Pros and cons of Labor's home batteries scheme

This is a poor article showing their lack of understanding of the electricity market, time of use tariffs, smart meters and batteries. Clearly outside the authors area of expertise and most of the people making comments.
I suggest you refer people to the Solar Quotes website for guidance by people who are experts in this field.

Peter,

What's poor about it?

If batteries are such a good idea, why do they need to be subsidised?

'If votes are such a good idea, why do they need to be subsidised?'

"lack of understanding of the electricity market, time of use tariffs, smart meters and batteries.":

This cut away all that excess complexity to focus on what a home battery provides:
'It’s great to be using free power from your battery, but in reality, that full battery is only saving $3.60.'

And it is too generous to batteries by not considering straight line depreciation of 10% of replacement cost of $11,900:
= $1,190 / y.
= $3.26 / d.
Less maintenance and inspections, less risk of damage.
Resulting 'savings': <= 0%.

Highly likely there are better positions within the electric grid for profitable investment of "$2.3 billion" than in households.

"Resulting 'savings': <= 0%"
I have been doing similar calculations around viability of renewables for years and always end up with the same result, namely that the resulting savings are less than 0% (presumably that is why they need to be subsidized)-the results are even more depressing when you factor in the embedded CO2 due to the energy expanded to dig up and process the raw materials required to build the battery in the first place and to then environmentally dispose of it at the end of its life.

"I have been doing similar calculations around viability of renewables for years and always end up with the same result, namely that the resulting savings are less than 0%":

The price of electricity is insufficient to allow current household batteries to make savings, over their 'life cycle', in most circumstances.

Cheaper per kWh, longer 'lived' batteries are required.

What sad individual level arithmetic for a common good that addresses one of the major cost externalities of our time

I would have thought cheap reliable power was a common good. Which is not what we get from renewables.
Austraia is wasting hundreds of billions of dollars on some quixotic fantasy taht anythng we do in Australia will make a shred of difference.

We would have made a bigger difference if we had ket using coal and not allowed manufacturing to go to China, India and SE Asia where they burn brown coal and do not have our strict environmental laws.

What naivety leads to the assertion it is "a common good", to dig up all the minerals, pollute the environment, manufacture a battery, which is disposable and saves stuff all electricity. Really. Look at the science and the maths.

Around early march Dick Smith rang Australia All Over, he bought an EV & solar battery, after 4 days his EV wasn’t fully charged. He rang the company who said ”you had 4 overcast days you need a bigger battery”. He paid $38K for the battery. Checkout The Alliance episode 5 with Ticky Fullerton & hear Lindsay Partridge talk about Brickworks & energy. If you think renewable are the answer you’ll change your mind next IQ test , election. The more you understand the more you realise you don’t. Seven thousand C size batteries in an average EV, Albo could recycle them an become world leader, beats burying them. Checkout countries using nuclear energy, it’ll prove Labor are lying. Oh to be green!! You’re a head of the game as usual Noel.

Interesting arguments here, thanks to all.

Economics aside, what are the energy requirements to build and install a solar panel system with battery? Just wondering if the energy saved over a typical panel/ battery life period (says 10) exceeds the energy used to produce the system?

Modelling done by various global energy think tanks indicates that it would require more oil resources than the world possesses to produce enough solar/global power supply to meet demand. Nate Hagens (The Great Simplification podcast) a former Goldman Sachs energy trader, Comments that whilst reducing our carbon footprint is critical, the battery/solar panel solution is only kicking the can (problem) down the road for 20 years. Hence the need to reduce global energy demand (good luck with that) and keep investing in other finding better alternates (fusion-still being developed if possible).

So back to my original query, I wonder if the environmental benefits of individual house solar stacks up? Clearly the economics of it don’t from both the article and commentary. Perhaps more national grid solar hybrid power rather than individual solar?

Thank you Noel for a thought provoking article. Many of the comments exhibit both a range of different conclusions and confusions.

This leads to a reflection, that I have made before, that Australia has today ended up with a national energy policy that was never planned. It is the result of financial calamity, mismanagement and greed.

When I entered employment and became aware of power bills and costs, it was a publicly owned and run by state government enterprises. Generation and distribution of power was a essential public service.

