As we all know, January is the hottest summer month in South Australia with extreme weather and abundant sunshine at an average temperature of 23°C.
Ideally, this is the best month for solar (when sunshine hits solar panels the most) and the perfect time to consider adding backup batteries to your solar PV system for a bunch of reasons.
When combined with a solar system, residential battery storage saves money while helping to mitigate the effects of global warming.
Home battery storage also plays a critical role during spontaneous power outages and provides relief to the general energy infrastructure on days when the demand on the grid is at its peak.
During cloudier days, solar may not supply adequate energy to power your home and hence the only other remedy to keep your lights on is often the grid, albeit electricity being one of the priciest utility bills.
With that, it is easier to see why home battery installations in SA are an indispensable constituent of sustainability and the missing part in the renewables equation.
The Liberal government of South Australia has finally released details of the Home Battery Scheme that is long overdue. The scheme is expected to provide $100 million worth of state government grants to 40,000 homes, to install residential battery storage systems.
Eligible customers with solar panels will receive up to $6,000 in individual grants to purchase storage batteries, while those without rooftop solar, or who wish to upgrade their existing system will be offered $100 million in loans by the Clean Energy Finance Corporation to purchase solar and battery systems.
All the storage batteries offered by the scheme are powerful enough to participate in a virtual power plant, meaning they can be connected and used by a third-party customer to deliver grid services to others. Additionally, there are no eligibility requirements for individual households willing to register with the plan.
The Home Battery Scheme is so far the largest government subsidy battery storage project in Australia. Currently, about two million Australian homes have installed rooftop solar with just 20,000 of them installing residential storage systems in 2017.
Energy storage at home is becoming inevitable, and governments and other stakeholders in the energy market such as operators, are working hard to fast-track it, thanks to a host of benefits that come with the use of batteries to maximise the output from solar panels.
This need is felt strongly in South Australia, which has installed more than 230,000 solar systems and is expected to start generating more solar energy than the total capacity demanded by the state in the near future.
According to the Australian Energy Market Operator, this in itself is a challenge, so installing more home backup batteries would come in handy to help manage the situation.
Steven Marshall, the Liberal Premier indicated his plan to offer $100 million in grants to 40,000 homes in SA during last year’s lead up campaigns to the elections.
At the time, the incumbent Labor government responded to Liberal’s plan with a Tesla-inspired proposal to offer upfront financing for a 5kW rooftop solar system combined with a 13 kWh storage battery to participate in a 250-megawatt virtual power plant, which is considered to be the world’s biggest.
Various groups including Sonnen also made similar proposals but on a smaller scale, like setting up a manufacturing base in SA. Last Sunday, Sonnen announced that it would proceed with plans to build a battery manufacturing facility at Elizabeth’s old GM Holden site. The company added that it had the capability to develop a VPP with a capacity ranging between 150 megawatts and 250 megawatts, all dependent on the 10,000 storage batteries it would create each year.
Tesla is also looking to set up a manufacturing plant in Adelaide, “if the conditions are right”.
Apparently, the initial 1,100 installations of Tesla’s VPP will be co-funded by the federal government, although the fate of the rest of the components – installing solar and storage for additional 49,000 low-income households – would simply depend on the availability of funds and the interest of new retailers.
In a statement, the Liberal government said its grants would take effect from next month, but Australian Solar Quotes has found out that the funds recently allocated in the budget will only enable about 5,000 homes to install battery storage during this financial year. The subsidy will be capped at a maximum of $6000 and the amount offered to eligible households will vary based on the size of the storage battery acquired.
The new subsidy will be graded in support to enable energy concession holders such as veterans, pensioners and low-income households in South Australia to receive $600/kWh compared to that of other households at $500/kWh.
Based on the household’s preferred storage system and brand, this would be equivalent to more than half of the true cost of installing a battery storage system, pushing the investment towards a seven-year payback, though this calculation would have to consider several factors including size, usage and location.
Energy Concession Holder
$600.00 per kilowatt-hour (kWh)
All Other Households
$500.00 per kilowatt-hour (kWh)
Notably, the grant is designed to work on a reducing balance basis annually, depending on the existing costs of the storage battery and its rate of take-up. On a closer look, the subsidy appears to be front-loaded at the beginning of the scheme, and then gradually reduces to accommodate all the 40,000 households.
Dan van Holst Pellekaan, the energy minister noted that the agreement with the CEFC was crucial in helping the governments to beat the high upfront costs of storage batteries. He further said that the partnership would enable the government to help households to overcome the upfront cost which has been a real bottleneck in their quest to access storage technology. The scheme would offer participating households more flexible, competitive loans when in need, alongside the subsidies.
According to the government, the scheme will help reduce the high demand experienced on the network especially during peak periods, hence lowering prices for all households within the state.
In a statement, Ian Learmonth CEO of CEFC said he was optimistic that once finalised, the deal with the South Australian government would “potentially provide a model for other home storage investments.”
The grant will only apply to the battery component while CEFC will finance the purchase of new or additional solar and battery systems. Pellekaan also noted that both the subsidy cap and subsidy levels are poised to reduce in future as competition on the market intensifies and the costs of home battery systems fall. Any home battery storage provider will first have to qualify as a “system provider” and then register with the government’s dedicated website. Only providers with storage batteries having a capacity that would enable them to be recruited into a VPP, need to apply.
As part of this qualification process, interested suppliers and installers of home storage battery systems will have to specify the extent to which their solutions would contribute to SA’s state government. The government has also promised to give priority to system providers dedicated to installing only approved battery storage systems assembled or manufactured in South Australia.
Eligible system providers that dedicate themselves to selling locally assembled or manufactured storage battery systems will enjoy a nine-week period of exclusivity once the scheme is flagged off in October.