Helping more households capture solar power in a battery could have a market-wide impact, although some could miss out on the biggest savings, reports JENNIFER DUDLEY-NICHOLSON.

Powering air conditioners in every room, a washing machine, clothes dryer, electric stove and other appliances used to cost Mamoon Reza more than $1200 every year, even with rooftop solar.

When his family-of-four installed a battery in 2023, however, the costs disappeared.

“I don’t stress about electricity bills any more. It’s just about checking the bill to see how much credit I’m getting,” he says.

“My bills were about $1200 when we just had solar but now I have about $800 credit so I’m saving $2000 a year.”

Their 10 kilowatt-hour battery should pay for itself within five years and keep Mr Reza’s Sydney house off grid for many sunny days beyond.

But four million Australian households with rooftop solar could make a battery pay for itself faster if an election pledge to discount their price succeeds.

Installing batteries in Australian homes could also reduce pressure on the national electricity grid, energy experts say, and ultimately cut bills and revive solar feed-in tariffs for the entire market.

Still, federal Labor’s $2.3 billion battery pledge will not suit every household and could deliver challenges in some states even as it speeds up Australia’s renewable energy transition.

Announced last week, the Cheaper Home Batteries Program would subsidise residential batteries up to 30 per cent, cutting about $4000 from a typical purchase.

Upfront battery price the biggest hurdle

Government modelling indicates the technology could save households with solar panels about $1100 a year.

The up-front price of those batteries remains the biggest hurdle to their adoption, SunWiz managing director Warwick Johnston says, even as households set records for generating solar power.

“We’ve got four million installations of rooftop solar now and something below 10 per cent having a battery,” he says.

“When you look at a solar power system costing less than $10,000 and then adding a battery for another $10,000, the solar does a lot of the heavy lifting economically so the battery seems quite expensive.”

Low and no-interest loans for batteries offered in Victoria, Tasmania, the ACT and Western Australia do make a “modest impact” on installations, he says, but a direct subsidy would have a bigger effect.

It could also revive solar feed-in tariffs which have fallen significantly and, in some states, represent fractions of a cent per kilowatt-hour.

“To continue harnessing Australia’s most abundant resource, the sun, we do need to be able to utilise it more when we’re consuming it and do that with batteries,” Mr Johnston told AAP.

“That will enable plenty more solar to be rolled out.”

Batteries could lower power prices for all homes

Adding batteries to Australia’s energy network could also lower power prices for all homes attached to the grid, says Jay Gordon from the Institute for Energy Economics and Financial Analysis.

Rooftop solar contributes 12 per cent of grid energy, according to OpenElectricity, and creates a daytime power glut.

Adding batteries to the mix could not only reduce oversupply but demand during night-time peaks, cutting the need for more infrastructure.

“If you had five to 10 per cent of households in a typical neighbourhood take up batteries, you would start to see a meaningful reduction in that evening peak,” the energy finance analyst says.

“That could translate into less need to build out electricity networks and less gas generation being called on, which will flow through to lower retail bills.”

Without subsidies change will be slower

Households with average solar systems around 5kWh could financially benefit from a battery, Mr Gordon says, but new-builds with nine to 10kWh systems could use the technology to “effectively go off grid for many days of the year”.

The change could happen without subsidies but more slowly.

“If you didn’t have subsidies, in maybe five years the economics would become compelling and households would take it up,” he says.

“What this does is takes us forward to where we might otherwise be in a few years.”

Residential battery prices are yet to fall like industrial ones, Climate Energy Finance director Tim Buckley says, but they are becoming more reliable and long-lasting, making them better value.

“Now it’s a 15-year warranty minimum, no longer a 10-year warranty … and if you get some economies of scale, it’ll drop to a six or a five-year payback and then, Bob’s your uncle, it’ll get mass uptake,” he says.

“I think batteries will be very big here.”

With a 30 per cent subsidy available, Mr Buckley says, Australian households could install batteries at the rate of 300,000 to 400,000 a year.

A ‘quirk’ in Labor’s scheme

Some states may see a quicker take-up, however, due to “a quirk” in Labor’s scheme.

Households will be able to combine the federal subsidy with incentives in their state, meaning 20,000 Western Australian residents could simultaneously claim a battery rebate of up to $7500, and NSW households could apply for one up to $2400.

Other households could also miss opportunities under Labor’s scheme, Mr Gordon says, such as apartment residents and renters without access to rooftop solar who could use cheap daytime energy rates to fill batteries.

The Greens launched a $10 billion rooftop solar policy for renters on Wednesday, with leader Adam Bandt saying it could work in conjunction with Labor’s battery subsidies.

The coalition has focused on domestic gas and nuclear energy instead but Mr Buckley says there have been rumours about support for household batteries.

“It would be great if it was a multi-party policy,” he says.

“Batteries are going to be the biggest disruption to the global energy market in 2025.”