Solar Batteries: Everything You Need To Know Before Buying

Last Updated: 4th Dec 2023 By Finn Peacock, Chartered Electrical Engineer, Fact Checked By Ronald Brakels

This no-nonsense guide will walk you through solar battery costs and payback in Australia so you can decide whether a battery is worth it for you. Then, I’ll show you how to pick the right home battery and get it installed by a reputable sparky—ensuring you make a savvy investment rather than a costly mistake.

Solar Batteries Compared

Here’s a table of all the home batteries I know of on the Australian market. As you can see, there’s a lot of choice. Scroll left to right to see them all, then scroll past the table to learn more…

See the glossary for an explanation of each row on the table.

Which brands are best? My personal favourite batteries are the Tesla Powerwall, BYD & Sungrow batteries. Other brands I can recommend are on this chart.

1. Solar Battery Prices
2. Battery Savings & Payback
3. Are Solar Batteries Worth it?
4. Battery Rebates
5. Blackout Protection With Batteries
6. Why Your Battery Will Be Lithium-ion
7. What Will They Look Like On Your Home?
8. Australian Battery Standards
9. Virtual Power Plants Explained
10. Does It Matter Where I Live?
11. Watch A Professional Battery Install

Solar Battery Prices

A decent-sized solar battery starts at about $10,000 before installation. The table above shows the hardware retail price¹ for most home batteries in Australia as of November 2023.

The price tag hinges on two key elements:

• Energy storage capacity, measured in kilowatt-hours (kWh)—more energy storage, higher cost. I don’t recommend buying a battery smaller than 10 kWh.
• The brand reputation—because not all batteries are created equal.

On top of the hardware cost, the batteries must be installed professionally. DIY electrical work is not allowed in Australia.

What Does A Battery Cost To Install?

A simple installation can add $1,500 to a quote. A complicated battery installation (longer cable run, bollards for a garage, fireproof backing, etc.) can be $3,000 or more.

Cost Of An Installed Solar Battery (October 2023):

(For more detail, check out my comprehensive guide to Australian solar battery prices.)

With a solar battery setting you back at least $10,000 installed, the next question is— how quickly will those dollars return to your pocket?

Solar Battery Savings And Payback Periods

Battery payback can vary from ‘no-brainer’ to ‘not bloody worth it’ depending on factors including:

• your solar array size,
• your electricity usage,
• your electricity tariff,
• what battery you buy and how it’s installed.

Be wary of aggressive sales tactics. Always do your research before making a decision. Don’t buy from door-knockers or unsolicited mailings.

For those keen to get the specifics, my solar and battery calculator is your go-to. It’ll give you estimated savings and battery payback periods based on your location, electricity rates, energy usage, and solar array size. But if you’d rather skip the number-crunching, I’ll walk you through some ballpark payback figures.

For example, if you have a $15,500 Tesla Powerwall, the savings below are typical².

You can see how payback depends heavily on the type of electricity tariff you have, so it’s worth explaining the two types of tariffs Australians are put on and how they affect battery payback so differently.

Flat rate tariffs & solar batteries

In simple terms, a flat rate tariff means you’re charged the same price for electricity, no matter what time of day it is—usually around $0.35 for each unit of electricity (or kWh).

With a solar battery, you can store solar energy during the day and use it at night. Each unit of stored solar energy you use saves you the cost of buying that unit from the grid. However, keep in mind that using your stored energy means you’re also missing out on the money you’d earn by sending that energy back to the grid—aka. the feed-in tariff.

So, if you pay $0.35 for grid electricity and your FiT is $0.10, you save $0.25 per kWh of battery energy used at night.  Many people – and some dodgy sales folk – forget to subtract the foregone feed-in-tariff when calculating their savings.

Time-of-use-tariffs & solar batteries

Time-of-use (ToU) tariffs have two or more rates, the most expensive being in the late afternoon and evening when electricity can be as high as $0.75 per kWh. Most of your battery savings will come from avoiding this peak pricing.

Some ToU tariffs charge as little as $0.08 for daytime electricity, so you can top up your battery cheaply, even if there is not enough solar power available.

With some ToU tariffs, late-night rates can be around 20 cents cheaper than in the morning.  On these plans, you can top up your battery overnight to ride through the morning peak.

Some compellingly cheap time-of-use tariffs are only available to owners of specific brands. e.g. Energy Locals’ Tesla Energy Plan is for Powerwall owners only, and Arcstream’s tariff requires a Q-Cells battery

Getting Clever: Playing The Wholesale Market

One electricity retailer (Amber) exposes you to wholesale electricity pricing that varies every fifteen minutes. The price can go up to $19 per kWh – which is terrible if you need to use grid electricity – but great for selling back to the grid.