These public assets have been sold, first by the Victorian State Government that had financially collapsed in the 1980s. Other state governments followed in an attempt to raise funds and to eliminate the need to maintain or upgrade power generation and/or distribution provision for their constituents.

No one thought to direct the investment bank sales advisors to maintain some public ownership through government, of the assets. They were sold to enterprises focussed on profit - i.e. mainly rent seekers of an essential service.

Amongst these players are generators ( low returns on high levels of capital), wholesale traders ( leveraged operators), retailers ( resellers from wholesalers) , power line owners ( rent seekers who prefer to not overly invest if they can avoid it) and households now trying to work out what they should do ( to solar or not to solar?).

We can reflect as to whether a essential public service was transferred to better operators? To more efficient operators? Or to parties who have developed a power grid in the national interest?

Our power supply and related markets present as a mess. Its development and future is confused and consumed by clean, alternative, decarbonised and nuclear debates. All of which have now led us to where?

Clearly and in the past we developed coal fired generators because we had an abundance of coal? That coal was also exported (and still is ) to countries that use it for power generation.

We have abundant gas which we export as LNG to other countries who use it for power generation. We have not retained enough of our abundant production for our domestic use.

Today we have an abundance of uranium which we export to range of countries that use it for power generation - but we don’t.

Clearly solar energy and batteries is part of a solution. However, apart from abundant sun we also possess the majority of the ingredients to make solar batteries - but we don’t.

We also have over $4 trillion of super - much of which now flows into the US who seemingly does not want to trade fairly with us. We therefore have abundant capital to fund Australia’s future power needs.

We have a AAA Commonwealth Government with relative low debt. Also we have many financially astute bankers who understand leasing - but we have not created a solar battery leasing service funded by super and guaranteed by the government.

Makes me think!

"We also have over $4 trillion of super - much of which now flows into the US who seemingly does not want to trade fairly with us. We therefore have abundant capital to fund Australia’s future power needs."

Dangerous socialist thinking, just like Jim Chalmers! Superannuation belongs to the individual, who is forced to contribute to it and denied access until a certain age. It is our money that must be invested to get the best possible return not invested where governments decide. As for the USA, look at Vanguards long term return graph of different asset classes and it's obvious why investors need USA exposure and will continue to do so! Perhaps superannuation to build affordable and social housing too, often for those that lack discipline and savings enough to provide for themselves like most of us do? Apparently government can build houses cheaper than experienced builders and get a better return than market rate. Amazing!

Why should we trust government and politicians with our superannuation when they consistently spend our taxes irresponsibly, are guilty of egregious waste and blatant populist vote buying and have destroyed any trust that people may have had! The current crop of politicians IMHO, with a few exceptions, are banal, uninspiring and lacking talent, intellect, vision and guts.

Thanks James

It’s a much bigger issue that should not be railroaded by emotion. I will give you a live example below which the market and electorate us ignoring.

Super and Pension Funds have traditionally been structured to invest 40% of their assets in Government bonds. The so- called 40:60 structure.

The concept of government guaranteed or underwritten returns is not new. That is what a Government bond is and it is priced against changing market risks - but its return is known.

Infrastructure bonds - Government guaranteed - investing in strategic assets that have a public policy focus and lower the cost of living for today’s and future generations should be investigated and not dismissed. Better still if they generate a higher return than bonds.

In closing - have you followed Transurban?

Is the subsidisation to road users of indexed tolls by the NSW government socialism?

Super funds get a yield underwritten by the NSW Government. So super funds are investing in a socialist supported toll road!

I've a lot of respect for Mr. Whittaker, but this is an overly simplistic review. Mr. Whittaker's "Typical day in in a household with solar panels and a battery" is far from our experience - in not quite mid latitude (for Australia) Sydney, our battery fully covers our consumption except for 6 weeks or so of short winter days. Fully electric household, $23k solar & battery investment, maximum self consumption saving ~$2,800 p.a = approx 8 year ROI. Compared to the ROI on a new car + fuel after that period of time, it's a no brainer. Historically, Governments have subsidised new technology in one way or another; in that respect Labor's policy hits the mark. Should it be means tested ? - that's really where the debate needs to be IMHO.

I expect your ROI would have been higher if you had gone solar only and avoided the cost of the battery?

"self consumption saving ~$2,800 p.a.":
= 2800 / 0.05 / 365
= 153 kWh / d.

'The average daily electricity usage for Australian households ranges from roughly 16.73 kWh per day to around 20 kWh per day, depending on factors like household size and climate. A three-person household generally consumes around 18.71 kWh/day.'

Err; Cost of electricity not imported at retail rate, not Feed In Tariff?

= 2800 / 0.30 / 365
= 25.6 kWh / d.

Err; Retail rate, not Feed In Tariff:
= 2800 / 0.30 / 365
= 26 kWh / d.

My past experience on solar panels is interesting. I installed panels in 2011 when there was a $0.44/kWh SA government feed-in tariff until 2028, plus $0.10/kWh retailer feed-in tariff. Allowing for my installation's imperfect alignment to the sun and taking account of our ability to schedule some usage to night so as to maximise export, the payback time was 7 years - just acceptable.
When the government feed-in tariff to new installations was subsequently reduced, guess what happened to panel cost and payback times: panel prices reduced! My re-calculated payback time would have stayed the same 7 years. The ***** panel suppliers/installers had responded to the reduction in government subsidy by lowering prices!
It seems to me that the same will happen with any freebie provided by government for panels or batteries - there will be a price increase by suppliers/installers to soak up the government funding while making the installation just acceptable to buyers.

My 15Kw solar panels installed 15 years ago now export around 1Kwh/daily - 50 odd cents. They are near the end of their life, but thanks to calculations above and below no way I'd replace with 6Kw system + battery. I'd love to know whether a Heat Pump/Exchanger would be good for our 2 person family hot water needs, and if this would be a better option all round. Use less gas which the Greens would love. Maybe SHY (Senator Sarah Hansen-Young) could follow up for me?

Your stats surprise me somewhat as solar panels of that era were accredited to have about 90% capability at ten years and 80% capability at 20 years of age, and a useful life of about 40 years. Output is measured at 25 deg. Celsius for reference purposes. 15Kw solar at a reasonable angle should be expected to export about 30%+ of daily production in a normal household which would equate on a normal day to 40+ KWh. In the event you run large consumption aircon during the day these figures would drop dramatically. Maybe your 50 odd cents refers to 10KWh per day, not 1KWh at the current rate of 0.05 per KWh F.I.T. I suggest you have your panels inspected as damage such as microcracking may have occurred in the intervening years from unknown activities.

You have just discovered how things work !

Welfare for the rich. The masses are struggling with cost of living, while $thousands are being handed out on a scheme like this. No wonder Labor’s vote keeps falling in its old battler heartland.
Their cost of living plan to wipe off 20% of uni debt will no doubt help the cleaners, retail workers, miners, factory workers, etc.

Combine it with a WA Synergy EV plan with sensible and flexible electricity use makes great sense to me. My electricity is basically for free, I only pay to be connected to the grid. Owning an EV and a battery makes sense, especially if you take the petrol savings into consideration as well. Initial capital outlay is big, but as with my solar installation 15 years ago it will pay for itself and more, in much less then 15 years. So many other benefits as well.

I’m surprised more people aren’t concerned about the AEMO’s “request” to provide them authority to turn off household solar power during excess peak production periods. So when there is too much solar energy being produced for the grid to handle they’ll shut off household solar power for those areas. This means those households will no longer be generating power from their solar panels (not even for their own use, or to recharge their batteries). These households will then be forced to consume electricity from the grid (I’m unsure with current systems if they could still draw power from a household battery). If the AEMO is not given the authority they will be forced to use more draconian methods ie. over-voltage the 300KVA powerlines to trip them offline, essentially blackout the whole area. Needless to say they will get the authority. WA & SA have given, expect other states will follow.
Unsure how often this will happen, but the more solar panels on roof tops, presumably the more likely.

I look forward to Prof Andrew Blakers providing a relevant update: https://360info.org/solar-puts-us-in-fast-lane-to-100-renewables/

Even with the home owner paying two thirds of the cost, the storage per KWH is likely to cost the government more than installing grid scale batteries. A grid scale battery has a cost of installation of a few cent per KWH because you are installing hundreds of megawatts at once. A home battery has an installation cost of approx $5,000 divided by the capacity. Then the grid battery in a shipping container size is obviously much cheaper to build and ship than the thousands of small home batteries needed to get equivalent storage. The integration between grid needs and the battery is also likely to be better at grid scale and there is likely to be more quality control of the battery resulting in longer life. So really the policy, like so many others, is an election bribe.

