Tesla’s Powerwall is the home battery bank that has taken Australia by storm – interest and demand are through the roof for this particular product despite a plethora of other options on the market. What is the price for a fully-installed Tesla Powerwall in Sydney, and is it worth the investment?
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Payback time & annual savings with Tesla’s Powerwall in Sydney
Let’s make one thing clear: Rooftop solar (without batteries) is a money-saver for homes in Sydney, as well as many other parts of Australia. For homes with heavy daytime electricity consumption, solar system payback periods can still be as short as 4-5 years in the right conditions, although 6-7 years is more common.
In contrast, at this point in time, the most optimistic payback period for the best-value battery storage solutions on the market – including the Powerwall – is about 10 years. It’s useful to keep in mind that battery bank warranty periods are rarely longer than 10 years (even if their ‘design life’ promises longer), whereas the lifespan of a typical rooftop solar array is 25 years (with inverter replacements every 7-10 years, approximately).
Using our Solar Battery Storage Sizing & Payback Calculator, we plugged in some figures that would apply to a (more or less) typical Sydney home.
- 20 kilowatt-hours (kWh) of electricity consumption per day, on average throughout the year
- Heavy daytime electricity usage (assuming the occupants are retired or work from home)
- A 5kW solar PV system, retailing at $6,500 (on the cost-competitive side, but not the bottom of the market)
- Retail electricity tariff rate of 22c/kWh (i.e. the rate the home would pay for electricity from the grid)
- Solar feed-in tariff rate of 6c/kWh (standard across NSW these days)
- One daily-use Tesla Powerwall, which can store 7kWh of energy (6.4kWh of which is usable), retailing for about $10,000
- The Powerwall is only charged with excess solar
The results, as expected, were sunny for solar but not for the Powerwall. The solar system would pay for itself in around 6.5 years, but the payback for the combined solar + Powerwall system would be over 12 years if you charge overnight with the grid and do tariff arbitrage (purchasing energy from the grid to store when it’s cheap for use when it’s expensive) – longer than the battery’s warranty period, but just under an expected life of 15 years (keeping in mind that it will then end up running through cycles much more quickly). Without tariff arbitrage, payback jumps up to about 13.5 years.
The case for the Powerwall gets worse if you’re retrofitting it to an existing solar PV system. In this case, we’re examining the value that the battery bank delivers as separate from the value that the solar delivers – and it could balloon out to as much as 30-40 years. If you’re concerned about the economics of the situation, you’d be better off buying more solar panels as opposed to batteries.
Image via Tesla Motors.
But is the Powerwall really about payback periods anyway?
One could argue that all this analysis completely misses the point of Tesla’s Powerwall. The desire for the sleek, high-tech units is a visceral one for many – it’s a toy for early adopters, and can’t be put into the same category as solar PV, which has become something of a commodity. Australians as a whole dislike their electricity retailers, but many people like Tesla and everything the boundary-pushing company and its visionary CEO Elon Musk represent. Combine these two things – plus the relative affordability of the units – and it’s not hard to explain why the Powerwall became such a coveted item in record time.
The same is arguably so about other batteries as well, and there are a number of other attractive, innovative options on the market already. These include Aquion’s AHI batteries, Enphase’s modular AC batteries, Redflow & Imergy‘s flow batteries, Redback’s Smart Hybrid System and Ecoult’s ‘Ultrabattery’ – to name just a few.
So if you’re thinking about installing a battery bank, you might want to have a good think about what your goals are. If you want batteries for their own sake – either to spite your retailer, to do your part for the environment, or some other reason – then by all means you should look into them, but be realistic with your expectations.
And on that note, a self-plug:
You can instantly compare battery storage system & solar prices by requesting a Solar Quote Comparison – simply complete the form to the right of this page (click ‘battery’ if you already have a solar PV system).
© 2016 Solar Choice Pty Ltd
