Lithium-Ion Batteries Guide
Last Updated: 23rd Feb 2026
Lithium-ion (or Li-ion) batteries are a type of battery you get in your iPhone and laptop. They are also the type inside every mainstream home battery system in Australia.
These home batteries used to contain hundreds, or even thousands, of battery cells wired together. But these days it’s becoming common for batteries to have a small number of large battery cells that store nearly 1 kilowatt-hour (kWh) each. This may increase to 2 kWh before long. Regardless of how many cells there are, they’re all contained in a sturdy, protective, metal case. This then goes inside another metal case that’s either a cabinet or a stackable battery module.
The reason lithium-ion batteries have conquered the market is that they can be discharged deeper than old style lead-acid batteries, and have far longer effective lifetimes. Most are warranted for 10 years or around 3,000 or more full cycles. With typical use, most warranties will last the full 10 years and they can potentially operate much longer. I expect the typical well made home battery installed today, will still be operating in 15 year’s time.
The cost of producong lithium battery cells has fallen dramatically and the cost of home batteries are likely to fall for years to come. While lithium will probably remain king, more advanced types of lithium batteries are likely to become available. It’s also possible that sodium batteries will become available. These operate similar to lithium ones, but may have a cost advantage.
Distinguishing between different types of lithium-ion batteries
These days, almost every home battery uses the same type of battery chemistry – lithium iron. Also called lithium iron phosphate or lithium ferrophosphate, with the last one typically shortened LFP.
Two reasons its almost exclusively used are that it’s potentially very long lasting and has some safety advantages. But the main reason is that it’s the cheapest type of lithium battery.
Most new EVs have lithium iron batteries, but many longer range ones use NMC (Nickle Manganese Cobalt) batteries, because they can store more energy per kg. Some older batteries, such as the Tesla Powerwall 2, also used this battery chemistry.
How much will a lithium-ion + solar panel setup cost?
This all depends on the brand and size of the battery you choose to go with. Some battery manufacturers have been around longer and have better reputations than others, while battery size affects how much federal battery rebate you can receive. If you’re only considering getting a battery now, then one with around 14 kWh of storage capacity will maximise the amount of rebate you receive per kWh. It’s also a reasonable size for most households.
The installed cost of a good quality 14 kWh battery could be from around $9,000 to $15,000 or more, with the exact amount depending on the battery brand and how difficult the installation is.
A commonly installed solar system size is 6.6 kilowatts (kW). This can suit a household average to low electricity consumption and currently costs an average of around $6,500 for one installed by a professional who does high quality work. However, I generally recommend getting a larger solar system, especially if you’re planning to get a battery or an EV. A 10 kW solar system currently costs around $10,500.
This makes it seem like you’d need around $15,000 to $21,000 or more for an installed 6.6 kW solar system and a battery of around 14 kWh. But if you have both put in at the same time, you can get a better deal. This is because the installer may only have to come out once to do both jobs, and most batteries can share their inverter with solar panels, which saves on hardware costs. So getting both done may only cost $13,000 to $19,000.
You may see deals offering solar and batteries for less, but in these cases it’s very important to do your research and look into both the battery and the installer to make sure you’ll get a reliable battery and you can trust the installer to provide good after sales service if something goes wrong. A property can only receive the federal battery subsidy once, so you want to make sure it goes towards a good battery.
Even with the federal rebate, the cost of a reliable battery system comes to a considerable amount, and this can give pause even to those keen to have battery storage. But be sure to consider all the benefits of batteries, including backup during blackouts (with the right setup) and hedging against energy price increases and tariff changes when making a decision.