"the policy ... is an election bribe":

Why would not the electorate be bribeable with community / grid batteries?

No personal cost or bother. Rebate to consumers of portion of profit on battery operation.

Better political marketing required?

Yes of course the electorate is bribeable. We show that time and again at detriment to solutions to issues that may offer long term benefit at less short term gain. It is not the politicians fault, it is ours. We get what we demand at the ballot box and we demand hand outs.

You have forgotten that one of the big issues is distribution and fluctuation in demand and home. Batteries help both issues

I've got 7kW of solar panels on my roof. Recently I obtained my meter data which provided me the total kWh that I had exported back to the grid in the last 12 months. Then I calculated the payback period on installing a battery that had been quoted, and it was a whopping 25-year payback. Then sent the detail to a mate of mine who works in the solar/battery industry to check and he said my calculations were spot on. Needless to say, there is no chance of me wasting money installing a battery.

"calculated the payback period on installing a battery that had been quoted, and it was a whopping 25-year payback.":

Include depreciation, inflation, maintenance, risk, alternate investment to calculate battery investment return rate?

A terrible investment on any measure. This is nothing more than an election bribe by Labor using (our) taxes.

"A terrible investment on any measure":

Take up rate, cost to government, loss of greenie votes likely to be negligible.

Your "meter data" should be indicated on each bill you receive from your retailer each billing period. We use monthly billing to lower charge at time of payment and I peruse the usage and production rates of our 8 KW solar system and so far our bills range from zero to $68.00 per month with a yearly total around $380.00 p.a. This in a two person retired couple household.

Did you take into account the electricity that you consumed as well as the electricity returned to the grid? If your panels are wi-fi enabled you should be able to get that information. My provider tells me how much is donated (sorry, sold) to them each month from the panels and I can see that most months except June, July and August my production exceeds my consumption so I try to load balance across daylight hours and use less in the evening. Frankly, I’m quite happy to run appliances during the day so that I don’t have to send it back to the grid for a pittance.

I tracked the dollar savings for three years (what I consumed from the panels at the going rate to purchase from the grid, and what I received from the supplier for the exported power) and consistently showed a 10 year payback period. The killer for me is the standing charge which most months exceeds the amount I pay to the provider for power consumed from the grid.

Pink bats or school Cola’s anyone?

Another dumb policy that will create an installation stampede for little long term benefit. Why can’t Canberra understand basic economic laws of supply and demand? When you increase the supply of capital (demand) on a fixed supply of goods the price goes up. Look how EVERY Housing numbskull policy worked out of Canberra!!!! Not.

Nuclear lasts 50-100 years and doesn’t need any new power lines costing 10’s of billions. Renewables will become a valuable part of the system. With current technologies they will never be all of the system and thinking new technology will save is too risky for our energy system. In the 80’s we thought we’d have flying cars by now.

Noel seems to overlook, or not be aware of, the electricity plans where the "retailer" controls the battery to charge from a system's own excess or buy from grid when the power is cheap, then sell the power back to the grid when power is dear. In my 12-month experience with a battery system, this materially changes the economics for the better for me and for the grid (and hence all users). As an example, over the last 12 months, my system has sold 2 mWh of power into the grid, mostly in the early evening when the great mass of rooftop solar is no longer producing and usually at FIT's significantly higher than my import power costs (both that needed for the house when the rooftop+battery is not enough and the extra used to charge up the battery). If a million households did what I did over the last 12 months, I believe it equates to 2x Eraring power stations at that station's full capacity, all when the sun is no longer shining.

The manufacturer's warranty on batteries is approximately 7 years on average . I have had failures of batteries inside of warranty . Good luck with getting more than 10 years out of your investment .

A couple of points that I don't see mentioned but were important in our decision to upgrade our solar and add batteries:
They allow us to utilise power produced in excess of our cap (5kW).
Our system includes backup which we think is vital and very comforting in bush fire season.
We like the feeling of slightly greater resilience as climate activity gets more brutal
If it helps other folk out, so much the better.

After all these comments, and not a single comment or mention about wind generation, which is renewable. (There are others too!) Solar - also renewable is definitely only available during daylight hours... What the batteries are really doing is improving our (collective) ability to 'soak up' excess renewable energy - from whatever source that is generated. I'm disappointed that we are forced to 'curtail', or 'dump' excess energy, instead of storing it in batteries, or hydro systems, or any other 'storage' technology.

Let's just start to consider the wider opportunities here. More storage = less upgrading required for transmission. More storage = less carbon based generation. More storage = absolutely no need or reason for Nuclear - an incredibly dirty and overwhelmingly expensive fuel and generation system. I mean, what don't we get about the cost??? A cost shared by every Australian.

More storage equals less upgrading required for transmission? Whether it's used daily or once a month, the transmission capability still needs to be installed, unless you just go without when the batteries run out.

You need to include the cost of capital in your calculations, so a $12k cost for a battery would be around $720 a year (based on what $12k parked against your mortgage offset would save), you also need to account for the loss of FIT to charge the battery with solar and the 95% at best efficiency. So your per kWh “savings” on a 30c per kWh plan would be 24.5c after accounting for FIT and the battery would take 30 years to pay itself back even if you assume 12kWh a day for 365 days a year and ignore its capacity losses over time.

There is a possibility of a shorter payback period for a select few people

If you are a part pensioner, spending money on a solar battery will reduce your assets (for centrelink purposes), by putting the asset value into your non-assessible home. this will increase your pension. So now the benefit to you is the electricity bill reduction plus an increased pension. This benefit will not be of any benefit for full pensioners or self funded retirees, so we really are talking about a very small number of people

"the benefit to you is the electricity bill reduction plus an increased pension":

Spend and increase in Age Pension 7.8% / y, save and earn interest 5% / y, inflation 3% / y, tax 0% / y:
= (1 + 7.8% - 5%) / (1 + 3%) - 1
= -0.1942%

Solar PV is a depreciating asset (ATO: 10% per year for the diminishing value method of depreciation).
Value added to home is limited to capital cost to buy and install, unless abnormally cheap.

To be profitable, solar PV would have to save electricity in first year greater then about 10% of PV capital cost.

Every chance rents will be frozen? And the cow jumped over the moon. Poor justification for hid argument.

About 17% of the population is over 65 year old.
If many of them use as much/little electricity as I do, then the cost of solar panels+battery might have a break-even/payback time beyond their life expectancy.
For me, the beak-even is 11 years, so I have to live to 93 to break-even on solar+battery (just before I have to renew the end-of-life battery). I’d like to help ameliorate climate change, but it's a doubtful economic proposition.

As Noel says. Just before the cyclone struck it was very cloudy so there was no solar gain. That statement says it all. Solar only works part of the time which is useless. Lets have nuclear electricity and be done with it. Works all the time.
Kevin

The ALP’s solution to everything they fantasise about is to subsidise it (ie, pay for something with other people’s money). And they don’t like means-testing this welfare either! No wonder energy (and other) costs just keep escalating (along with government debt).

Omit to mention that the nuclear plan involves taxpayers meeting the entire cost of the scheme whereas renewables requires only subsidies from the taxpayer. Not hard to figure which is more costly.

You omit that renewables also require essentially a second grid to provide base load power for when the wind doesn't blow and the sun doesn't shine. Something has to replace the coal power stations: gas and/or nuclear. With enough nuclear less renewables would be required. Renewable energy density is terrible - huge amounts of land need to be cleared and then connected with tens of thousands of kilometres of new transmission lines. And don't be fooled by the specious claims that the capacity of either wind or solar is really what they produce!

Does anyone here really believe you can power the entire needs of cities and industry (what little we have left and isn't leaving for foreign shores) with wind, solar, batteries and pumped (inefficient) hydro or green hydrogen?

The "greening" (hardly green when you dig into the production of wind, solar & batteries IF you're really concerned about the environment!) of our energy grid is a virtue signalling, ideology driven act of economic self harm.

If we continue to consume what we do, but pretend it's ok as long as the carbon emissions occur in another country then we truly are all fools. Last time I checked we all live on the same planet!

The nukes remain a govt asset, the batteries never are.
I remember when the left thought public ownership of utilities was a good thing …

The tactic of universal, non-means tested subsidies, is to ensure that the rate of electricity cost increases can be dampened nationwide and so be included in the CPI and of course artificial reduction in electricity cost increases.

The Wholesale cost of Lithium batteries is now $100US a KW. It is ludicrous to be paying $10-15k for a 10kw Tesla battery. A 60kw Tesla vehicle goes for about $60k, so you're paying for the batteries and getting the car for free. This scheme is going to increase demand for batteries, bring more players into the market and see the cost of batteries drop considerably. The economics change considerably when you are paying $5-8k total to have a 10kw battery installed.

You've also conveniently left off the ability to access wholesale power markets as some other commentators have mentioned.

Agreed. I’m getting 9.6kw Longi solar panels and 20kw of VoltX NeoVolt batteries for about 16k installed in QLD. Might not be quite so cheap now the rebate is out but should be close. Includes backup wiring.

Also now compatible with Amber electricity wholesaler automation. Set and forget. And hoping Labor get in so approx 7k rebate. Plus help the environment. So many wins. Tesla is an expensive option, there are others for much less.

What this analysis misses is that the benefit of a battery isn't using your own solar, it's in stabilising the grid. You get this via time of use pricing, especially combined with an EV e.g. via Amber.

No, doesn't work if you're paying 30c/kWh. But in SA at least, excess electricity from rooftop solar in summer can push prices down, even into negative territory. Used intelligently, it can be a windfall. My daughter calculated that her average electricity cost is now 3c/kWh. It made the choice of ICE or EV for their new car a no-brainer.

This is coz of structural issues in the system, but if (and it's a big if) enough home batteries can be installed to avoid building a new gas generator, it's a saving of billions - and that's passed on to everyone via the daily supply charge.

RE ,,,enough home batteries can be installed to avoid building a new gas generator,,,,, What happens when no solar and wind over large areas ? Home battery's will be completely flat and the grid needs to have large capacity to supply the demand from all the places with a flat home battery - for several days ...

You can also charge the battery cheaply from the grid during the day if you don't generate enough surplus from your panels, then use that to avoid expensive peak rate prices, so the annual savings will be greater and repayment time shorter.

The argument about fairness is a red herring; more batteries is good because it allows more renewable energy to be stored for use after dark, which reduces the need for coal-fired power and allows coal power plants to be retired sooner.

We certainly need more grid-scale storage too.

I think as some have alluded to, it's not so cut and dry as you're not taking into account the evolution of energy consumption.

If you get a battery, you're far better off joining a VPP (Virtual Power Plant) and accessing the wholesale market of the national energy grid. This creates a larger arbitrage opportunity rather than paying 30c or not. More like buy sometimes at 5c or less in the day (one I was paid to consume) and sell at 30c or more at peak evening... I've managed to make >$20 per kilowatt once in a blue moon.

The way it's been described to me is that as fossil fuel plants get retired/closed with nothing sufficient to replace this - especially when the sun goes down, it can only get worse and the Government will be begging us all to uptake else see larger price swings/higher fixed rate costs.

The point is, the same way Australia has evolved into EV uptake, energy retailers will have to adapt or lose market share to newcomers who give battery ownership a far better payoff period. Very back of the envelope is my recent adoption of batteries and moving to Amber Electric - so far I'm at 12% rate of return compared to my previous retailer costs. Bring on V2G!

Finally, there's a few comments that as taxpayers it leaves us all footing the bill... yes and no... the price spikes could theoretically be reduced if more were to sell energy to the grid at peak and in turn, lower energy prices for everyone. Perhaps not such a dramatic reduction, but it counts for something.

https://www.amber.com.au/blog/what-renters-and-homeowners-need-to-know-about-batteries

"Amber Electric": https://www.amber.com.au

I tried their calculator using the dumbest / laziest settings, such as no load shifting.
$0.33/kWh = larger than current rate $0.28/kWh.

What rate is achievable with the smartest of settings?

Using https://www.energymadeeasy.gov.au/
and National Metering Identifier from last invoice.

. Origin Advantage Variable ePlus - One Big Switch: $2,510.
. Amber Standing Offer: Fixed Rate: $3,450 per year.

Amber wouldn’t make sense on a fixed rate. But with a battery and the right amount of solar it really stacks up. In my case I estimate an IRR in the high teens. And. that’s an after-tax IRR.

"with a battery and the right amount of solar it really stacks up.":
More if you will, please. What do you have?

"In my case I estimate an IRR in the high teens. And. that’s an after-tax IRR.":
How did you calculate?

Excellent article...
One of the best I have read about this subject .The numbers do not add up. At present panels produce around 480 watts each .I am told that when these are all gone ,New ones are around 600 watts ,so each year panels are getting more efficient.
What will they be in 10 years when your battery is due for replacement .That would no doubt apply to batteries as well ,getting cheaper and more efficient .
The missing point in all this is you can Never STOP PAYING THE SERVICE CHARGE ...........AT PRESENT AROUND 90 CENTS PER DAY AND CLIMBING.............

Typically the more powerful are just bigger. Efficiency has moved very slowly.
A 650W panel on the market is 2384x1303x35 in size
A Trina 450W panel is 1762 x 1134 x 30mm

It doesn't even take into account the interest you could earn on the money!! Great analysis Noel!

Well I must say my experience with solar and batteries has been considerably more positive. I upgraded last year an existing solar-only system to more solar + a battery. The extra 10kw of solar and a 16kw battery was a bit over $20k. I calculate I am saving about $4k a year since installing the system. So that's a 5 year payback.

To make the numbers work I think you need:
1)Relatively high consumption -- we have a 5 bedroom house with AC, pool etc so we use a lot of power
2) Lots of solar -- panels are cheap you wan to to charge the battery every day, not just 200 days per year. It's very rare that I don't charge the battery fully each day
3)Use Amber or a similar retailer that provides wholesale prices. This comes with risk because the price can spike but the battery neuralises this risk. The end result is lower prices and higher feed-in. Last month our usage price averaged 27c but the feed in was 15c. And we used very little from the grid. The only way to get this higher fee- in is to have a battery that can discharge to the grid at peak prices. I have made over $80 in a day on peak days when prices spiked. Doesn't happen oftern but it pays for the rest of the month when it does.
4) Shop around for a good deal. Prices vary widely. I ended up going with a Chinese brand that was quite a bit cheaper than Tesla. So far so good. Time will tell of course.

Almost all the saving is the solar, the battery never pays its cost back.

Batteries: Household or Utility (community / grid)?

My guess is that household batteries are the most expensive and thus least cost and performance effective, but most politically effective.

My modelling of solar +/- battery shows a 'saving', after competing investment, depreciation and damage risk, of about $300 / y.

That the returns are so small shows that function point comparative pricing has siphoned all profits to the various vendors.

Money in the bank pays about the same and is less bother.

Great article,I agree that it doesn't make economic sense. And currently there is little thought to dealing with all the home and EV car batteries at the end of their life span. Probably another bill to pay further reducing any benefit.

Graham W, agree plus bills along way to service, had 2 electrical services $500 each, and cleaning roof panels to maintain peak collection conditions, $300/occasion. Opposite sports field mown 1x/wk with large dust blow-off paradoxically occuring in sunny conditions, not all dust is cleaned off by rain but causes vague patches of mud on which lichen grows. Will never replace it at its' life end.

In regard to "surplus goes to the grid — and as we all know, there’s not much money in that."

I notice the extraordinary markup between what the retailers pay per kwh for solar feed-in tariffs. That is to householders and what they charge the same people in the opposite direction. I know some that are receiving only 3 cents kwh feed in. Looks like the largest markups in the history of mankind.

A good idea to reduce electricity bills. Just do generation and transmission. The retailers are ‘rent seekers’ who are basically ‘clipping the ticket’. Overall thousands of personnel that do not do anything to get power to the door. Such as; marketing, sales forces, large call centres, trading, tactical analysis, directors, CEOs, managements, administrations, I.T. depts, purchasing, personnel depts, safety, legal depts., multiple new plush CBD city offices. Having to 'lawyer up'. Maybe redeploy them into extra transmission for renewables. Many repetitions add enormous costs for the users with little added practical value. These ongoing costs are added to the actual flow from the generators to the user. Multiply the number of retailers by their internal departments. These costs are 'mind-blowing'.

