Australia’s Residential Batteries Plan Will Lower Utility Costs For Its Citizens

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While the current US government, which is mostly composed of former juvenile delinquents, is busy finding new and interesting ways to make living in America more expensive, the government of Australia is doing quite the opposite. Its latest plan calls for subsidizing the cost of residential batteries, a proposal it says will dramatically lower the amount that its citizens spend each month on utility bills. The $2.3 billion program is designed to lower the cost of residential batteries by about 30 percent.

According to the Australian Broadcasting System (the other ABC), the Cheaper Home Batteries subsidy will be delivered through the same government initiative that applies to rooftop solar installations. That program, which is due to end in 2030, is currently limited to solar panels, heat pumps, water heaters, wind turbines, and hydro systems. Expanding it to include batteries will cost $2.3 billion, an amount that has already been factored into the country’s latest budget.

About 320,000 Australian homes already have residential storage batteries according to solar energy consultancy SunWiz, and about a third of the homes that installed a solar system in 2024 opted to get a battery at the same time. That means about 75,000 new battery storage systems were installed across Australia last year — up 47 percent from 2023. The government expects the Cheaper Home Batteries program will help the nation get to 1 million new batteries by 2030.

An analysis prepared by the Department of Climate Change, Energy, Environment, and Water found a household with solar and a battery system could save up to $2,300 a year, or about 90 percent of the yearly utility bill for a typical Australian household. The Guardian points out the Labor government headed by Anthony Albanese is facing a national election this year, so there is definitely a political component to this plan. But while the US wants to limit Americans’ access to renewable energy to please fossil fuel companies, Australia is actually thinking about what its citizens need and what is best for the Earth.

Prime Minister Albanese has framed the new program as a cost of living measure that “is good for power bills and good for the environment.” Clearly, he is suffering from a “woke mind virus.” Clean energy advocates and crossbench MPs had been urging the federal government to do more to subsidize the upfront cost of solar panels, electric appliances, and household batteries to slash power bills while cutting greenhouse gas emissions. Chris Bowen, the minister for energy and climate change, told ABC, “Households and businesses having batteries means we can keep solar energy on tap and keep energy bills down consistently.”

Batteries Are All About Time Shifting

“If you think about a solar battery really as time shifting energy, [shifting] zero-cost energy from the middle of the day to that evening peak, that’s what solar batteries do,” the Smart Energy Council’s chief executive officer, John Grimes, told ABC. “They take that free energy from the middle of the day and time shift it to the evening peak period. If you’ve got one battery, it probably doesn’t matter. But if you’ve got a million or 2 million or 4 million batteries, that’s a really, really, really big help.”

The Smart Energy Council analysed the data for more than 9,000 Australian homes to see what size battery would cover them for that busy time in the evening when everyone is at home and power is expensive. “People have it in mind that you’ve got to have very large batteries. It’s not necessarily true. By the time you get to about a six or a seven kilowatt hour battery, you’re covering above 90 per cent of all use cases for houses in Australia,” Grimes said.

Rewiring Australia CEO Francis Vierboom said Australia is a perfect fit for household batteries. “We’ve been so successful with solar, it does put Australia out in front on this challenge. We’ve got a really strong renewable grid already that’s already over 40 per cent powered by renewables.  We get to kind of demonstrate and develop the technologies and business models here that the world is going to be following as they work their way through this transition.”

He added, “Right now, a household that’s got two parents and two kids probably uses about on average 30 kilowatts a day. If you’ve got a typical, like six kilowatt, [solar] system on a typical sunny day in spring, you’ll probably generate about 30 kilowatts of energy, but it’ll all happen at midday.” He agreed that a six to seven kilowatt-hour battery will cover most daily needs during off-peak hours.

The Smart Energy Council said there are 77 different types of residential storage batteries available in the Australian market, with the least expensive starting as low as $4,000. A 10 kWh battery, which is the size of a typical home battery, including the inverter, should cost about $10,000 before the subsidy is applied. Readers in the US will note those prices seem considerably lower than they are used to seeing. Rooftop solar prices in the US are also significantly higher and are about to go higher still thanks to the boneheaded tariffs announced last week by the US government.

According to modeling by the Labor government, a household with existing rooftop solar could save up to $1,100 extra off their power bill every year. Adding a new rooftop solar system together with a residential battery would save a homeowner about $2,300 a year — which is roughly 90 percent of what a typical family would spend for electricity over the course of a year.

Rewiring Australia told ABC that a solar-plus-battery system “flattens” the costs of energy going forward and protects homes from extreme fluctuations in electricity costs. “The energy system is going to keep being volatile for the next 10 years in Australia. I think everyone can agree about that. And a battery is a great way to make your house more resilient and give you a bit more of the upside of that volatility,” Francis Vierboom said.

In Australia today, there is such an abundance of solar energy available in the middle of the day that people who have rooftop solar currently get paid next to nothing for selling it back to the grid in real time. Having batteries changes that equation and allows homeowners to maximize the value of their self-generated electricity.

Bruce Mountain, the head of the Victoria Energy Policy Center at Victoria University said, “Batteries make good sense for households with solar now because the export price that they’re getting for the surplus that they feed into grid and most households — roughly two-thirds of the electricity from their rooftop solar is actually sold into the grid — they’re now getting almost nothing for that. I think [the new subsidy program is] going to make a big difference to the cost of installation and the attractiveness to different households, most notably to the larger households with larger amounts of solar. I imagine that such a policy will see the rapid expansion of storage.”

“On resilience, batteries are a massive upgrade and make a big difference. In your own house, you can definitely set up a battery so that if the grid goes down, you can run your house on your battery and you can have your solar panels recharging your battery,” Vierboom said. “So even if your house is offline and off the grid for a week, as long as the sun’s coming out, you’ll be able to keep powering your house and especially all the essential things that you need in that house, the battery can cover easily like the fridge and lighting and so on.”

Benefits For Renters

It is customary in the US to hear how people with rooftop solar are putting extra financial burdens on those who don’t have it, particularly renters. Australia sees this not as a negative but as a positive. The electricity system works as a market, so when there is that spike in demand for power in the evening, it drives the wholesale cost of power up. Most people don’t pay the wholesale price for power, but those price spikes are accounted for when an energy retailer works out how much to charge. If more Australian homes have batteries, they won’t be drawing power from the grid at those critical moments.

“If we didn’t have that spike in demand every day, then the amount of infrastructure would be proportionately reduced. So by increasing household storage, power prices actually fall for everyone,” John Grimes said. The Smart Energy Council modeled what would happen to peak power prices if there were 1 million batteries installed in Australia, and found that it would save $1.3 billion every year on wholesale power prices.

Maximizing solar power and reducing the amount of fossil fuel power used in Australia is a major win for the climate. At the present time, methane gas and coal are burned to provide electricity during periods of peak demand. “Getting rid of that evening peak through greater use of batteries, if they’ve been charged by solar electricity, allows you to close down inflexible coal fired generators, which in turn allows you to continue to expand clean energy. So the addition of storage is essential for the energy transition,” Bruce Mountain said.

In other words, if you live below the Equator, more batteries in homes and small business are a win for all utility customers, but north of the Equator, they are placing an unfair burden on those who don’t have them. One of those belief systems is correct, but which one?