Climate Tech

NSW is ramping up its sweeteners for household batteries

- May 24, 2024 2 MIN READ
solar panels
Photo: AdobeStock.
Homeowners and businesses will be offered up to $2400 by the NSW government to install a battery to store solar under a new incentive program kicking off later this year

The new incentive is part of the Peak Demand Reduction Scheme and includes:

  • Between $1600 and $2400 off the up-front installation cost of a household battery for homes and business with existing solar.
  • For homes and businesses wanting to install solar, the incentive will be considered in the quote for a new solar and battery system installation.
  • A $250 to $400 incentive for connecting a battery to a Virtual Power Plant. It can be claimed a second time, three years on.

The incentives will be available from November 1 and  accessed through approved suppliers, to accredited over the next six months.

NSW climate change and energy Penny Sharpe said more than one million NSW households have solar panels on their roofs and adding a battery mean they work around the clock.

“We are bringing down the upfront cost of batteries for households and businesses to make them more accessible,” she said.

“This is a targeted action to support those with solar to take the next step to lowering their bills by using renewable energy. It also supports the state’s transition to renewable energy.”

Batteries can cost between $9000 and $25,000 depending on their size. The most popular choice, a 13.5kWh Tesla Powerwall 2 costs $15,500.

Taking into account the total cost for a controller, inverter and installation, installing a battery can cost between $1000 and $2000 per kWh (kilowatt-hour), so the incentive is likely to cut the cost by around 10%.

A household of four people uses on average just over 21kWh of power a day.

And as feed-in tariffs plunge for households feeding their solar-generated power into the grib, the NSW government is also keen to connect batteries to Virtual Power Plants (VPPs) so households and businesses can share excess energy.

The Australian Renewable Energy Agency (ARENA), which is overseeing the federal government’s $1 billion “Solar Sunshot” program to increase local manufacturing, estimates that Australian has more than 2.5 million solar systems generating a combined 10 GW of energy, with around 73,000 home battery systems nationally storing almost 1.1 GW of power.

A VPP would release power to the grid when it’s needed to address frequency and voltage imbalances, local disruptions or disturbances and keep the network stable.

ARENA has explained how they work here.

The government is also hoping that VPPs will help address peak demand – eg moments like a hot day when everyone is using air conditioners  – in order to reduce how much renewable energy infrastructure that needs to be built, saving taxpayers moment in the process.

Details on the NSW household battery incentive program are available at energy.nsw.gov.au/batteries

The announcement comes the day after the state government cut a deal with Origin Energy to keep the Eraring coal-fired power station open until August 2027 – two years longer than its planned closure in 15 months, at a cost of up to $450 million, amid concerns of power shortages as the transition of renewables continues at a slower pace than intended.
Yesterday the federal government announced a National Battery Strategy as part of its Future Made in Australia policy, following on from funding announced in the budget.

It includes $523.2 million for production incentive to promote the development of battery manufacturing capabilities, in a program managed by ARENA, as well as $20.3 million for  battery research.