On the flip side, prices can go so low they go negative, which means you get penalised for exporting energy and paid to use energy (a great time to charge a battery). It’s a high-stakes game for serious players only. But if you want to play it, I know people who have made over $2,000 in one year using Amber tariffs.

Now you know how batteries save you money, we can answer the $10,000 question…

Are Solar Batteries Worth It?

On a flat tariff – not so much.

As you can see in the table above – a 12-year payback with a Powerwall on a flat tariff is typical. In my experience, that’s too long for most, although you can improve your payback by getting a rebate, joining a VPP, optimising your tariff or buying a cheaper battery (but don’t go too cheap).

But on a time-of-use tariff, it’s much better.

If you are on a time-of-use tariff and can get a 5-6 year payback, home energy storage starts to look like a good investment – especially if you value any of these bonus reasons for investing in a battery:

• Protection from blackouts
• Being green (by supporting a more renewable grid)
• Revenge (you hate energy companies)
• Love (you love owning the latest tech)

I’ve written a detailed answer to ‘Are Solar Batteries Worth It?‘, which considers where you live, what tariff you are on, and what local VPPs are available to you.

Battery Rebates

Battery rebates make batteries cheaper, improving payback.

Government Battery Rebates? Only in NT

There is no federal battery rebate. The only state/territory rebate is the Northern Territory’s Home and Business Battery Scheme, worth up to $5,000.

Subsidised Battery Loans

• Victoria offers an interest-free battery loan up to $8,800.
• ACT offers an interest-free $15,000.

VPP Rebates

Local government subsidies aren’t the only way to get a cheaper battery. Some virtual power plants give you an upfront discount on a new battery:

The downside is you lose control of your battery, and it is is worked harder – which will likely shorten its lifespan.

Nerd Fact:A Virtual Power Plant (VPP) is a collection of internet-connected residential batteries controlled by an energy company. This army of batteries charge and discharge in unison to support the grid.

Pro-tip: My Virtual Power Plant comparison table details every VPP available in the country.

I’ve been talking a lot about costs and returns, but let’s not lose sight of another massive perk—resilience. In an age of wild weather and unpredictable blackouts, a solar battery can be your home’s safety net, keeping the lights on when the grid throws in the towel.

You’ll be surprised to learn that not all batteries come with backup, and not all backup is equal. Here’s what you need to know if blackout protection is important to you…

Blackout-Proofing Your Home: What To Look For

Most solar batteries available in Australia promise to keep you powered up during a blackout. But not all are created equal. Here are the must-know features that could make or break your blackout resilience:

• Backup Current: Measures how many gadgets and appliances you can keep running simultaneously.
• Surge Current: Check if the battery can handle the initial power spike when you start up an appliance.
• Switchover Time: The momentary blackout you’ll experience when switching from grid to battery—this can range from milliseconds to a few minutes.
• Solar Charging Without the Grid: Some systems cut off your solar charging capabilities when the grid’s down—watch out for this.
• Failsafe Design: If the battery’s inverter goes kaput, will it mess with your regular grid supply?

An experienced installer is your best mate in navigating these intricacies. And remember, if you’re eyeing a budget battery, scrutinising these features is even more crucial.

Pro-tip: Some cheaper battery systems can interrupt the grid power to your essential circuits if the inverter hardware fails. Always install a $100 battery bypass switch to override it and keep the lights on if there’s a problem.

Whole Home Backup

Buying a battery system to back up an entire Australian home costs big dollars. I recommend saving thousands by choosing a handful of essential circuits and backing those up. For example:

• Fridge (no one likes spoiled food)
• Lights (for obvious reasons)
• A few sockets, including one for your internet router (stay connected)
• Small air conditioner (because our summers are no joke)

By zeroing in on these essentials, you’ll get the most bang for your buck and still keep things civilised when the grid goes down.

The Lowdown on Lithium-ion Batteries

Wondering why Lithium-ion is the go-to for solar batteries? Let’s delve into that next.

Almost all grid-connected solar batteries in Australia are lithium-ion because they:

✅ store more energy by weight and volume

✅ are higher power by weight and volume (can charge and discharge faster)

✅ are more efficient – typically only losing 10% of energy when charged and then discharged

✅ are maintenance-free

The biggest disadvantage of Lithium-ion batteries is:

❌ in the unlikely event they catch fire, they burn like hell

Types Of Lithium-ion Solar Battery

Unless you want to go mega niche, you can choose from 3 types of  solar batteries (all sub-types of lithium-ion):

• NMC
• LFP
• LTO

Fun-Fact: The SolarEdge Home Battery uses Lithium-ion NMC cells and has a built-in automatic fire extinguisher.

