Northern Territory’s $6,000 Solar Battery Subsidy May Become $12,000

Northern Territory solar battery subsidy

A battery shed near Alice Springs. Photo: Lloyd Peacock

The Northern Territory has the nation’s most generous solar battery subsidy: $6,000 off a battery system.  It’s already the biggest battery subsidy in Australia by a long way, and if the Country Liberals win the NT election this month they will double it to an insane $12,000.  And by insane, mean they’d be nuts to make it that high.

The existing $6,000 subsidy is called the ‘Home and Business Battery Scheme‘ and has these features:

  • It’s a straight $6,000.
  • It’s available to homes and businesses.
  • It can be put towards a battery system or a solar & battery system1.
  • The smallest battery capacity allowed is 7 kilowatt-hours.
  • It can be used for on-grid or off-grid batteries and can be used to replace old batteries.
  • There can only be one application per property and per homeowner
  • If you are a homeowner and also own a business, you can apply for one grant for your home and one for your business.
  • It’s almost useless for most households that currently have solar as they will lose their high Premium feed-in tariff.
  • You can apply until the 30th of November or until the money runs out — which may be soon.

The NT scheme deserves cheers for being straightforward with — hopefully — low administration costs. 

It deserves jeers because it’s lousy at meeting its stated goal of helping the NT reach 50% renewable electricity generation by 2030. 

The subsidy began on the 14th of April.  I didn’t write about it before the crazy election promises started because the Northern Territory is so small I overlooked it.  It’s only 1.4 million square kilometres, so I think that’s understandable.  After all, there are dwarf planets out there with more land area.

I’m assuming most Territorians who bought solar before April 14th are unlikely to be interested in the rebate as they will lose their Premium solar feed-in tariff.  

Those who want a subsidised battery will have to decide if they want to risk waiting for the election result and the possibility of a $12,000 rebate or grab the $6,000 rebate ASAP. With only 130 rebates up for grabs (roughly 1 in 1,000 NT homes and businesses), there’s a real risk of missing out altogether if the Country Liberals don’t win the election. 

via GIPHY

If a property already has solar panels, the $6,000 can be used to offset the cost of a battery system that stores at least 7 kilowatt-hours2.

For homes and businesses that don’t have solar power, the subsidy can go towards a solar & battery system.  Again, the battery must have a capacity of at least 7 kilowatt-hours.

You Can’t Keep The Premium Solar Feed-in Tariff

The Northern Territory solar feed-in tariff, which was the highest in the nation at 26 cents per kilowatt-hour, was cut for new solar power systems installs in April to just 8.3 cents.  Solar systems installed before then still get the old rate, which is now called the Premium feed-in tariff and is equal to the cost of grid electricity.  

For households receiving the Premium feed-in tariff, there is no direct financial benefit from getting a solar battery.  This is because using one kilowatt-hour of stored electricity will save a household 26 cents worth of grid electricity but, because of battery losses, they will lose around 30 cents of solar feed-in tariff.  This is clearly a losing proposition. 

Some homes may choose to forfeit their premium feed-in-tariff in return for the benefits of silent, instant and low carbon solar battery backup.  And extra payments could be received from joining a Virtual Power Plant, but they are only just starting to be trialled in NT.

Someone receiving the Premium feed-in tariff for a very small solar power system may consider losing it worthwhile in return for getting the subsidy — especially if it’s increased to $12,000.  But I recommend carefully checking if you’re likely to come out ahead with a battery, no matter what the subsidy is.

The Premium Feed-in Tariff Will Be Around For A While

I contacted the Northern Territory’s Power & Water company and was told there currently isn’t a set time for the Premium feed-in tariff to expire.  I was told:

“If you have it already it will stay as long as there are no changes at the property as in meter upgrades or adding a battery etc.”

While I wouldn’t count on it lasting forever, this suggests it will be around long term. 

The Premium Feed-in Tariff Can Save $6,000 in 6 Years

Current solar inverter size limits in the Northern Territory are here.  While the Premium tariff was available, the maximum system size was set by panel capacity and was 4.5 kilowatts of panels for single phase homes and 6 kilowatts with 3 phase power. 

