Beware ‘Bargain’ Battery Offers In Your Letterbox

Sometimes I write blog posts that are fact checks. But today’s is more a statement of fact.  And that fact is:

If your electricity consumption is anywhere close to normal, it’s a bad idea to blow your your only chance to use the battery rebate on a tiny 5 kilowatt-hour (kWh) battery, like the one promoted by Solar Battery Group’s letter mailout campaign.

Is A 5kWh Battery Big Enough?

I’m not saying there aren’t people out there who specifically only want a small 5kWh battery.  They do exist, but they’re not normal.

I’m also not saying a normal household would get no benefit from a 5kWh battery.  A puny itty bitty baby battery will provide infinitely more benefit than no battery at all.  But the battery rebate can only be used once per property.  So, unless you’re absolutely sure you only want 5kWh, it’s a dumb idea to get the smallest battery capacity the rebate covers.

There are several good reasons not to get a bantamweight battery:

1. While a tiny battery can save you money, much more can be saved with one properly sized for your electricity consumption.
2. Even when installed so it can provide backup, a 5 kWh battery has a high chance of already being drained, or close to it, when a blackout occurs. If a reserve of even just a couple of kWh is set so there will always be some energy in the battery when a blackout happens, it will greatly reduce the already low savings on bills it can provide.
3. Even if fully charged when a blackout occurs, the amount of backup power it can provide is much less than for a larger battery.  This means you can run fewer things at once, and turning on the kettle for a cuppa runs an excellent chance of tripping your battery.
4. You only get to use the battery rebate once, so it makes sense to use it on a battery that provides significant savings while also providing the backup capability you want.

What prompted me to start wildly stating facts about puny battery systems was a letter mailout campaign by Solar Battery Group.  For months now, they’ve been telling people they can get a low cost battery installed, but they only bother to mention it’s a 5kWh system in asterisk-anointed small print at the bottom of the page.

Solar Group’s Battery Mailout Offer

Here’s a letter Solar Battery Group mailed out last year in South Australia.  A couple of details have been removed to protect the almost certainly innocent:

The way the letter says “one-time subsidy” gives a sense of urgency, but you don’t have to hurry because the battery rebate isn’t ending anytime soon.  And it is a “one-time” subsidy in the sense it can only be received one time per property — so don’t blow it on baby’s first battery.

They give the “Solar Battery Group best price guaranteed“, which sounds good, but all it means is that it’s the best price that Solar Battery Group is going to give you, which means all they’re doing is promising not to offer a lower price.  A promise that’s not all that useful.  In fact, it’s a downright cut-block.

They break down the price they guarantee as follows:

Notice they don’t point out it’s only for a 5kWh battery here or anywhere in the body of the letter.  To work that out, you either have to know that $1,650 is the rebate amount a 5kWh battery received last year — which isn’t bloody likely for the average person receiving the letter — or you can look at the smaller print at the bottom of the page.

So it’s only for 5kWh, which is the minimum size the rebate covers, it applies to standard metropolitan installations, and can vary according to circumstances.

Their NSW March Mailout

Here’s an image of a letter Solar Battery Group mailed out in NSW last month.  Identifying bits have been blotted out.  While I’d like to be able to say that Solar Battery Group had decided to shake things up by taking a Salvador Dali-esque style approach to formatting their letters, I’m 100% confident the wonkiness is due to the way it was scanned:

It follows the same basic format as the previous letter.  Once again, the fact the price is for a 5kWh battery is only pointed out in the small print.

Real Tree Paper Was Used For This

The two advertisements above were printed out on paper, put in actual physical envelopes, and mailed out to owners of rooftop solar using a system known as “the real world”.  (Yes, it’s still around.)  This method gives an air of authority that advertising normally lacks.  Despite having the Solar Battery Group logo at the top of the page, the NSW recipients assumed it was from their local council.  Addressing the letter to:

Would have also added to its air of authority, even though in the small print they had to add…

They Didn’t Understand It Was For A Puny Battery

Not only did the NSW household not realise, at first, that the letter was advertising, they also didn’t understand that it was for a tiny 5kWh battery.  They already had a battery quote from another installer for around $9,000 and assumed that he must be a rip-off artist, as that’s over three times as much money as this offer.  But that quote could have been for a battery more than three times larger.  A size far more suitable for typical households.

