Last Updated: 6th Jun 2025 By Finn Peacock, Chartered Electrical Engineer, Fact Checked By Ronald Brakels
Are Solar Batteries Worth It?
Summary: The federal battery rebate starts on July 1, 2025. It can be combined with the WA rebate and we expect it can be combined with NSW’s battery rebate — but this is not yet confirmed. The federal battery rebate alone will allow batteries to pay for themselves for homes with solar and typical overnight electricity consumption in NSW, QLD, SA, and WA. Households with above-average electricity consumption may also see a financial return in ACT and VIC. In TAS you’re unlikely to see a financial return, but if you value backup power or their environmental benefit, you may consider batteries worthwhile, no matter where you are.
Before the federal battery rebate, getting a home battery to pay for itself generally depended on the right location and above-average electricity consumption. But now the majority of Australian households with decent-sized solar systems can come out financially ahead by installing a battery.
But there are still places where it’s hard to make batteries pay. Below, I’ll give estimates for savings and simple payback periods for every state and territory to show where batteries are likely make money. The estimates are for capital cities, but you can expect similar annual savings for the entire state or territory. However, if you live beyond the black stump, you’ll likely have to pay more for a battery, which will increase the payback time.
Pro-Tip: This page is all about the financial returns of solar batteries. But batteries have more value than just low electricity bills. They provide blackout protection, help integrate more renewables into the grid and provide insurance against changing electricity tariffs.
Federal Battery Rebate — Savings & Simple Payback
The table below gives the estimated annual savings from a 10 kilowatt-hour (kWh) battery in every capital, based on an overnight electricity consumption of 7kWh. Roughly 60% of Australian households use at least this much between sunset and sunrise. The homes are assumed to have reasonably large solar systems of over 7 kilowatts (kW).
Simple payback periods are also given. This is how long it takes for electricity bill savings/credits to equal the installed battery cost. Only the national battery rebate is used, without the WA or NSW rebates added in. It’s assumed the battery installation is straightforward, with a total cost of $8,500 after the federal rebate is applied.
| Annual Savings and Simple Payback Periods for 10kWh Battery Using Only Federal Battery Rebate & $8,500 Installed Cost | ||
|---|---|---|
| Capitals | Annual Savings | Simple Payback Period |
| Adelaide | $1,350 | 6.3 years |
| Brisbane | $1,100 | 7.7 years |
| Canberra | $700 | 12.1 years |
| Darwin | $620 | 13.7 years |
| Hobart | $410 | 20.7 years |
| Melbourne | $610 | 13.9 years |
| Perth | $1,120 | 7.6 years |
| Sydney | $1,030 | 8.3 years |
Adelaide’s simple payback period is the shortest due to high electricity prices, while Hobart’s is by far the longest, thanks to relatively cheap electricity and high solar feed-in tariffs.
Decent batteries have a warranty of 10 years or close to it in practice. If the warranty is close to 10 years and a battery has a simple payback period of 8.3 years or less, then even after accounting for the cost of capital, you can be confident of coming out ahead while the battery is still under warranty.
While it’s reasonable to expect a battery to last for years past the end of its warranty, there is – quite literally – no guarantee that it will.
States where solar homes have simple payback periods of under 8.3 years or less with typical overnight electricity consumption are NSW, QLD, SA, and WA.
But the federal battery rebate isn’t the only way to improve return. State based rebates can also help, as can joining a Virtual Power Plant (VPP) also helps.
State & Territory Rebates
State and territory battery rebates are available in NSW and WA. The WA rebate can be combined with the federal rebate, and we expect it will be possible to do the same with the NSW rebate, but we’re waiting on written confirmation. The table below shows the installed price of an $8,500 battery after these rebates are applied and the simple payback periods. The annual savings remain the same, but are also included:
| Installed Cost, Annual Savings, & Simple Payback Period for $8,500 10kWh Battery After State/Territory Rebate | |||
|---|---|---|---|
| Capital | Installed Cost | Annual Savings | Simple Payback Period |
| Perth | $7,200 | $1,120 | 6.4 years |
| Sydney | $7,065 | $1,030 | 6.9 years |
Perth is in the Synergy area where a 10kWh battery will receive the maximum WA rebate of $1,300. This will reduce the simple payback period by over a year and make batteries an excellent financial investment. In the regional Horizon Power area, the rebate is higher with a maximum of $3,800 for a battery that’s 10kWh or larger. This extra amount should more than offset the additional cost of installing a battery in a remote area.
