With the federal battery rebate kicking in from July 1, demand for home battery quotes has gone ballistic.
It’s not hard to see why. Thousands of dollars in subsidies. Rising grid prices. More households with solar. And batteries finally starting to feel like part of the modern home, not a science experiment bolted to the garage wall.
So the question flying in thick and fast is:
“What size battery should I buy?”
But I reckon that’s the second question you should be asking.
The first is this:
“Do I want a battery that makes financial sense, or one that makes me happy?”
Because the battery that gives you the best financial return is likely smaller than you expect. For fastest payback, you want it to fully discharge most nights, so you’re wringing every drop of value from those lithium cells. For many homes, that’s a battery as small as 5 kWh. In fact, some well-meaning government departments have even recommended a teeny tiny 5 kWh battery as optimal for most homes.
But there’s a catch.
It is not hard to tell which house on the street is mine when there’s a blackout.
Blackouts & Battery Degradation
Go too small and you’ll regret it. Not in your payback spreadsheet, but in real life.
You’ll be the one in a blackout with no reserve and no lights (if you are worried about blackouts, you should reserve at least 2 kWh for backup duties).
You’ll be the one kicking yourself when winter nights demand a top-up from the grid during the peak pricing period.
And don’t forget: batteries degrade. Most are only warranted to retain 70% of their original capacity after 10 years. So that “just enough” 5 kWh battery could shrink to 3.5 kWh by the time it hits double digits. Still technically working, but barely. You’ll spend more time topping it up and less time feeling like it’s pulling its weight. At that point, you’ll ask yourself: why did I even bother?
A Different Kind Of Rational
Which is why, if you can afford it, adding a few extra kilowatt-hours now makes more sense than ever. With the new rebate, those extra kWh come at a serious discount. What felt like a splurge a few weeks ago might now be the smarter, longer-term move.
It’s not irrational. It’s just a different kind of rational.
So go ahead, crunch the numbers. But before you do, be honest about what’s more important to you, the shortest payback period, or the peace of mind that your battery’s actually got your back.
About Finn Peacock
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Yes, government/s are sending mixed messages, ie a small battery is all you need, but we want you to sign up to a vpp. Sort of mutually exclusive there isn’t it?
Then they say you can’t have a battery subsidy unless you install solar…
but if you want me to sign up to a vpp, wouldn’t a bigger battery and no solar give better bang for that buck? After all they are curtailing solar right now, so plenty of solar generated power available from other people to charge that battery available right now…
Good advice again. Also, with ability to discharge to grid when FiT is double digits…quadruple if you count the cents, the payback time for a bigger battery is not as long as just with personal home use.
The return for this week from mine is $160 with a day to go. Must admit though, the choice to turn more heaters on or keep discharging at $15.00/kwh isnt always easy.
Consequently, am considering g adding another 2x 3.2kwh modules [$5,000] to a notional 19.2kwh system, thats down to 97% state of health after 30 months.
I think those 2 new modules would be dragged down to 97% too right from install date, which is holding me back.
Yes, our 3-year-old 8 kWh of storage struggles during Winter.
The combination of shorter days, cloudy days and more AC use has us importing more energy in June and July.
I am contemplating adding another 3kWh module but still debatng need vs want. Luckily the kWh price has fallen by 1/3 since buying the original batteries.
Which is the other variable to factor in. How far are prices going to fall after the initial flurry.
Does Solarquotes have any thoughts re. Australian made batteries from Empower?
Not to mention expanding the battery later will not be eligible for more battery rebate, so would cost full price (and another call-out fee). That’s if the specific battery modules are even still available and haven’t been discontinued / superseded.
Bigger battery = bigger rebate. Do it once, do it right. Choose the largest, most future-proof battery size your budget sensibly allows.
Thank you, Finn. Another great article.
Worried I’ll never recover the cost of battery installation. We work away from home in daylight hours and draw an average of 31kWh every night. With a 3-phase house with a high current draw, options are limited. More frustrating is our 15 year-old 5kW SMA and Trina combo still works fine, (reluctant to replace it). The latest price increase is however a strong motivator:
~ Service 203.5c/day
~ Peak 49c/kWh
~ Off Peak 32.8c/kWh
~ CL1 22.2c/kWh
~ FiT Step1 -4c/kWh
~ FiT Step2 -3c/kWh
~ Solar FiT -4c/kWh
~ Smart FiT -16.7c/kWh
A Sungrow SH20T inverter and SBH400 battery with 15kW of new panels seems best. With a decline to 70% over 10years, the battery should still be delivering the 31kWh I need at the end of the warranty.
Even so, with Daily Service Charge of a quarter of my ave monthly bill ($260), I can’t see my Sungrow costs being recovered over 10 years.
Value your thoughts.
Thanks,
Andrew (Tamworth – Red Energy on Essential Energy & no gas)
We have gone fully electric, heating, heat pump hot water and induction stove top. Our battery is 19 kWh but I have push up the reserve to 15%. Most morning now in the winter the battery is empty and we use the grid to get the home back to 20 degrees Centigrade. We installed double glazed window so even this morning when it was 1 degree Centigrade outside the inside was still 16 degrees Centigrade.
Hi, nice article. I have a 13.7 battery which i can run a 5kwh ducted air conditioner all day off my 17kw solar system with no grid input. However at night when running my aircon off the battery, i get 2 hours then i have to rely on grid supply. Have set my reserve at 15% for blackout protection. So looking at adding another 13.7 battery, seeing the federal Gov is being soo generous. In my opinion a 5kwh battery just is not enough. Regards Hans
The rebate scheme seriously rewards going big. In my quote, 24kWh of Sigenstore (3 x 8kWh modules) costs about the same as 13kWh. 16kWh (8 + 8) somehow costs even less than 13kWh (8 + 5). The controller bit, installation, etc all cost about the same, after which a few additional stacked 8kWh modules come very cheaply. With that, I can not only waltz through a blackout, but get through a wet winter week or do some serious wholesale exports into the peak, cutting years off my payback. Considering that you can also import from low and negative price events in the day, you don’t even have to match it to your PV size – it’s just something you have to have to qualify for the scheme (that would be just as effective for people without solar, but isn’t being allowed simply because it is being coupled to the SRES scheme).
Adding in that you only get one bite ever at the rebate cherry (which will never be bettered), why not go big?
You aren’t wrong Finn. The wife and I ran through many a scenario like you mention with our energy usage now and in the future.
Before that I was aiming for something around 10kWh and that would just cover us overnight and dodge peak pricing. There wasnt much consideration beyond that.
Now that we have brainstormed and ran the numbers, we have pulled the trigger on 16kW/32kWh Solar/Battery & 7kW EV charger for just under $27k installed!
Complete energy independance is what we landed on and enough battery to mess around with Amber.