Insider-tip: The Powerwall 2 is an NMC battery, but Tesla has started shipping the Powerwall 3 in the US. It uses LFP cells, which should make it even safer, albeit with a larger, less sleek form factor. The Powerwall 3 also has an integrated solar inverter – making it a true all-in-one battery system (see below).

What Will A Solar Battery Look Like On Your Home?

Your solar battery’s aesthetics will depend on whether it is:

• an all-in-one system
• a separate battery and inverter
• a Powerwall (which is a mixture of the above)

All-In-One Battery Systems

An all-in-one solar battery system contains almost everything you need in one big box:

• battery
• battery inverter
• solar inverter
• backup switchover

In the marketing materials, you’ll see them with zero wires attached. Reality is not as neat:

Separate Battery & Inverter

A separate battery and battery inverter won’t look as tidy as a well-installed all-in-one, but a good installer can keep everything neat:

Tesla Powerwall 

The Powerwall is almost an all-in-one. The big white Tesla box contains the battery and battery inverter. But it also needs a smaller ‘gateway box’, and your solar panels need a separate solar inverter. A good installer can make it look neat, but not quite as neat as the marketers want you to believe:

Alright, so you’ve got a mental picture of your future solar battery. The next step? Figuring out where this beast can live in your home. Keep in mind, Australia’s got some of the toughest rules globally when it comes to placement.

Navigating Australia’s Strict Battery Standards

Australia has strict standards for how and where batteries are installed – specifically Australian Standard AS5139. You don’t need to understand the electrical details, that’s the sparky’s job – but you do need to know how it affects where you can put it.

For example, places you can’t put a battery include:

• within 600mm of a window
• under the floor of a habitable room
• on a wall shared with a habitable room without a ‘non-combustible’ barrier

And you definitely can’t put one in your dining room, like some battery brochures would have you believe:

Does It Matter Where You Live When Buying A Battery?

Australia’s a big country, and where you live can affect which battery is best for you…

Climate

The closer you live to Melbourne or Hobart, the lower your annual solar production, so you’ll need a larger solar system to reliably charge a battery all year.

At the other extreme, heat is the #1 thing that will shorten your battery’s life. So keep it cool if you live in a particularly sunburnt part of Australia, and check its ambient temperature range in the battery comparison table at the top of this page before buying.

Electricity Tariffs

‘Solar sponge’ electricity plans, which can turbocharge battery payback, and allow you to charge cheaply from the grid on low solar days are only available in WA, SA and QLD.

Rebates/subsidies/VPPs

Certain government battery rebates, interest-free loans, or Virtual Power Plants are area-specific.

Grid Connection Rules Around Battery Inverters

Some local DNSPs (Distributed Network Service Providers), like Essential Energy, still make it hard to add a battery inverter if you already have a solar inverter. A good local installer will be all over these rules.

Watch A Professional Solar Battery Install

A solar battery installation usually takes two people one day. Here’s exactly what’s involved:

Useful Battery Tools

Solar & Battery Calculator

My solar & battery calculator estimates the savings and payback of solar and batteries for your situation. Crucially, it separates out the solar and the battery savings, so you can decide if home energy storage is worth the extra dollars.

Battery Reviews

Read expert solar battery reviews and browse customer reviews for most battery brands sold in Australia.

Hybrid Inverter Comparison Table

Installing a hybrid inverter to control both your solar panels and your solar battery can save you money because you only need one expensive (~$2000) inverter. Here is a table comparing all hybrid inverters we know of available in Australia. If you choose one of these for your solar installation, adding batteries can be cheaper and easier in the future.

Battery 101 Guides

Understanding Batteries 101: This is a more in-depth guide aimed at technical understanding of home batteries, delving into how they work and comparing different technologies like lead-acid and lithium-ion. It also explains the difference between power and energy in the context of batteries and discusses integrating a battery with a solar system using AC or DC coupling.

Buying Batteries 101: If you are serious about buying a solar battery – you should read this guide (or watch the video) so you can go toe to toe with any salesperson and get the right battery system at the right price.

Owning Batteries 101: Once your solar battery is installed, here’s what you need to know for a decade or two of cheap, secure power.

FAQs

What Size Solar Battery Do I Need?

If you are on a single-rate tariff, you want enough capacity to get you from sunset to sunrise. If you are on a Time-Of-Use tariff,  you must get through the evening peak – typically 4 pm – 10 pm. You can usually see your hourly usage through your electricity retailer’s online portal.

Remember that most battery owners keep a 20% ‘reserve margin’ on top of that in case of a blackout. So a 10 kWh battery would have 2 kWh reserved for blackouts and 8 kWh for powering your home.

Some prefer to maximise the financial return from their batteries by not setting a reserve.  There often will be some energy in the battery when a blackout occurs, but this approach involves some finger-crossing.