The NSW battery rebate is based on the value of Peak Reduction Certificates (PRC), which can vary. I’ve assumed they’ll lower the battery price by $1.80 each, but the actual amount could be higher or lower. But even without the NSW rebate, a battery is likely to make money provided it receives the federal rebate.
VPP Savings
Another way to improve a battery’s financial return is to join a VPP. These provide payments and potentially other benefits in return for using your battery to support the grid when required. VPP payments vary from okay to miserable, so it’s important to be careful when selecting one. In NSW there’s a payment available for joining a VPP and a second payment after 3 years.
The table below shows the annual savings and simple payback periods with the federal battery rebate, the state rebate in NSW and WA, and a VPP that provides $150 in net benefits per year. For NSW, the first payments for joining a VPP is included and assumed to be $217. While there are no VPPs currently available in the NT, this could change in the future, so Darwin is included.
| Annual Savings and Simple Payback Times for 10kWh Battery With Rebates and VPP Membership | ||
|---|---|---|
| Capital | Annual Savings | Simple Payback Period |
| Adelaide | $1,500 | 5.7 years |
| Brisbane | $1,250 | 6.8 years |
| Canberra | $850 | 10 years |
| Darwin | $770 | 11 years |
| Hobart | $560 | 15.2 years |
| Melbourne | $760 | 11.2 years |
| Perth | $1,270 | 5.7 years |
| Sydney | $1,180 | 5.8 years |
Pro-Tip: Compare Australian VPPs with my VPP Comparison Table
Electricity Price Increases
The higher electricity prices rise, the better the return from batteries and the shorter their payback period. The estimates on this page were made using what electricity prices are expected to be from when the federal battery rebate begins on July 1, 2025. If electricity prices fall in the future, it will lower returns and increase payback times.
Lower solar feed-in tariffs also improve battery returns. While they can rise and fall, their general trend has been downwards.
Batteries Require Time-of-Use Tariffs
For an effective battery return, you will need a time-of-use (ToU) tariff. These have peak periods with high prices in the late afternoon and evening that a battery can let you avoid. If grid electricity is required, it can be drawn during cheaper periods.
The NT is the exception. Their ToU charges more during the day and less in the evening, so whether or not it will reduce your electricity bill comes down to household’s electricity consumption patterns.
Pro-Tip: You can check out different tariffs with our Retailer Comparison Tool.
Larger Solar Systems = Better Battery Payback
Larger solar systems help batteries provide better returns. The larger your solar system, the more likely your battery will be fully charged towards the end of the day, even in winter and periods of bad weather.
The estimates on this page are based on homes with large solar systems of over 7 kW. This doesn’t mean batteries can’t pay for themselves with smaller solar systems, but their return will be reduced, with longer payback periods. This can be partially offset by using an electricity plan that lets you charge your battery at a very low off-peak rate. Some electricity plans even offer periods of free electricity in the middle of the day. While these sound excellent for battery households, it’s still important to carefully check you will come out ahead by using them. They can be useful for households with limited roofspace that can’t install much solar — or households without a roof that want the benefits of a battery.
Battery Reserve
Most batteries – but not all – can provide backup power. Usually, they can have a reserve set so there’ll always be some battery energy available if there’s a blackout.
The lower this reserve is, the better the potential payback will be because more stored energy will be available to lower your electricity bills. The savings and payback estimates on this page assume zero reserve. While the odds are there will be some energy in the battery when a blackout occurs, without a reserve you will run the risk of there being nothing.
If you consider having backup power important, I recommend paying extra for a larger battery. Even if you don’t set a reserve, this will increase the chance of it being able to supply energy when you need it most. Larger batteries also help offset the effects of capacity loss.
