South Australian Home Battery Scheme Subsidy Reduction Flagged

SA Home Battery Scheme subsidy

The South Australian Government has announced the subsidy level and cap for its Home Battery Scheme will be decreased soon.

The Scheme, which kicked off in October 2018, aims to support the installation of 40,000 solar battery systems across the state through the provision of the subsidy – the level of which depends in part on the size (capacity) of the battery. Low interest loans for additional or new solar power capacity as well as the balance of the battery are also available.

The subsidy is currently $500 per kWh for non-energy concession holders and $600 per kWh for those that are. The maximum subsidy level is currently capped at $6,000.

As to what the reduced subsidy and cap is won’t be publicly announced until this Friday (System Providers will find out Thursday), which will give six weeks’ notice of the change that kicks in on Wednesday, April 15, 2020.

“The subsidy uptake has significantly increased in recent months, with over 7,000 subsidies now approved,” says part of a statement attributed to SA’s Department of Energy and Mining. “Approximately 79 megawatt hours of storage capacity is now committed to under the Scheme – over 60% of the current capacity of the Hornsdale Power Reserve – the biggest battery in the world.”

The Department also notes further incremental reductions in the subsidy may occur before the end of the year. There’s no mention of why the reduction is occurring but it was always on the cards, so it’s not as though it’s a bombshell announcement.

If I was a cynical type of fellow, I might suggest the length of notice could be to get a sense of urgency happening to lift uptake further as this program has been hanging around for a while. There’s nothing like a “subsidy reduction soon!” sales message to motivate folks. Thankfully I’m not cynical, otherwise I might state that in an article or something.

But in December, there were reportedly 5,000 batteries installed or pending installation, so uptake since then has improved. There have also been reductions in the cost of (some) batteries since the program began. Perhaps the Department feels there’s enough momentum building that the Scheme doesn’t need to be so generous. Anyway, the reasoning for the subsidy and cap reduction might be revealed on Thursday/ Friday.

Think Carefully, Crunch The Numbers

Whether the battery subsidy reduction will be large or small, South Australians considering beating the April deadline should consider an energy storage purchase carefully. While it’s a very generous subsidy, a battery system purchase will remain a significant outlay and in many cases payback on the battery won’t be achieved within its warranty period – usually ten years. This becomes an even more important consideration if a loan is being taken out to finance the balance of a solar power + battery system.

A useful tool to help determine if a battery is right for your household at the current time is SolarQuotes’ solar and battery calculator. It will provide an estimate of overall payback, and how savings are affected by a battery and solar panels separately. You’ll see while solar-only has a very rapid payback, adding a battery greatly extends it.

Just note the calculator doesn’t automatically factor in the SA battery subsidy at this point, but a post-subsidy cost can be manually entered to base the calculations on.

The Department also makes mention of progress of Virtual Power Plant (VPP) programs in SA, with 7 now available. We’ve got those covered too in our VPP comparison table.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

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