Update 18th August:  In the comments, Greg from Darwin has pointed out this was changed around 2014 or 2015 to the current limit of 5 kilowatts of solar inverter capacity for single phase properties and 7 kilowatts for 3 phase.

If you are in Darwin and have:

  •  4.5 kilowatts of north-facing solar that generates 7,100 kilowatt-hours a year.3
  • A fairly typical solar self-consumption rate of 25% which means you receive the feed-in tariff for 75% of solar electricity generated.
  • The Premium feed-in tariff of 26.05 cents. 

Then each year you keep the Premium feed-in tariff will save you $945.  Assuming prices don’t change this would total $6,000 after 6 years and 4 months and it would take 12 years and 8 months to total $12,000. 

I wouldn’t bet on the Premium feed-in tariff lasting for 12 years, but because solar battery prices will fall in the future, I recommend carefully considering whether or not the subsidy is worthwhile.  Households may be better off saving the money they make from the Premium feed-in tariff and using it to buy a battery in the future.

Restrictions

If you decide you want the subsidy, there are conditions that must be met:

  1. It must be installed in the NT.  Kind of obvious, but it’s mentioned several times, so I imagine they must have been burned by some Queensland con artist in the past.
  2. You must be the home or business owner.
  3. The battery system must have a usable capacity of at least 7 kWh
  4. The system must cost at least $6,000  so you can’t have money left over to put in your pocket.
  5. You can’t buy from a close relative.
  6. You can’t install the system yourself.

You Can’t Have Money Left Over

If you are a devious sort who is scheming about getting a stack of cheap batteries that total 7 kilowatt-hours for a couple of grand and pocketing what’s left of the $6,000 — forget about it.  They considered that angle and the system must cost a minimum of $6,000 before GST. 

You Can’t Buy From A Close Relative

The terms and conditions say the subsidy isn’t available if you buy a system from a close relative.  Actually, it just said “relative” which got me worried given our numbers, humans are one of the most inbred mammals species around4 and that pretty much makes us one big family.  It makes organ transplants feasible because if we had the genetic diversity of chimpanzees it would be much harder to match donors and recipients.  Fortunately, they define “relative” as:

“Relative in relation to a person, means the spouse, parent or grandparent, child or grandchild or brother or sister of the person.”

So there is no need to pull out your family tree when buying a solar battery and the NT’s extended cousin networks aren’t locked out of the subsidy.

You Can’t Do It Yourself

The subsidy is not available to people who install the battery system themselves.  This point is specifically mentioned, despite the fact it could have been covered under the “no close relatives” clause.  

You Can’t Be A Ghost

If you are human, you should be fine, but the terms and conditions state:

“A home owner must be one or more natural persons.”

So ghosts and robots are right out.  One million ants in a trench coat would also be prohibited.

But if one million termites decide to borrow the ants’ coat and apply, I’d recommend the NT government approve the paperwork. Since by weight, termites have got NT humans beat 500 to 1, it’s probably best not to annoy them. 

via GIPHY

How To Get The Cash Money

The process of getting the $6,000 is straight forward:

  1. Get a quote from a participating battery installer. This will be most of them as it’s not too difficult. 
  2. Fill in the online application here.
  3. After your application is processed, receive a voucher number your installer can use to get $6,000.

Because the subsidy comes off the price you pay there is no need to shell out the full cost and then wait to receive a rebate, which is a stress-saving way to do it. 

Note you can get more than one quote, but there’s no need to go crazy.  Three quotes should be fine unless you are the sort of person who pays too much attention to detail and so feels compelled to click on every single link.  Just select the quote you want to go with when applying for the subsidy. 

A Satisfied Recipient

I spoke to Hunter Murray, a member of the Australian Electric Vehicle Association and resident of Alice Springs, who has used the subsidy to get Tesla Powerwall batteries installed on two properties.  He was very happy to receive the subsidy and said it was relatively easy to apply for.  The online application was only a couple of pages, though he mentioned he needed to include a copy of the invoice for his existing solar power system. 

He said it took two to three weeks for his application to be processed, which he thought was reasonable.

Battery Installation Must Be Within 6 Months

Once you are approved and receive the voucher number, the battery system must be installed within six months.  Solar battery installations usually only take a month or two, but given the remoteness of the Northern Territory, it is possible you may have to wait a little longer. 

Subsidy May Run Out Soon — Like Today

The subsidy is available until November 30th 2020 or until the money runs out.  And there is only enough money for 130 battery systems, as this sentence I took from the NT Government fact sheet demonstrates:

Unless more money is provided, it’s possible applications that have already been submitted will hit the limit.  In this case, if the scheme isn’t extended and the Country Liberals don’t win, then this article isn’t much use to anyone.  If you want to be sure of getting a subsidy I don’t recommend delaying but, on the other hand, you probably don’t want to miss out on $12,000 if that becomes available. 

The Subsidy Is Straightforward

I have to give the NT Home & Business Battery Scheme credit for making the subsidy straightforward.  It’s just a straight $6,000 off the cost of a battery system or solar and battery system.  Other solar battery subsidies are more complicated with more involved conditions for both property owners and battery providers and this increases administration costs. 

Besides keeping things simple, the Northern Territory also deserves credit for using the “smartygrants” system, simply on account of how its name is brilliant.  I wish I’d thought of it. 

The Subsidy Is Bad At Its Job

At the very start of the terms and conditions for the Home and Business Battery Scheme terms, it says:

“The Home and Business Battery Scheme (the Scheme) has been designed to support the Northern Territory Government’s plan for 50% renewable energy by 2030, while maintaining secure, reliable and affordable power for Territorian homes and businesses.”

Aiming for 50% renewables is a great idea.  After all, it’s not as if Darwin can handle much more in the way of global warming.  It hit 38 degrees in Darwin last year — which is equal to about 280 degrees in places where it’s not so humid. 

Unfortunately, their battery subsidy is not helping meet this goal. 

More Effective Options

While batteries can help integrate renewable generation into the grid, the point to subsidize them would be when $1 of battery subsidy results in a greater increase in renewable capacity than directly subsidizing renewable capacity by $1.  There is nowhere in Australia anywhere near this point yet. 

To me, it is clear that the Northern Territory could get much closer to their goal if they had used the $800,000 to put solar panels on government buildings or perhaps just schools.  While the Goodies School (Good Shepherd Lutheran College) has a nice set of panels, the roofs of most Darwin educational institutions are bare. 

Another option would have been to use the money to provide an incentive for landlords to install solar power systems due to Darwin’s large population of renters. 

They also could have put the money aside to pay for transmission upgrades to ensure people who want to pay for their own solar systems can export all or most of their surplus solar electricity to the grid. 

Good Money After Bad?

I’m not sure what the NT is trying to achieve with this battery subsidy.  They may have the goal of reducing peak grid electricity demand in the evening, which can be very high due to heavy air conditioner use.  But if that is their goal they should say so and not say their goal is to reach 50% renewable generation.

For a solar installer to begin providing batteries is a big investment.  It takes time, money, training, and effort.  And trust me, when it’s 38 degrees in Darwin, everything takes a lot of effort.  The Home and Business Battery Scheme subsidy should do a good job of encouraging some installers to move into providing suitable batteries.  

But when the $6,000 dollar subsidy suddenly ends there’s likely to be a battery installation blowout.  And if the subsidy is boosted to $12,000 and suddenly stopped, we’ll hear the sound of the battery blowout all the way down here in Adelaide.  It will be worse than that time Krakatoa exploded and we thought Western Australia had blown up. 

If the NT want to prevent this they should provide an additional subsidy after the big fat subsidy stops.  Without this, there may just be a mini solar battery boom that doesn’t really go anywhere or provide any lasting benefit to installers or customers. 

Unfortunately, as we saw when they cut their generous solar feed-in tariff by two-thirds without warning, the Northern Territory doesn’t have a good track record of managing subsidies sensibly.  It can make a lot more sense to taper these things off gradually.  There should be a happy medium between dying of thirst and drinking from a fire hose. 

Footnotes

  1. if the property doesn’t already have solar
  2.  If a hybrid or battery inverter is required the subsidy can be used for that as well.  This still applies if the hybrid inverter replaces the existing grid-tied inverter
  3. Darwin is so close to the equator south-facing panels will only produce about 15% less energy than north-facing ones.  So if the only good location on your roof for panels faces south, don’t sweat it.  Save your sweat for normal day-to-day life in Darwin.
  4. This is one reason why we don’t get along with respiratory viruses.
About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. Greg (Darwin, Australia) says

    “While the Premium tariff was available, the maximum system size was set by panel capacity and was 4.5 kilowatts of panels for single phase homes and 6 kilowatts with 3 phase power. ”

    As indicated by your linked page https://www.powerwater.com.au/customers/power/solar-power-systems/pv-class-requirements, this was amended in about 2014 or 2015 to a maximum grid-tied inverted size of 5kVA (1Ø) and 7kVA (3Ø).

    As you say, even with this subsidy, installing a household battery is not yet financially viable. However, there are other reasons for spending the money, which include making progress towards cheaper, more reliable, better quality, more resilient, more secure, more benign (less concentrated energy ∴ less explosive), inexhaustible (I exaggerate: actually ~5,000,000,000 years until the sun becomes a red giant), more consistent, zero-marginal-emissions energy.

    • Ronald Brakels says

      Thanks for the information on when the inverter limit rules changed. I’ve added an update to the article.

  2. Des Scahill says

    Further to Greg’s comment above, what is of some interest is that the ‘blame all the electricity supply problems during heat-waves on renewables’ ploy by Independent Grid Operators seems to be in full swing.

    In this article I just found at: https://www.bbc.com/news/world-us-canada-53788018 you will find the following…

    “California’s Independent System Operator (CISO), which manages the state’s power, has declared a Stage 3 Emergency, meaning “when demand [for electricity] begins to outpace supply”.

    Because so much of the region’s power relies on solar and wind energy, and because people use their electricity for air conditioning, during heatwaves the power grid becomes strained and is at risk of completely malfunctioning… ”

    The whole article relates to the extreme temperatures currently being experienced in the region… “The current heatwave stretches from Arizona in the south-west, up the coast to Washington state in the north-west. ”

    Now, it may be co-incidence, but this article on SBS News at:
    https://www.sbs.com.au/news/the-trump-administration-has-approved-oil-drilling-in-alaska-s-national-wildlife-refuge does seem of relevance.

    “Donald Trump’s administration has finalised a plan to allow oil and gas drilling in Alaska’s Arctic National Wildlife Refuge, putting it on track to issue decades-long leases in the pristine wilderness area before a potential change in US leadership.”

    and the energy industry claims that “drilling would create jobs and boost the state’s economy, which is reliant on oil production.”

    Here’s a fuller quote from the article…

    “The US administration’s decision makes the entire coastal plan area, or about eight per cent of the refuge available for oil and gas leasing and potential development.

    The energy industry and Alaska Governor Michael Dunleavy said opening ANWR to drilling would create jobs and boost the state’s economy, which is reliant on oil production. Democrats and green groups, meanwhile, criticised the move, saying it would harm the Arctic’s unique ecosystem and native people.n effort to secure the USA’s energy supply, President Trump has just approved oil exploration.”

    We’ve all seen similar arguments before, but it also makes me wonder just how ‘profitable’ Australian efforts to export natural gas to other countries will ultimately prove to be.

  3. There are at least two solar FITs in the ACT higher than NT. Ours (not the highest) is a gross FIT of 42.5 cents/kWh.

    • Ronald Brakels says

      I probably should have made it clear that the NT’s solar feed-in tariff was the highest available for households installing new solar systems at the time.

  4. Did anyone else click on the link –

    “Three quotes should be fine unless you are the sort of person who pays too much attention to detail and so feels compelled to click on every single link. ”

    Very funny 🙂
    Great article

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