods for home battery systems such as Tesla’s Powerwall 2, LG Chem’s RESU and Alpha ESS’s Storion Eco. These articles focused primarily on the investment case for installing a battery bank (usually with a 5kW solar system) and looked at meaningful numbers like ‘payback period’ and ‘internal rate of return’ (which is like ‘return on investment’ – but better). In this article we aim to take a simpler approach: With electricity prices rising, how much can a household save by having a Tesla Powerwall 2 installed? We’ll be looking at some indicative numbers for other battery products (and sizes) in future articles as well.
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While reading this, we ask you to keep your eye on the ball: Metrics like payback period & IRR – and not annual savings – are the best way to evaluate batteries as an investment. But we also recogise that for many people, installing batteries is about taking control over their energy expenditures rather than leaving them to the whims of an electricity system that is evidently unable to reign in skyrocketing prices; batteries are also a way of saying ‘go to hell’ to this system (even if you don’t end up completely off grid). Although still a considerable amount of money, home battery products like Tesla’s Powerwall 2 have in recent years entered the realm of feasibility and relative affordability, with a rapidly growing number of Australians are eager to get them installed.
Estimated solar usage & energy sources with 5kW solar & Tesla Powerwall 2
The home would be about 75% energy self-sufficient on the ‘average’ day. Click to enlarge.
Year 1 savings estimates: 5kW solar & a Tesla Powerwall 2
Using our Solar & Battery Payback & Sizing Estimator tool, plugged in some numbers to get an idea of how much money a household in select cities (namely: Adelaide, Brisbane, Perth & Sydney) using 25 kilowatt-hours (kWh) of electricity per day (‘evening peak’ pattern) would be likely to spend on electricity after installing a 5kW solar system plus a Tesla Powerwall 2.
The figures we generated in the outputs only apply to the first year of the system’s operation – and as such are fairly limited – but are still useful and instructive in understanding how dramatically solar & batteries can help to reduce an electricity bill. On average, households with this system combination installed could save roughly $2,000 in the first year (slightly more for homes on a time of use tariff), with the battery contributing a surprisingly large amount to this savings (at just over $1,100 on average). The full results are broken down by city & tariff type in the table below.
Estimated first year energy consumption charges & savings in select cities after installing 5kW solar & Tesla Powerwall 2
Click to enlarge.
Certainly some savings to be had – but remember to look closer
The rough numbers on display here give a feel for the enormous potential that home battery storage holds for Australian households. It’s important to keep in mind, however, that the picture is incomplete without looking at how much you actually spend on having the battery installed in the first place and the implications that has for the payback period and return on investment outcomes for the system. If you’re considering batteries (and/or solar) for your home, give our Solar & Battery Payback & Sizing Estimator tool a try to work out the numbers for yourself.
And keep in mind that we’ll be publishing similar articles about other battery products in the near future, so feel free to join our newsletter mailing list to follow along.
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Could you please consider Enphase battery in your next test.
Hi Joachim. Interestingly, someone else made the same request, so I’ll look at Enphase next.