Battery Capacity Loss
Batteries lose capacity over time and with use. Warranties typically allow them to lose up to 30% of their original capacity, while some allow a 40% or greater loss. While most batteries shouldn’t lose as much as their warranty allows, you should be prepared for the typical battery to lose around 2 percentage points or more per year.
The savings and payback estimates on this page allow for a modest amount of capacity loss, but this amount is likely to be exceeded after 10 years. Beyond this point, the savings and payback time estimates may be modestly worse than what’s given.
Capital Costs
The cost of capital increases the time batteries need to pay for themselves, and this isn’t captured by the simple payback period. Capital costs can vary from person to person, but because most people considering buying a battery also have a home loan, it’s reasonable to use the typical home loan interest rate.
For a simple estimate of how much extra time is required to cover capital costs before a battery starts making you money, add the following extra amount of time based on its simple payback period:
| Additional Payback Time Due to Capital Cost | |
|---|---|
| Simple Payback Period | Extra Time for Capital Cost |
| 6 years | +0.5 years |
| 7 years | +1 year |
| 8 years | +1.5 years |
| 9 years | +1.8 years |
| 10 years | +2 years |
| 11 years | +3 years |
So if you buy a battery with an 8 year simple payback period, it will take around 9.5 years before you’ll be better of than if you’d put your money towards your home loan. With some batteries, the warranty will have ended by this point. This is why I suggest getting a battery with a simple payback period of under 8 years if you’re determined to make money from it.
If your personal cost of capital is higher than the home loan rate it will increase the extra time required to pay for itself.
Above Average Electricity Consumption
If a home has above average overnight electricity consumption it signifcantly improves savings and payback periods. Here are estimates for a homes that use an average of 10.5kWh overnight with a 10kWh battery. Around 22% of homes consume this much or more. It’s assumed that state and territory rebates are used where available.
| Annual Savings, & Simple Payback Periods for 10kWh Battery With Above Average Electricity Consumption | |||
|---|---|---|---|
| Capital | Installed Cost | Annual Savings | Simple Payback Period |
| Adelaide | $8,500 | $1,577 | 5.4 years |
| Brisbane | $8,500 | $1,284 | 6.6 years |
| Canberra | $8,500 | $822 | 10.3 years |
| Darwin | $4,500 | $960 | 4.7 years |
| Hobart | $8,500 | $536 | 15.9 years |
| Melbourne | $8,500 | $653 | 13 years |
| Perth | $3,500 | $1,345 | 2.6 years |
| Sydney | $7,065 | $1,271 | 5.6 years |
Playing The Wholesale Market With Your Battery
One way to get outsized financial returns from your battery is to enrol in an electricity plan that exposes you to the wholesale electricity spot price – a price that can go as low as negative $1 to as high as $15 or more per kWh. Energy retailer Amber Electric offers such a service. The theory is that you can make loads of money if your battery charges when prices are low and discharges when they’re crazy high. Certainly, some people with large solar batteries and flexible loads report making thousands of dollars over 12 months doing this. But be careful, as with most high-reward activities, there is a risk of getting it wrong and getting giant electricity bills (capped at the Default Market Offer) instead. For advanced players only.
Tools for Better Decision Making
Add A Battery Calculator: Quickly see your payback if you add a battery to an existing solar system. Uses your smart meter data to calculate how much spare solar you’ve got for charging and how much energy you use overnight. The result is a no-BS payback figure for your unique situation.
Solar & Battery Calculator: Quickly see estimated savings and payback when you combine a battery with solar power. Crucially, my calculator will split the solar and battery payback so you can decide if a solar battery is worth it.
Energy Tariff Comparison Tool: Your retail tariff affects your battery payback. Quickly see what’s offered in your area, and sort them easily.
VPP Comparison Tool: See what VPPs are available in your area.
Solar Batteries compared: Compare solar batteries available in Australia.
If you’ve decided that solar batteries are worth it for you and are ready to buy, I can help arrange quotes from installers I trust – quickly and easily: