Fact Checking An SA Government Press Release Spruiking Their Battery Subsidy

SA home battery scheme

Last Sunday the South Australian State Government issued a press release spruiking its Home Battery Scheme.

It is clearly aimed at getting more South Australians to fork over thousands of dollars for a home battery, no doubt triggered by the fact that – at the current run rate – it will take 15 years for them to flog all 40,000 subsidies, despite throwing about $100,000 per month at advertising the Home Battery Scheme.

This will be a very simple blog post. I will simply rate each paragraph of the press release on my humble opinion of its truthfulness.


 

Let’s start with the title:

Zero bills with zero emissions

False:  At the moment, adding a home battery does not decrease your home’s carbon footprint. It increases it. Peer reviewed academics agree. Here’s why.


 

Next we have the date:

24.03.2019

True: I can confirm that last Sunday was indeed the 24th of March 2019


 

What about the name of the person issuing it?

Dan van Holst Pellekaan MP

True: I can confirm this our Energy Minister’s name. Although I prefer to call him ‘Dan van the battery salesman’. It has a nice ring to it.


 

The subheading?

Lower Costs

Misleading: Even with the hefty subsidy, at current tariffs, you need to make incredibly optimistic assumptions to save money with a subsidised battery. Further, the early participants in this scheme would have bought the most expensive batteries such as a Sonnen, as they had an exclusivity period. It is not possible to save money with a Sonnen in South Australia because they are so expensive. Even with the subsidy.


 

South Australian households that moved early to access the Marshall Liberal Government’s subsidies of up to $6000 for home batteries are now seeing the benefits, with some household electricity bills dropping to zero.

Misleading: It is easy for many people to get a zero or negative bill with solar power alone.


 

“The Marshall Liberal Government’s Home Battery Scheme (HBS) means participating households’ can slash their electricity bills while helping to deliver cheaper electricity for all South Australians and generating valuable local jobs,” said Minister for Energy and Mining Dan van Holst Pellekaan.

Misleading: As this graph shows for a typical solar and battery system – it is the solar aspect that is slashing the bills. The batteries are making a very modest incremental reduction

chart of battery savings

Grey bar is bill with no solar or batteries. Yellow bar is bill with solar power. Blue is bill with solar and batteries. See where most of the savings really are? (Chart from SolarPlus design software)


 

“This is great news for households that have already successfully applied for the subsidy of up to $6000 and a powerful incentive for those considering installing the new technology.”

Misleading: Households will get a 2-4 year return with solar power only, compared to a 15-30 year return on batteries. A 15-30 year return is not a powerful incentive.


 

The Harris family of Marino Rocks is just one the almost 1300 households that have signed up for a subsidy for a battery under the Marshall Government’s HBS.

Misleading: Locking in the home battery subsidy comes with no obligation to buy. At least one retailer was telling its sales staff to lock in the subsidy and worry about selling the battery later. Many people will secure the subsidy and then never use it. Current conversion rate from subsidy ‘lock-in’ to making the sale appears to be about 30% based on the government’s own numbers.


 

Despite a scorching summer and the additional demands that places on household electricity consumption the Harris family are a net contributor to the grid since the installation of their State Government subsidised home battery.

Misleading:  When you add a battery to a solar power system, although you reduce your grid imports substantially, you reduce your exports even more – due to the losses in the battery charge/discharge cycle (AKA round trip efficiency). Batteries actually reduce your ‘net contributions’ to the grid. That’s one of the reasons they are an environmental negative right now.


 

‘We are producing significant power at this season of the year – more than we need – so that we are self-supporting,’ said Dr Ross Harris.

‘It’s great – excellent.’

Misleading: You are only fully self supporting if you are disconnected from the grid. To do this you would typically need a system that cost at least 3x the price of a grid connected system with batteries.


 

The fact the State Government has invested $100 million in the HBS was important in convincing the Harris family to install a home battery.

‘We looked at this because the State Government made a major investment in it. That was pretty impressive. It meant that a group of people who know more than we do about this have examined the technology and decided it’s a goer.’

False: The group of people that decided the subsidy was a ‘goer’ were politicians who understand good politics and appear to know rock-all about batteries. I don’t know of any scientists, sparkies or engineers that had a say in this pre-election cash splash.


 

“One in three South Australian homes have solar panels and the addition of a home battery will allow householders to store the electricity they generate during the day and use it when they get home in the late afternoon,” said Minister van Holst Pellekaan.

True: That is how a home battery works.


 

“Harnessing the energy that is generated by solar panels during the day and using it when demand peaks in the late afternoon is good for the individual householder’s electricity bills, good for their neighbour’s electricity bills and good for the environment.

False: If you include the cost of the battery – it is almost certainly bad for the household’s budget. And as already explained, adding a solar battery to your home is currently an environmental negative. I wish it wasn’t, but physics is physics.


 

“More and more people are realising that the Marshall Government’s Home Battery Scheme is a great way to cut their electricity bills.”

False: Buying a battery is one of the most expensive ways there is to reduce your electricity bills. For example, I own a Tesla Powerwall 2. With the subsidy this battery will cost you $11,000 today. My battery saves me about a dollar a day.  That’s a 30 year payback1.


 

In Summary

If you want to buy a solar battery because you want to support the home battery industry, you want backup, you love the technology, or you want the lowest bills possible at any cost – then go for it. The SA government is providing a generous subsidy – up to $6,000, so it is a good deal for battery fans.

But it is misleading for the South Australian government to convince people into thinking their scheme will definitely save them money. Most people are likely to lose money overall – especially if they buy one of the more expensive batteries.

Unfortunately our politics have sunk so low nobody seems to bat an eyelid at a press release that only contains 3 out of 13 statements that are 100% true and not misleading. And two of those were the date and the minister’s name.

Footnotes

  1. Although I only paid $3,800 under AGL’s smart VPP scheme – which was open to anybody in SA
About Finn Peacock

I'm a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last "real job" was working for the CSIRO in their renewable energy division.

Comments

  1. You Finn, like myself, got a Tesla battery under the AGL VPP. ( first time I have read this of you )
    My question.
    Why have you not written any articles about the program? > or please point me to them

  2. Reg Watson says

    You need to approach the media and get yourself on the 7.30 Report if this is deliberately misleading the public. This info should be shared to Mr and Mrs Average as most of us on here are already aware that batteries don’t make economic but only feel-good sense.

  3. I have looked into batteries and it is just not worth it. Instead of this I have opted to install a second lot of 5kw inverter and panels and with the new AGL 20c feed in Tarif I can export at 20c and buy back at 29c so this is much more cost effective.
    Currently I am paying 6c per kw hour on average for electricity with the solar feed in. After I add the next 5kw I should have no bills and it should pay for the connection fee and my gas supply.

  4. Ian Thompson says

    Hi Finn

    I do recall the early days of Rooftop PV – when installations were so very much more expensive. Early adopters would brag that they “pay zero power bills”, even though they were really well out of pocket (from the Capital cost). Yes, the industry is rife with misleading information, myths, lack of understanding, etc.
    Then came the Rebate scheme – which allowed adopters to reap the benefit of having other taxpayers help to pay their system off – thereby making the systems more cost-effective (to them) – especially with the then very generous FiTs on offer.
    The purpose was obviously to ramp up the sales of PV, thereby lowering prices due to the economies of scale (e.g. more research, better amortisation of production equipment, lower net transport costs, etc.).
    This strategy appears to have worked for Rooftop PV – so why not also for batteries? Early adopters will help get the volumes up, which can only help reduce the cost of batteries for the rest of us. Maybe in addition to the subsidy, battery adopters should also be provided with an increase in FiT.
    It would be interesting, however, what would happen if the Government dropped the rebate scheme altogether right now. In other words, have we yet reached “critical mass” sufficient to keep expansion going, or would this action result be a very significant drop in solar sales?

    • “Maybe in addition to the subsidy, battery adopters should also be provided with an increase in FiT.”

      Completely agree.

      Until such time as governments a.) pay a decent Fit; and/or b.) provide FiT incentives for battery systems; we won’t bother with batteries.

      Won’t happen in WA, where our current government has never been able to accept that this (admittedly one of the very few) LNP initiatives beneficial to West Aussies really has made a major difference.

      Interesting to note that a few of the rising EV companies have designed in-car systems to power our homes when we’re not actually driving the car… .

    • Ian says: “Maybe in addition to the subsidy, battery adopters should also be provided with an increase in FiT.”

      We completely agree.

      Until such time as governments a.) pay a decent Fit; and/or b.) provide FiT incentives for battery systems; we won’t bother with batteries.

      Won’t happen in WA, where our current 7c government has never been able to accept that this (admittedly one of the very few) LNP initiative was beneficial to West Aussies and really made a major difference. While state Labor views subsidies as ‘middle-class welfare’, a good case exists for hung parliaments, which now persist right across Europe.

      Interesting to note that a few of the rising EV companies have designed in-car systems to power our homes when we’re not actually driving the car… .

    • Two differences between PV and Batteries:

      Firstly PV systems should last at least 25 years (and are warranted for that). So you have to pay a hell of a lot for PV for it to never pay for itself.

      Secondly PV reduces emissions.

      It is fine to subsidise batteries with the intention of developing a home battery industry. Just don’t mislead the public on the economics. It is not OK to lie.

  5. Finn & Company. You know you’re doing it right when people shit all over you.
    You are being read,and listened to [otherwise nobody would comment] and you have “hit a nerve” as they say..
    IMHO there is a vast difference between ” a difference of opinion “and criticism .
    Many people turn things into a personal attack,rather than a debate on the facts presented. My parents were teachers. My mom , English. She drilled into me this.” If you present something as a fact always have a source to prove your statement.” Solar Quotes has; as long as I can remembered ALWAYS provided proper footnotes. It is comforting to know that in today’s “instant gratification society” somebody actually knows how to put a” proper together”. I did not appreciate what you were doing when I was a teenager.
    Mom, Thank you. RIP.

  6. What else can we expect from the Liberal spin doctors? They are full of BS because they are Liberals. I feel sorry for all the folk out there that fall for their relentless spin and BS. Federal and State Liberal are the same, just full of spin and BS.

  7. If you look at the T&C’s of the AGL VPP offer, the payback is even more unknown as they get to use some of the energy in your battery, that you charged with your solar panels for their own financial gain!

    Stay away from AGL

    • Frank.
      In the almost 2 years I have been in the AGL VPP they have drawn under 10 kWh , that’s under $4 , does that help with your maths?

  8. The article is assuming an ‘infinite’ market ie all the solar that can be generated can be used on the network and as such its true that the more solar, the more ‘dispatchable’ power gets reduced. Therefore any losses incurred in battery charging and discharging are an environmental negative.

    But increasingly (and SA is the forerunner here) there is going to be so much PV that constraints are going to have to be applied at the local network and transmission level or voltage, frequency and security will be in trouble.

    In a ‘constrained’ world batteries would be an environmental bonus because you can use the glut of unwanted pv energy in the middle of the day to charge the batteries for use in the evening peak. When you discharge in the peak you are hopefully displacing the dirtier peaking plant that would otherwise come in.

    • Yes this is one area where batteries can be of huge benefit to both the grid and even future microgrid tech. As well as acting as a secondary peaker plant if they are all part of a VPP which I believe was part of the scheme.

      One of the emerging issues with solar is too much power during the day and no power at night when needed and batteries can actually help alleviate this. It’s too simplistic to say that home storage batteries have a negative emissions impact without factoring in things like peaking, grid stabilisation, reduced peak demand and other factors. However, currently the manufacturing process is not particularly ethical or environmentally friendly – and all these factors negatively impact the equation as well.

      Are they good economically for the consumer? Nope. Because as with all Govt. subsidy and rebate schemes the minute you introduce them, manufacturers jack up their prices to take probably 50% in additional profits. How much money you “save” with a battery is a case by case basis. Finn only saves about a $1 a day but then he only paid $3,800 for his PW2 meaning it will pay for itself in 10 years or so. (I’m ignoring opportunity cost – lets be generous and say 12 years)

      So that’s pretty much the price batteries have to come down to make sense within the warranty period for the average consumer.

      From the govt’s point of view if they can get the taxpayer to pay for another big battery (in the form of a VPP) for significantly less than the cost of Hornsdale then it’s a win.

      • Actually I’ve just read the Nature peer reviewed study where they basically say that even taking things like peaking etc into account batteries are actually worse on the emissions front. This is based on 99 Texas families – the grid in Texas is 30% renewables or nuclear so of course replacing solar feed in with grid power is actually better than it would be in Australia. It was a very comprehensive study with valid assumptions.

        One thing I couldn’t pick up in the article – they took into account inefficiencies in the AC to AC round trip of the batteries, but nowhere could I see the inefficiencies when feeding power back into the grid. I have to assume there are some losses at transformers etc.

        Bottom line – unless home battery storage grows significantly actually replacing coal fired generation altogether then it’s unlikely to be emissions friendly.

    • Erik Christiansen says

      Yes, Mick and Mondo, you’ve hit on the head the weakness in Finn’s one-eyed aversion to batteries. OK, while there are enough aircons to suck up ever increasing supply of PV and wind power, that’s optimal for emissions.
      BUT time-shifted renewable energy also displaces fossil emissions, and Australia is gearing up to spend billions of dollars to do that with less cycle efficiency than the best batteries. Pumped hydro: Snowy 2.0 and the cable duplication to Tasmania for pumping their hydro gives 80% energy recovery at best. CST’s molten salt storage isn’t any better, I think. Danish media were talking last week about going large-scale from a pilot hot rock energy store: crushed rock at 600 deg. C, giving 60% electricity recovery, 20% heat for piping around town, and 20% losses.

      Any time-shifted renewable energy which displaces fossil CO2 emissions can save millions of dollars in the immediate future, not just storm damage, but by delaying the need to move cities to higher ground. Just this week Aussie researchers found massive subglacial melt lakes under the Totten glacier. The delusion that seas will only rise by 1m in the next 80 years will not hold. Get ready for 2m, worsening of the current record drought here, and localised flooding.

      Yes, Snowy 2.0 needs to be started now in order to be even half ready when needed for the 40% renewable network generating capacity level, but battery technology also needs to be built by the investment of early adopters, or it won’t be ready when needed by the masses. The current government subsidy to the battery industry is at least not as destructive to society as the coal subsidies.

      Individual household short term economics are irrelevant when the long term cost of half measures is unsustainable. It’s cheaper to not brush your teeth, and just let them rot. Good for your kids?

      • Oh come on! Finn’s observations are pretty spot on IMO. Who are you working for?

      • I have no aversion to batteries. I own a Tesla PW2. I have an aversion to misleading consumers. Many consumers are choosing to buy batteries for many of the reasons you cite. I applaud them. Unfortunately in this job I also see the pensioners who are buying batteries in a desperate hope of saving money, aided and abetted by people exaggerating their payback. That is not on.

  9. Bob Johnson says

    I thought this was a good article Finn. Can you get the media to publish this and also include the other environmental downside of batteies ie manufacture and recycling (or lack of)?

  10. Wow!, it seems like reporting the TRUTH about batteries upsets some people. One has to wonder who they they are working for?

  11. Reg Watson says

    Surely the South Australian Opposition would be interested in facts like these ? If really worried about us pensioners you need to do more than whinge about it in a blog. Get on the front foot lad !

  12. why would I bother with any solar panels when i have a battery?

    I just charge them when the tariff is cheap and use the power when the greedy power companies apply the peak tarrif.

    I never buy peak power again.

    It has cut my power bill by 60% in tasmania.

    And…i dont have a single overpriced,over regulated solar panel any where.

    the payback is pretty quick…

    • Did you factor in the conversion losses and the fact that you could have invested money you spent on batteries to offset your power bills.

  13. I’m an independent old bastard who disagrees with the idea of subsidies that are paid for by other taxpayers who for whatever reason cannot or don’t want panels etc. Our house is 3/4 off grid ( separate circuits) with agm batteries. Because of our age, our batteries and panels will outlast us.During blackouts, which we get here being out of town we still have water (on tanks and pump). During our last major blackout ( 5 days due to H/V line damage) we were able to help neighbours store their food till they got generators. Our power bill is little more than the feed in tariff which we keep for off peak hot water ($45 per 1/4) . If we go on holidays we revert to grid for fridge, freezer and water. Previous agm’s lasted 12 yrs and gedually died, not likke lithiums, here today, gone tomorrow. So far a pleasant and rewarding experience.

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