Sure, it does say in the small print that it is a 5kWh battery, but people who aren’t familiar with home batteries often won’t know that’s a tiny battery unlikely to meet their needs.

Solar Battery Group Says It Is An Entry-Level Offer

James Hetherington, CEO of Solar Battery Group, told SolarQuotes was just one of several offers the company pushes:

“Our intention with this campaign is to highlight a specific entry-level option that we believe is both accessible and valuable for a segment of the market. A key objective of this campaign is to challenge a common perception we encounter, that home battery systems cost well in excess of $3,000. We are proud to have been able to break this price barrier with an entry-level solution, and that is why this point is emphasised in our messaging.

The letters state that fully installed batteries are from the amounts specified in the letters, and the advertised pricing is based on batteries that are 5kWh. The battery size that is appropriate for the customer will depend on their personal needs and objectives in purchasing a battery. We would always assess what is fit for purpose for a customer.

We note that the Federal Government’s Cheaper Home Battery Program discount applies to batteries that are at least 5kWh and less than 100kWh. Given that a 5kWh battery is a sufficient size to enable access to the discount, we consider that it is appropriate to advertise prices based on a 5kWh battery.

The 5kWh system referenced is designed as an entry point for customers who are looking to begin their battery journey or upgrade an existing solar setup in a more affordable way.”

So What Size Battery Should I Get?

What size battery will be best for you depends on your individual circumstances, but in my view it’s not likely to be 5kWh.  A simple rule of thumb is:

Buy battery capacity equal to your typical overnight electricity consumption, including the hour after sunrise and before sunset, plus extra kWh equal to the amount of secure backup capacity you want.

But another rule of thumb you may want to consider first is…

It’s hard to make a battery pay in Victoria and almost bloody impossible in Tasmania, so unless you value backup power, think carefully before getting one there.

But there’s also this rule of thumb that applies to 1.9 million Australians…

If you’re in South Australia, go larger than you otherwise would because electricity prices are high and time-of-use tariffs have a morning peak, making the return from batteries higher than anywhere else.

Then there’s this rule of thumb, which I feel I should mention since the world’s oil supply is in dire straits at the moment…

If you’re considering getting an EV — which you bloody well should be at this point if you drive — then get a larger battery than you would otherwise, especially if you know you’re unlikely to charge your EV during the day.

Finally, while it’s not a rule of thumb yet, you may want to consider…

Homes with smart meters in NSW, SE QLD, and SA will be able to get 3 hours of free electricity, capped at 24kWh, every day, from July, while Victorians will be able to get this from October.  Plans with free electricity periods are already available in many areas.  As this can improve the return from batteries, it can increase the amount of capacity it makes sense to get.

Now I’ve displayed my thumb collection, you may be wondering…

What the hell does all this mean in regard to what size battery I should get?

It means you should get more than 5kWh.

Unless your overnight electricity consumption is unusually low, a two person household that isn’t worried about having backup power they can rely on, should get a minimum of 10kWh.  That’s twice as much as 5kWh.

But in general, my advice is most households should get around 16kWh or more.  For many, this will be a kind of sweet spot between almost maxing out the amount of battery rebate per kWh, and getting hefty savings/credit on electricity bills.  It’s also more than three times as much as 5kWh.

However, unless your overnight consumption is below average and likely to stay that way, I’d say everyone should at least consider whether they should get 20kWh or more, as in many situations it will provide enough savings to be worthwhile, while providing good backup capability.

Don’t Blow Your Battery Rebate On A Tiny System

What battery capacity is best for your needs is something that’s hard to pin down, but it’s not bloody likely to be 5kWh.  While Solar Battery Group may try to upsell larger batteries to those who contact them, the type of advertising they’ve used is likely to result in people blowing their one and only use of the battery rebate on a system far too small for them.

To work out what battery you really need, check out our battery explainer page and try out our battery calculator.