Retailers applying markups are just basically clipping the ticket and are rent seekers. No longer having 'bricks and mortar' style companies aggravates this issue also. They can obfuscate with 'smoke and mirrors'. Look what happened in the USA with the Brian Thompson issue. The guy that allegedly shot him is regarded as a hero by a few there. I am not condoning violence but that is what can result when faceless organisations deny, defer, delay, depose (hope you 'go away' etc). The electricity market is similar.

A good idea to reduce electricity bills. Just do generation and transmission.

I'm just going through the process of renewing our electricity plan now. Our current provider doesn't seem to be interested in keeping our business, so went to the government comparison site that uses your actual power usage numbers to locate the best deals for you and I had never even heard of most of the retailers it threw up in the results.

I can find a better deal than my current provider easily enough amongst companies that are actual traditional energy provision companies by checking the plans on their sites, - it'll cost me a couple of hundred dollars a year extra but I don't care to deal with companies with no history in the energy business. More fool me, I guess.

Ditto Geoff, won't deal with companies with little history and more so when no historical vested interest in electrical infrastructure.

How does having an ev and charging at home 90% of the time effect the payback period of a home battery. My ev can be used in a blackout perhaps I do not need a battery?

Yep - I thought just use the EV battery. It is also much larger in capacity ?

That is called V2G -- vehicle to grid. It's very early days for this technology but it does hold a lot of promise.

I agree if home battery only stores $3.6 worth of power then V2G is much more important since EV batteries are a minimum of 4 times the size of the quoted Powerwall.

You will not be generally able to use your home battery or the EV battery during an outage. This is because If workers are working nearby, they will be zapped from your and other close systems. You have to pay a considerable extra amount to be able to use your batteries in an outage. This is an Outage Proof system, expensive and needs the approval of the power folk. Be also aware that the power folk can use your battery power up, for little reward to you if they have a sudden need for your power in the grid.

We plug all our essentials directly into the car during blackouts and there is no safety issues for any workers.

The proposal is a great move by the government

It gets people to voluntarily purchase batteries, and pay for most of the battery cost.

The alternative is for the government to install big batteries somewhere, and in doing so the government incurs 100% of the cost

So subsidizing people to buy their own batteries saves the government money.

What's more, people think they are saving lots of money in electricity bills

It is extremely expensive power and extreme fire risk. Stupid use of taxpayer's money.

Yes I agree with you.
This is an initiative that works for the government and the country as a whole but not so much for the individual buying the battery.
Of course with the way energy costs are going up and I think will continue to go up under a Labor/Greens coalition, the economics for the individual will no doubt improve.

Whats with using maths to analyse a Labor/Greens/Teals brain fart? The definition of futile. Or would that be thinking Australia on its own can reverse all global emissions on our own. Unfortunately we need 3 years of this unholy alliance to learn a hard lesson. Buckle up.

Excellent review - in outer Melbourne we have two solar systems, the 6 panel now 15 yo 1.1 Kw system provided 15 years of 60 cent rebates so I priced its replacement with new panels and a battery - $19,000 as need 7 x 440w panels to fully change the battery, they offered 5 year repayments of $70 a week which would be about $50 cash out and $20 cash from free electricity. Just as Noel points out, the break even is like 2037, no way Albo. I worked for one of the Chinese Government funded manufacturers for a few years, within the next five years perhaps 50% of existing panels will reduce output by 50% or more, who is going to fund the $150 billion 5 year full replacement cost - not me.

But you will be paying David.
The half of Australia paying taxes will be funding the replacement of these failing systems because the other (govt. dependent) half will be voting Labour/Greens to keep them in power (it is the best way to keep the welfare flowing to if you are on welfare).
LOL !

Note: the reality is that Storage and Generation technology has not caught up with the green dreams yet. It will eventually but until then it is ideological faith and you are going to pay for this.

Yes I agree I could be paying - so I am well advanced in setting up Lean Start Up businesses in Hyderabad and Shanghai to leave nothing much of taxable value here - Price's Law (Square root employee number does 50% of all firm's work) shows that you only need to the entice perhaps 6% or so who do 50% of the work in a Brain Drain strategy to the USA and China and welfare days are gone.