Smaller batteries cost more per kWh of usable storage.  This means you may be better off getting a larger one despite your low electricity usage.

Should I Go Off-Grid?

If you have access to a grid connection, do not go off-grid. Grid-connected solar and battery systems start at $16,000. Dependable off-grid systems for typical Australian homes start at $60,000 and require regular checks, careful energy management and generator backup.

How Big Is A Solar Battery?

The size of home batteries depends on their energy capacity and their ‘specific energy’, which measures how much capacity they can squeeze into a given volume. If space is an issue, Tesla and Sungrow make space-efficient batteries, whereas the Enphase solution is bloody huge. More details on battery dimensions here.

How Long Do Batteries Last?

A study in the journal Energies says in moderate climates (20-32°C) with daily use, lithium batteries should last 14-16 years. In climates up to 40°C, expect 12-14 years. Warranties range from less than two years (if you read the small print on some cheap batteries) to 15 years for NMC and LFP batteries and 20 years for more expensive LTO chemistry. More details on how long batteries last here.

Those who join the Tesla Energy Plan VPP and stick with it will have their Powerwall 2 warranty extended by 5 years.  This suggests Tesla expects their home batteries to last at least 15 years.

Which Solar Battery Is Best In Australia?

Every year, I survey our network of ~600 installers and ask them. In 2023, Tesla won the best battery, followed by BYD and Sungrow.

Can Solar Batteries Be Recycled?

Yes. Home battery recycling is an emerging industry – because there are not many at the end of their life yet – but the technology exists to recycle over 90% of a home battery. When yours finally dies, contact your installer, or the manufacturer for details.

Can Solar Batteries Catch Fire?

Yes. Although extremely unlikely, I’m not gonna lie. If a lithium-ion solar battery catches fire, it will burn ferociously and can release nasty gases, which may include phosphorus pentafluoride, phosphoryl fluoride and hydrofluoric acid vapours.  

You do not want to breathe these in – so evacuate the area and contact emergency services. Remain upwind and notify those downwind. No one should go near a smoking or burning home battery without full protective equipment, including Self Contained Breathing Apparatus (SCBA).

I’m On A Legacy 40c+ Feed-In Tariff. Should I Get A Battery?

NO! A battery will only lose money if your feed-in tariff exceeds your usage tariff.

Do Insurers Cover Home Batteries?

Yes. They usually go on your home insurance, not your contents insurance, because they are hardwired into your home. Just call your insurers and let them know you’ve added a home battery.

I Have 3-Phase Power. Do I need A 3-Phase Battery?

No. You can happily use a single-phase battery on one phase of a three-phase home, but there are some 3-phase battery details you should know.

Glossary

Battery Comparison Table Rows

Price: Our best retail price estimate includes GST. For the required hardware only.

Battery Type: Either LFP, NMC or LTO. See here for an explanation of the differences.

All-in-one-unit: See here for a pictorial explanation of the difference between an all-in-one, a separate battery and inverter and a Powerwall.

Nominal Storage: How many kWh a battery can store in theory. In practice, most won’t let you use all their energy capacity in order to prolong their lifespan.

Usable Storage Capacity: How many kWh you can store in a battery in practice.

Power (kW): The speed at which a battery can charge and discharge. Check yours doesn’t limit this in backup mode.

Round Trip Efficiency: When you put a kWh in, how much do you get back out? Typically 90%.

Ambient temperature range: What air temperature is the battery rated for? If it gets too cold or too hot, performance can take a hit, or the warranty can be reduced, or both.

Off-grid capable: Does the manufacturer warrant the battery for off-grid?

IP Rating: How well sealed from the elements is the battery? Can it go outside?

Compatible Hybrid Inverters: A hybrid inverter is required for some battery systems – these are compatible ones. A hybrid inverter can also manage your solar panels – potentially saving a couple of thousand bucks.

Warranty: the headline warranty – before caveats. Sometimes this is shortened depending on how hard you work the battery.

Warranty length (1 cycle per day): How long is the warranty if you fully discharge the battery every day? Those on a flat tariff rarely cycle theirs more than once per day.

Warranty length (1.5 cycles per day): If you fully discharge the battery  1.5 times every day, How long is the warranty? This is typical for time-of-use tariffs where you charge during the day to get through the evening peak, and then again at night to get through the morning peak.

Cost Per Warranted kWh: 1 Cycle Per Day: If the cycled once per day, this is how much each warranted kilowatt-hour of stored electricity will cost. It exposes good and bad warranties.

Modern Slavery/Forced Labour:  Does the manufacturer have policies addressing modern slavery/forced labour risks.

Home Battery Quotes

If you’re ready to buy a solar battery, I can help you get quotes for quality home energy storage systems from pre-vetted installers quickly and easily: