Tesla Lowers Powerwall 2 Price $2,200 In SA Virtual Power Plant Deal

Tesla Powerwall 2 SA battery deal review

If you add $2,200 to the existing $6,000 SA battery subsidy, South Australians can get an $8,200 discount on the TeslaPowerwall 2. But as always, read the small print.

On Thursday Tesla announced it will lower the price of its Powerwall 2 battery storage system by $2,200 for South Australian residents.  This will make the Powerwall 2’s minimum installed cost around $7,100.  After adjusting for the SA battery subsidy it’s now only around $1,000 more than it was at the start of 2018.  With luck we won’t have to wait too much longer for it to be back down to where it was 20 months ago.

The price cut does come with a couple of catches.  It is only available to South Australian residents who are on-grid and have a suitable solar power system or are willing to get one.  It is also necessary to allow Tesla control of the Powerwall 2 battery, as it will be used as part of a Virtual Power Plant (VPP).  If you don’t like this you can pay a fee and leave immediately or you can wait and escape Scott free after only 12 months.

James Doohan: Technically Scott free.

If you decide to stay as part of the, VPP the Tesla Energy Plan will charge you the lowest rate for grid electricity in South Australia I know of and has no daily supply charge.

If you are thinking of getting a Powerwall 2 to save money, this price decrease can make it possible if — and only if — your electricity consumption and solar generation are suitable.  Even with the decrease I don’t see how it can pay for typical households.  But if you want a Powerwall 2 and aren’t worried about making money from it, this might be a good opportunity for you to get one.

Unfortunately for Tesla, I think a significant number of customers will be put off by their failure to mention Powerwall 2’s installation cost anywhere in their information on the SA offer.  Price cuts make people happy, but suddenly finding out they are expected to pay an installation cost that is more than what they are being asked for the battery is just likely to piss them off.  It’s like Tesla got all dressed up in his Sunday best and then, just before leaving the house, decided to slap a cow pat on his head as a hat.1

Bust A Deal Face The Wheel

If you make use of this offer you are expected to remain part of the Tesla Energy Plan and VPP for at least 12 months.  But if you want to bust the deal you can pay a termination charge of $100 for each month early you leave.  So you could join, get the $2,200 discount, and then pay $1,200 to immediately break free and still be $1,000 ahead.

When you think about it, saving $1,000 is a wheely good deal.

If you already have a Powerwall 2 and want to join Tesla’s Energy Plan the good news is you can without any fees or charges when you join or leave.2

The Tesla Energy Plan

If you join their VPP, Tesla’s Energy Plan has a couple of impressive features and a couple of decidedly sub-impressive features:

  • Per kilowatt-hour grid electricity charge:  31.1 cents  (Excellent!)
  • Daily supply charge:  0 cents  (Stupendous!)
  • Solar feed-in tariff:  10 cents  (Boooooo!)
  • At times electricity from the Powerwall battery will be used to support the grid.  There is no mention of payment for this, so I assume there is none, and no indication of how much or how often this will occur.  (A concern.)
  • At times the Powerwall 2 will charge itself from the grid so it will be ready to supply energy to the grid later.  You will not have to pay for this.  (Good to know.)

Not having to pay any supply charge is a good thing.  Looking at the first plans I come across when I look for ones from Australia’s three largest largest electricity retailers I see their annual supply charges in Adelaide are:

  • Origin Energy: $304
  • AGL: $325
  • Energy Australia: $281

It appears not having to pay supply charges will save around $300 a year compared to these plans.  However, Energy Locals, which is the retailer that will be administrating Tesla’s Energy Plan, has annual supply charges in Adelaide of only $257 a year.

Tesla’s charge for grid electricity is also the lowest I’m aware of.  Looking at the plans of the big three that appear most suitable for solar households I see their per kilowatt-hour charges are:

  • Origin Energy:  36.9 cents
  • AGL:  40.4 cents
  • Energy Australia:  38.5 cents

The plan with the lowest per kilowatt-hour charge I can find is around 35.1 cents from  Energy Locals.   This makes the Tesla plan around 11% cheaper per kilowatt-hour.

The feed-in tariff is not so great at only 10 cents.  This is less than half the 22 cents from Amaysim that is available to the majority of solar homes in South Australia and also considerably less than the 15.5 cents Energy Locals offer.3

Energy Losses From VPP Grid Support

Because Tesla gives no information on how much power from the battery is likely to be discharged to support the grid, I will make an educated stab in the dark. If the Powerwall 2 battery supplies energy to the grid equal to discharging at its maximum continuous power output for 50 hours a year the household will lose 250 kilowatt-hours of energy.  If one quarter of this comes from solar power that would have received a feed-in tariff while three-quarters represents extra grid consumption, then the average annual increase in their electricity bill would be $64.

This doesn’t seem much compared to saving around $300 by not having to pay supply charges.  But it is a complete guess.  One I’m forced to make as Tesla gives no indication of what it’s likely to be.  I suspect the cost will be fairly low as it doesn’t make sense to create a VPP and then drive people away.  Especially when they are free to leave after 12 months.

Still Unlikely To Be Worthwhile For Most Households

Even with the reduced price, the Tesla Energy Plan, and the SA battery subsidy; a Powerwall 2 seems unlikely to be economically worthwhile for most solar households.

A couple of weeks ago I looked at the best electricity plans for typical solar households in capital cities.  In Adelaide the example household had three people in it and the following characteristics:

  • Solar power system size: 6.5 kilowatts
  • Total annual electricity consumption: 6,326 kilowatt-hours
  • Annual grid electricity consumption: 3,793 kilowatt-hours
  • Annual solar self consumption: 2,533 kilowatt-hours
  • Annual solar electricity exports: 6,515 kilowatt-hours
  • Feed-in tariff:  22 cents with Amaysim retail plan.
  • Annual electricity bill: $464.

If this household gets a Powerwall 2 and Tesla Energy Plan and I make these assumptions:

  • 75% of the household grid electricity use is replaced with stored energy.
  • The Powerwall 2 is charged entirely by rooftop solar.
  • The Powerwall 2 has a round trip efficiency of 85%.4
  • No kilowatt-hours are discharged from the battery to support the grid.

Then the characteristics of the household would become:

  • Total annual electricity consumption: 6,753 kilowatt-hours
  • Annual grid electricity consumption: 948 kilowatt-hours
  • Annual solar electricity self consumption: 3,272 kilowatt-hours
  • Annual solar exports: 3,243 kilowatt-hours
  • Average daily stored energy consumption: 7.8 kilowatt-hours
  • Annual stored energy consumption: 2845 kilowatt-hours
  • Annual losses from battery use: 427 kilowatt-hours
  • Annual electricity bill: $29 credit

So, using my assumptions, this household would be around $493 a year better off.  If they paid the minimum installed cost of around $7,100 for a Powerwall 2 it would have a simple payback time of 14.4 years.  If my guess that supporting the grid will cost the household $64 a year is correct then the simple payback time would be 16.6 years.  As both these would require the Tesla Powerwall 2 to last well beyond its warranty to pay for itself, this is not a good deal for the household.

Optimistic Scenario:  Vampires

In the above example an average of 7.6 kilowatt-hours of stored energy is supplied by the Powerwall 2 each day.  As the battery’s usable capacity when new is 13.5 kilowatt-hours, it’s only being used at a capacity factor of 58%.  If this figure was raised it would improve Powerwall payback time but there are two main problems with getting it to a high level:

  1. Most households won’t use all the energy in a fully charged Powerwall 2 every night.
  2. There will be times when the battery will hold less energy than the household wants to use overnight due to cloudy whether and/or daytime electricity consumption being high.

Even if I assume a household with a 6.5 kilowatt solar system is inhabited by vampires that use no electricity during the day and they use all the available stored energy in a Powerwall 2 every night, it’s still likely to be used at a capacity factor of less than 90%.  This is because there will be many overcast days when the 6.5 kilowatt rooftop solar power system will be unable to fully charge it.

But if it’s assumed this house is located far enough inland so they can use the battery at 90% capacity factor thanks to there being few cloudy days and all the inhabitants are vampires that lie in their coffins from sunrise to sunset and so use no solar electricity during the daytime, then based on the example above their annual electricity bills would be:

  • Without a battery system:  $666
  • With a Powerwall 2 and Tesla’s Energy Plan:  $757 in credit

This puts the household $1,423 ahead with the Powerwall 2 and shortens the simple payback time to 5 years — provided it never discharges power to support the grid.  So under the right circumstances a Tesla Powerwall 2 can pay itself off in a very reasonable period.  Unfortunately, no solar electricity consumption and a battery capacity factor of 90% are not reasonable assumptions to make for typical households and the simple payback time is likely to be far longer in reality.

Larger Solar Power Systems

I considered homes with 6.5 kilowatt solar systems above, which is around the most commonly installed size these days.  A larger solar power system could help a Powerwall 2 be used at higher capacity as it would be able to fully charge it more often, but because the Tesla Energy Plan’s feed-in tariff is low compared to what’s available, it would result in lower payment for surplus solar electricity sent into the grid – and large solar systems generally produce a lot of surplus.  As there is both a pro and a con, whether or not the Powerwall 2 deal can pay eventually pay for itself will depend on individual circumstances.

Reduced Backup Power

One drawback of being part of a VPP is when a blackout occurs your battery may have already been drained of energy from supporting the grid, leaving none for back up.  To counter this, you can leave a reserve of 20% of the Powerwall 2’s usable storage capacity ready to supply your home in case of blackouts.  The disadvantage is it will lower its economic return as there will be times when that energy could be used to lower electricity bills but will be reserved and unavailable.

Tesla Fails To Mention Powerwall Installation Cost

With their price cut South Australians can get a Tesla Powerwall 2 installed for a minimum of around $7,100.  Because some extra work is required for most homes it is likely to be more than this.  But on their site Tesla does not give even an approximate amount for the cost of installation.  On this page they mention a price of $3,499 five times, which is the cost of the Powerwall 2 without installation5, But not once do they give even an approximate figure for the cost of installation.  I thought this was against Australian Consumer Law, but after reading the details I guess they have enough wiggle room to stay out of trouble.

Based on what Tesla charges, the lowest possible installed cost will be $7,080 which is more than double the $3,499 figure Tesla gives for just the battery.  I don’t see how trying to keep this secret is going to help.  I expect they’ll lose a lot of sales due to disgust when people find out the installation cost is more than what they have to shell out for the battery system alone.

Insurance Issues

If a Powerwall 2 is only charged by rooftop solar power its warranty will last for 10 years.  But, if it is charged from another energy source, which it will be when used as part of a VPP, then the warranty will only last for the first of 10 years or until 37,800 kilowatt-hours of stored energy is supplied.  This is still likely to last a typical household 10 years, but if the VPP uses the battery to support the grid a great deal it could significantly shorten its warranty.

What I Would Do

If I was using this deal to buy a Tesla Powerwall 2 there are at least two things I’d want to know:

  • Would I receive compensation for energy discharged to support the grid or will there be a limit set on how much will be discharged?
  • How will the warranty be affected by being part of the VPP?

However, I probably wouldn’t use this deal because I like saving money and I don’t see how it will enable my home6 to do so.


  1. Actually, the real Tesla was much more likely to end up with pigeon droppings on his head, but that’s a whole other story.
  2. But if you got your Powerwall as part of someone else’s VPP, I’m sure joining Tesla’s VPP is not on.
  3. Given that households export less solar electricity when they install a battery, I’m surprised they made their feed-in tariff so low compared to the competition.
  4. Finn’s Powerwall 2 appears to have a round trip efficiency of about 85%.
  5. After the $6,000 SA battery subsidy and after the $2,200 price decrease for joining their VPP for 12 months.
  6. Okay, my ex-wife’s home.
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.


  1. Mark Colwell says

    5. Okay, my ex-wife’s home. – Hahahaaaa, great retention of sense of humour 😉

    Ps, great analysis.

  2. The installation costs being charged are just price gouging to the max. The job would normally only take about 2-3hours (i.e. mount the gateway with 4 bolts, slap on some couplers, mount the PW and your done). So how can any installer / electrician be charging $500->$1000/hr in labour? It’s BS!

    • Clearly you haven’t done many of these installs Peter T. The Tesla’s are a minimum 6 hours for 2 people plus there are ancillary costs (like Type A RCDs which need to be swapped in for any circuits you want backed up). Quite often the Tesla is mounted remotely from the switchboard, which can mean a long cable run, and then there is the time to set it up and walk customer through etc, get the paperwork done. Batteries are complicated to install and any electrician charging less than $1500 for this is going backwards.

  3. Good analysis as always Ronald.

    A few minor points (which probably do nothing to change your assessment about the likelihood so saving most people money) :-

    1. To be fair, I recon round trip efficiency might be a little higher than 85% Finn has seen. There was a bunch of people who reported longer term efficiency numbers on a whirlpool forum, and I was surprised how close to 88% most of the figures become over the longer term for most users. If you do it over too short a term the efficiency numbers can be affected 1 way or the other other by as simple things as the state of change when you take the kWh from and to the battery. I would be curious if Finns numbers are as low as 85% over the longer term and suspect they might be a bit better than this, unless he has something wrong or something like very low usage (again, nothing here that would effect the overall thrust of you article).

    2. Be aware that at some share Tesla have changed there warranty a little. Orginally as you say that 10 years only applied if you charged only from solar. But since they they have changed to the wording to include “time based control” which I can also assume might include charging from the grid for “time based control and backup” which became available in software upgrades. Now this wording would seem to preclude VPP usage which would seem to go well beyond “time based control”. But I wonder if Tesla will change the wording again and include its own implementation of VPP as it might have control to keep the usage within the specs it is happy with for a 10 year warranty???.

    3. 1st thing I got curious about when I saw this deal, is how much the VPP might be used, and how they might reward you for this usage. As you say the fine print certainly does not make this clear. Even the paragraph explaining they will not charge you for usage to support the grid is HIGHLY ambiguous. And I have to be suspicious aiming to cover something up???. When I read that wording, I thought that might only apply when they “pre-charge” the battery to fill it up, in preparation for a peak period so THEY have the benefit of a full battery in for a peak time??? But thought it might not apply when they discharge your full battery (from your solar), but then potentially much later you might need to import because VPP used your battery power earlier in the day. I guessed this might mean that ultimately you sell your battery power for 10c export, and then in a lot of cases might need to be buying it back 31.1c which would be a monumentally bad deal for the home owner. But again, the devil is in the detail. I guess the best case it is possible they simply do not charge you for the same amount of power that the VPP takes, which might on the face of it seem reasonable. But even then, that would still be a very bad deal if they don’t also pay you for that discharge, because you would still be having to pay for the efficiency losses + you loose your blackout protection + you are wearing out the battery for very little benefit to you. To make it even harder pill to swallow, no doubt they will be no doubt making windfall profit in these times, so it seems a very bad deal to be not sharing some of that with you. They have not provided the detail, so we all have to guess until they define it better. But I can’t help but feel the deal was worded more to trick you into thinking it was a good deal, and hid the downsides, and the wording certainly lacks objectivity. To me I am suspicious they are trying to put “lipstick on a pig”.

    To me a it looks like there is no chance of regular unsubsidised battery can save any normal person money in Australia at current rates. It is telling that even with significant subsidies it is still a struggle. But to me this is because 1) batteries are too expensive and 2) the gap between the retail prices we pay for power, and the solar FiT is not enough. Thus getting economics for offsetting and shifting solar from export to offsetting later usage seems to be a model that will always fail until batteries are cheaper or there are big changes in the retail gap between import and solar FiT (or more likely a combination of both). To me the thing that could change that it using batteries for what they are good at at, rather than what they are not economic at. ie offsetting much more expensive rates like peak wholesale rates which might be up to $14 / kWh of FCAS services which I think can be even more??? If we can discharge at these times and get financial reward for doing this and providing these services and much higher rates, AND this happens often enough to make a difference, maybe this changes the game. So bring on VPP which presumable have the ability to delivery this. HOWEVER the sad thing for me, is that it appears that with the VPP plans I have seen, it is other parties OTHER than the home owner and tax payers (who pay the majority of the battery price) that looks likely to benefit!!! Seems the VPP what you to pay to install the battery, and still only continue to reap the unprofitable gains, while they get the benefits of reaping the profitable gains for a battery we install and mostly pay for (sure there is a small subsidy from the VPP). To me it seems trickery to encourage a consumer to give that resource away for measly maybe $300 a year, with the lure of cheaper electricity prices which will largely be fairly irrelevant anyway with a battery because of their small usage. To add insult to injury to claim that 10c FiT is “generous” when it looks like those same people can easily get 15.5c – 22c by not going on the plan. And this is forgetting that the tax payer is the real sucker because in SA they are the real looser because they pay the 2nd biggest component of the cost, for the smallest benefit (ie in fact $0 direct benefit). So by the look of it, consumer pays the most of the battery and gets a small benefit, tax payer pays almost as much as the consumer for no benefit, and Tesla discounts their battery by a small price to I assume rake in what I assume is likely to be the biggest benefit in partnership with the retailer (not sure how they share the spoils of this). To me it looks like 1 massive con job and further hype and misinformation about battery economics leaving the householder and tax payer to fund the bill, but be last in line to reap the benefits.

    The really sad thing is just how many people have been conned but don’t even know it because of their “bill reduction” that has come from all sorts of other things and cost justification based on very poor set of assumptions.

    • In the interests of bring balance to my post above. It is worth pointing out that while this and other VPP deals I have see so far to do seem to stack up to the promise, there is some upside I do see that people in SA can potentially exploit. Lot of people could be in the market for a battery for all sorts of reasons other than economics (eg blackout protection). If so, and if the right battery for you is the PW2, then I suspect this deal does present a good deal for practically everyone that can get it. As Ronald points out, get on the deal, and even if you get out straight away, I assume you are in front even after paying for the penalty, so as I see it, no matter what way you cut it you will be in front of buying and PW2 not in this deal. Still might not pay for itself, but it will have cost you less than the alternative.

      Or is there something in the SA subsidy fine print they means you have to be on a VPP?

      • Ronald Brakels says

        Battery systems bought using the SA battery subsidy have to be VPP capable, but there is no requirement they need to be part of a VPP at this time. I suppose they are working on the premise VPPs will be so attractive in the future very few people will not want to join.

    • Further to the post above, another galling thing about the whole VPP deal where I can’t help but feel they are ripping us is when they offer to charge our batteries free when the power is needed to “support the grid”. In a lot of cases, they will even be making money when they do this when the power is not needed later. The reality of the current wholesale electricity market that we have now, is there are times in the grid when there are periods where the wholesale electricity price in the grid is negative. eg it is not uncommon where the wholesale price is actually negative $1 / kWh (yes that is $1000 / MWh for anyone who will use it)!!! Yes, that means if the VPP can suck up power charging your battery, they can get $1 / kWh for doing that. So again, there is plenty of revenue opportunities for VPP. So it is a shame (I assume largely because of battery over hype) the VPP companies have found little reason to share any of that with home owners. After all, if you can put lipstick on a pig and sell it, why would you need to offer 1c more.

    • Ronald Brakels says

      Some good points there, Matthew

  4. Mark Underwood says

    Ronald your reports are great and so too are some of the comments form your contributors, however why is it that there is no mention (from what I have read so far) about the Simply Energy VPP. This makes the PW2 affordable for many S. Australians, My colleague last month had a PW2 installed. The total price he paid was $6999.00 for the battery plus about $7.00 for some extra cable.

    In short the SE plan is: They pay you $7.00 per day, that’s right $7.00 per day for 2 years uo to a total of $5100.00 to be part of the VPP. They include a 15 cent FIT. Yep,`15 cents. You pay 39c per kWh that you import and as has been pointed out with a battery you pay less overall because you import less anyway.

    So in the case of my colleague after the SA HB Scheme rebate of $6000.00, he paid $7006.00 less the forth coming $5100.00 VPP rebate meaning he is out of pocket only $1906.00 for a fully installed Powerwall 2 for his single phase home.

    (I am on 3 phase so my installation “extras” were not $7 they have quoted an extra $1400.00. This in part is because the suppliers are still using the Gateway 1 instead of the more 3 phase friendly Gateway 2 … but that’s a story for another day)

    Note: The Gateway 2, according to my Tesla contact is about $1000 more than the Gateway 1, so find an installer with Gateway 1’s still in stock to keep your purchasing price down. Gateway 1 is fine for single phase. Tesla now only sells Gateway 2 which explains why the battery package is more expensive and is the reason for the majority of their previous price increase.

    The VPP plans and conditions are evolving so even the Simply Energy VPP (SE) plan has changed in the past month. It was $3.49 paid to you each day over 4 years up to the same max amount of $5100.00 with 31 cents per kWh, but has recently changed to the 2 year rebate payback as above.

    This means you can get your $5100.00 in just 2 years then quit the VPP and join any plan you wish.

    I spoke to Tesla about the differences in the SE VPP plan and their own new VPP plan (which is so far off the money I find it hard to understand why Tesla have even considered that it would be embraced ***) and the sales person was not even aware of the SE VPP plan at all. As it appears, no one else is either. The Tesla person was looking at the SE plan for the first time, online, as a result of me telling him about it whilst I was on the phone.

    As we know Free Lunches can be expensive but the SE VPP plan is generous, they can steal only 400 kWh from your battery per year (about the annual consumption of a small to medium fridge/freezer) and yet still pay you the 15 cents for each kW they take as compensation, the same as if you exported it. SE does not care if you have more than 10 kW on your roof either whereas the likes of Origin would drop your FIT from 18c to 10c if you did. (Buy the Whey, Amaysim will only give you 22c FIT if your have 8 kW or less on your roof. so you can’t milk it)

    My calculations suggest my colleague will save around $400 to $500 per year by adding the battery meaning his payback for the $1906 out of pocket is less than 4 years.

    In fact most people who have around 5 to 6 kWs on the roof could only hope to save $400 to $500 by adding a battery so Tesla’s $7K to $8K VPP plan is un-affordable (payback 15 years plus).

    A consideration that may sway some of you in favour of a battery is the almost inevitable TOU (time of use) billing that will occur in SA at some time in the nearer future, when smart meters are a plenty. Expect 59c per kWh peak between 2pm and 8pm, then some really generous off peak prices. The Tesla as with many other home batteries, is smart enough to take advantage of these price increases and perform their best for you. However, it is a bit like the wife saying to her husband “I saved you $100 today because the $300 dress I bought was on sale with a 33% discount” He’s still out of pocket $200. To explain, (ironically) I mean the only way many people will start to save with a battery is if the price per kWh due to TOU increases.

    Caution: If you wait until TOU comes into effect and everyone wants a battery all of a sudden, then market forces typically make supply short and prices higher.

    Inversely, more players could appear,, to capture some of the anticipated market, as it did/does with the solar panel market, to bring prices down.

    But: It will be a long time coming to get a battery installed for only $1906.00 out of pocket, if some or all of the subsidies disappear. ($6000 SA Govt HB Scheme and $5100 SE VPP) totally $11,100.00.

    • Really helpful analysis all round… would be great to have comparison with the AGL VPP deal as well so we can compare apples with oranges or whatever.

      • Mark Underwood says

        Thanks Grant. No fruity comparisons are possible, the VPP’s have more of a Chalkie/Cheesy taste. In other words the Simply Energy VPP is so far in front of Tesla Energy Locals and AGL’s VPP, they “simply” can not be compared and certainly should not be considered.

    • Thanks Mark. I have been searching hi and low to find a circumstance where a typical family really might be able to make a saving on a battery. And this was a plan I was not aware and and does seem to be the best plan I have ever seen and something that one 1st pass might get closer to a payback. So if anyone in Australia is really going to make a saving on a battery, this plan might be it based on what you say and if there are no other caveats and you can get a PW2 installed at the price your friend got it.

      So interested to run the numbers to see what I come up with. Note it sounds like your friend might be in a unique position where they have somehow been able to pick up the PW2 for well below average installation and with the old gateway which has given them a significant saving that I suspect won’t apply to most people?? So I have run the numbers on what I assume is a more realistic set of assumptions?

      Would I be right in assuming not many people will be installed for only $7006 by the time you factor in more typical install costs of $1400 + by the sound of it you will almost certainly be jammed $1000 for the gateway 2, as GW1 not available anymore??
      (As a side issue, even for 3 phase, unless you want multiple PW2 on different phases I can’t see any reason why you would not go with a gateway 1 and save $1000 if you can still get it. The 1st generation gateway does actually supports 3 phase no problems. All I can see that a gateway 2 allows is for Tesla to support you in adding multiple PW2 on different phases so if that is not important to you, I see little to no benefit in the gateway 2).

      Now here is a perfect example of how to get battery economics wrong, and it would be easy to come up with the follow calculations to make this PW2 payback in just under 10 years (based on what you outline, and assume you are going to pay more typical install prices + have to buy the gateway 2 because no-one has the gateway 1) :-
      – I am going to assume it is more likely that the purchase price based on what you are saying might be closer to $9400 ($7000 after SA rebate + 1400 for install + $1000 for gateway 2).
      – $5100 VPP rebate brings that down to $4300.
      – Based on typical utilisation people are getting in real world usage looks to be numbers averaging around 8.3kWh / day from the PW2, which I am going to round down to 8kWh because I am lazy and that is probably a generous estimate once you factor in degradation, backup reserves, the fact that the VPP will take some etc.

      Based on those assumptions, lets look at how long it takes to payback that battery :-
      – Savings per you is amount saved by shifting solar, minus what you loose when they use your battery for the VPP (where I assume you are likey to be loosing money because it is likely you will be selling power to them at 15c, and then you will likely need to buy that back from them later at 39c, so I recon that is probably costing you about $100 per year…..400kWh / year * 39c import – 400kWh * 15c and rounded up to $100 because I am lazy ).

      – if you average 8kWh from the battery from your own usage, then that is a yearly saving of 365 * 8kWh * (39c – forgone solar FIT) = 365 * 8kWh * (39c – 15c / 0.88 for efficiency losses) = $641 / per year.

      So looks like $641 – $100 = $541 saving per year, which looks like we have some chance of payback of $4300 before the warranty runs out in 10 years (8 years by my calculations). This is not great ROI, but it is at least some chance of returning your money, and probably much better than anything else I have seen. So well done pointing that out.

      EXCEPT unfortunately there is a bit of a logical gap in the above argument that is a common mistake often found in peoples economic justification of batteries. And that is just like your wife “saving $100 by buying a $300 dress”. You should not be counting savings from an expensive electricity plan that you are only on because you brought the battery and has rates that are not competitive. From an article Finn did recently, it sounds like in SA it should be easy to get a tariff of 36c and 16c FiT. And that is what we should compare to if we are to know what the actual likely savings on our bill are likely to be (comparing no battery to battery). This looks like :-

      – if you average 8kWh from the battery from your own usage, then that is a yearly saving of 365 * 8kWh * (36c – forgone solar FIT) = 365 * 8kWh * (36c – 16c / 0.88 for efficiency losses) = $520 / per year.

      So looks like $520 – $100 = $420 saving per year, which unfortunately puts us back payback looking more likely to be taking the whole 10 years which to me seems a petty ordinary ROI for a risky investment requiring up front payment (but a payback none the less which is a significant milestone).

      Now of course, if you have a large solar system and high usage with the exact right usage patterns, some people might get a little more savings than this because of higher utilisation of the battery. But I suspect the higher usage tariffs might hurt you more for the power you import than the benefit of the extra battery utilisation. But a lot of people will not even have the usage to do even this well, and their mileage will be less. And of course, if you are in the lucky position to get a PW2 with practically no installation charge, or save by getting on old gateway or or other deal that reduces the price to $2K, then now you are definitely in the territory to where I suspect most people can save money and get a reasonable return. But that sounds like it might be a corner case. Even then I still feel sorry for the tax payer who bears the biggest burden of the subsidy without any immediate benefit (though I assume there will be a benefit down the track for everyone in pre building the infrastructure needed in the future to make the RE transition if we assume our politicians did this for sensible reasons).

      And of course, if you want a PW2 anyway, I suspect this might be a very good deal, especially if you leave after 2 years if they don’t offer you something more attractive.

      Anyway, it is all too common, that even with LARGE subsidies, and deal that look good at 1st pass, can quickly evaporate once you get to the devil in the detail.

  5. Melanie Leslie says

    But Amaysim is not available in SA or at least that’s what the website says. Best feet in tariff I can find is AGL at 14.2 . Energy locals are at 16c but the monthly subscription on top of daily charge makes it expensive.

    • Ronald Brakels says

      Yes, that is weird. Amaysim is available in SA but their site is defective. I’ve told them this once, so I’ll tell them again and see if they fix it this time.

    • Mark Underwood says

      Thanks Melanie Amaysim is available in SA but as I understand not with gas as well. And as Ronald suggests, their site is their biggest enemy … very difficult to find the correct information.I gave in and rang them, and received the answers I was looking for straight away.

  6. Lawrence Coomber says

    Thanks Ron you have prepared a thorough analysis as always.

    But of course the devil is in the detail, and in this case your projected outcomes are predicated on today’s prices remaining static in your system ROI calculations.

    If you create a trend line in Excel of power price increase looking back 15 years from today (2004 – 2019) then project that line (4th order polynomial would be the good choice) through to 15 years hence (2034) and there is no logical argument around to suggest it won’t be at least this; then your calculations look overly optimistic.

    Lawrence Coomber

  7. Mark Underwood says


    Thanks Matthew. I’ll try and address some or most of your questions in brief, mainly because I am not a bloggy type person so this is somewhat foreign to me. It’s just that my colleague had sent me the link to some of Ronald’s posts and I thought that I had really better contribute since everyone seems to have the best interests and a portion of hope as well, that batteries will be affordable with a suitable ROI.

    Fact: they are.
    I meant to title my original contribution in bold with just that. However, they are only affordable with the massive SA Govt and SImply Energy VPP plans in SA. I was just so surprised that nobody had mentioned this particular VPP plan.

    Firstly, you can get a PW2 installed for around $7K.

    ERS (Sharpe) were selling them for that price in July and my colleague’s and mine (his already installed) are from another provider found on the Simply Energy site. They were $6999 which also includes installation give or take extra work that may or may not need to be done. Again, my colleague needed only to pay and extra $7. His install price of $7006 included the Type A RCD’s. The fully installed price is the cost of hardware, (the Powerwall 2 and the Gateway 1) and includes the technician’s (contractors) installation fee which is probably around $1500. You will only pay more than $7K if your particular installation requires it.

    Why are the Powerwalls sometimes so cheap from various providers?
    Inside knowledge, although pretty obvious. It seems that almost everyone miscalculated the amount of sales (lack of) for batteries after the SA Govt HB Scheme was announced. Many providers had signed up to significant quantities of batteries, (one provider told me they had signed up to 220 PW’s this year) and if they don’t sell their existing stock they can’t pay for the incoming stock for the next quarter..

    Is there a valid ROI?. Yes.
    This is not a criticism of others but it pays to make calculations based on actual usage as opposed to assumptions wherever possible. I have been recording information daily for nearly 4 years from my solar system. (except in rare cases when I have been away for a few days … then I average)

    A simple spread sheet gives you the answer.

    Record/collate the solar generation for your panels for a year (or hopefully grab it from the inverter WiFi data) Check your bills and total the imported kWh’s. Same with the amount exported. Although important, knowing your actual consumption (Import plus the balance between Generation and Export) is not critical in the calculation at this time. Neither is the daily supply charge. You are really only interested in reducing (or eliminating) your import costs. That’s all a battery will do anyway.

    The import amount is firstly significant. I state the obvious but if you paid for 6000 kWh’s in the year then when you add a battery you will no longer be paying for that amount. If you know your generation and it was 8000 kW (average around 22 kW per day for a 5 to 6 kW solar system), and you know that for around 305 days a year you will be able to wholly or at least very reasonably charge the battery. (As a result of my painful 4 year daily records, I have identified 45 to 60 days per year when you will not be able to fully charge a 13.5 kWh battery due to cloud cover etc.)

    To be even more accurate, use Ronald’s analysis that it takes 1.2 kW to store 1 kW in the battery due to loss. You can soon calculate with a spreadsheet how much you can reduce the 6000 kW’s you previously imported. My information suggests that above case would pump around 10 kW into the battery on average, per day, but using your (Matthew’s) example of 8 kW per day that would be 2920 kW’s no longer imported. Lets say 3000 kWs. Therefore you would only pay for 3K with a battery. So you would save 3000 x 39 cents (add any amount into the spreadsheet so that it suits your current energy plan)

    3000 x .39 = $1170.00 less 3000 x 15 cents FIT ( $450) that you would have got for that which found it’s way into the battery that would otherwise have been exported.

    $1170 less $450 is $750. Allow for loss and the VPP stealing 400 kW’s per year and you will arrive at $400 to $500 annual saving. This was also Mathew’s conclusion.

    A 4 year payback with an out of pocket amount of around $1900. Remember that the $1900 is not speculation it is a real life installed example based on $13000 for the Tesla less $6000 SA Govt HBS and $5100 SE VPP 2 year rebate.

    Powerwalls are very very smart. They can save you in many ways. Not just the way they learn your usage activity, or future Time Of Use monitoring, but also if for example, you are running 3 kW worth of appliances during daytime and your panels due to cloud, were only generating 1 kW at that time then the battery would supply the difference, and you have the afternoon of day light with hopefully less cloud to charge up again. So the battery doesn’t just get used at night.

    In the case of 3 phase with a Gateway 1, they can actually take power from the grid on a phase that does not have the Powerwall on it and then get the battery to export the same amount back to the grid with $0 paid. Hard to get ones head around, I know. But it’s true.

    Gateway 1 or 2?.
    2 is way smarter than 1 and although probably not worth the extra $1000 it is preferred. For 3 phase it is a must. The reason why my installation quote was and extra $1400 (instead of just $7 for my colleague on single phase) was because that is what it costs to make a G1 work with 3 phase. It will work great but they need to convert it to work on 3 phase and it costs extra to move your chosen circuits over to the phase that the PW will be on for back up (power outage) purposes.

    I raised that with my supplier today and said if that’s the case how much does it cost to get a G2 instead. I assumed that since the G2 is more 3 phase friendly it will save heaps on much of the the no longer required conversion, and therefore shouldn’t be too many $$$ more. I was right, in fact today they think it will be less than the $1400 extra quoted and yet now includes the G2.(remember according to my conversation direct with Tesla, the G2 is $1000 more than the G1) I was satisfied. For less than the same money I am getting a superior gateway. So I am expecting just a tad over $8000 fully installed with a shiny new Gateway 2.

    Matthew wrote: ” I am going to assume it is more likely that the purchase price based on what you are saying might be closer to $9400 ($7000 after SA rebate + 1400 for install + $1000 for gateway 2).”

    Nope: not $10,400, with G2. just around $8000

    In other words as I found out today, a G1 plus conversion to work with 3 phase actually costs more than installing a G2 in it’s place.

    Matthew wrote: “Anyway, it is all too common, that even with LARGE subsidies, and deal that look good at 1st pass, can quickly evaporate once you get to the devil in the detail.”

    Not so.
    Single phase with Gateway 1 is $1900 plus maybe some extras, around 4 years payback. OR,
    3 phase with Gateway 2 is around $8000 plus maybe some extras, around 3.64 years payback (well in my case anyway because I am soon to have 15 kW on the roof).

    Exiting a VPP after the 2 years rebate has been completed and chasing a better plan with a better FIT (if still available in 2 years that is) will provide a quicker return.

    I would expect that VPP’s would offer serious incentives to customers to stick with the program in the near future.

    The formula.
    Don’t pay more than $7K for the battery after the SA Govt subsidy, join the SE VPP, get as many panels as you can afford and change plans after 2 years.

    • No doubt if you can get PW2 install for $7K after SA subsidy, and the VPP will offer you $5K, and thus get the price down to effectively $2K out of your pocket, then is is NO DOUBT going to make it much easy to recoup that over a reasonable number of years. Depending on usage, and on the prices outline above, I would expect typical savings for people to be somewhere in the range $200 – $500 of real savings a year depending on usage (some people don’t use enough power outside solar hours) based on numbers outlined. So at the top end it is certainly an attractive looking ROI, and on the bottom end you are still likely to at least get the money returned. But you also have some blackout protection + helping with the development of the grid and services of the future, and have some cool new tech.

      So at those prices, there is no doubt I recon for a lot of people including me it is a pretty attractive offer. But beware of the “extras” that comes later in the sales/install process that might rapidly erode that. If you $2k battery suddenly becomes $4k after paying the gateway and install charges, then it rapidly becomes more marginal. Beware of the “quote” which you calculate at $2k, and then becomes $3k because of needing to upgrade you to G2, and then the “mateeee….install on the day was more difficult than we thought, so we are going to need to charge you extra $1500 for install which they would have know about if they had quoted you properly. Suddenly your $2k PW gets closer to the $5k and harder to get that return.

      As a side issue the whole “G1 plus conversion to work with 3 phase” that sounds a bit suspicious that someone is [email protected]#$%ing you, unless Tesla have made changes to the G1 since they released the G2 which is unlikely???? Certainly there was no conversion required for a G1 in the past for 3 phase. You did need a couple of extra CT clamps, and a little extra wiring to the gateway to support that, but the G2 is no different in this regard. As for moving circuits to connect to the one you want to backup, I can’t see any reason there would be any difference between the G1 and G2. Further to that, I am not aware of any extra “smarts” that the G2 has that the G1 can’t do (except for allowing you officially support multiple PW2 on DIFFERENT phases). You could always have multiple PW2, they just needed to be on the same phase (if distributor rules allowed it which they often didn’t so for me the G2 is more about allowing Tesla to sell and install more PW2, so it is galling that they now want to charge us considerably more for that and I suspect that this is just cover to effectively raise the battery price in an environment when the batteries are getting cheaper). G1 and G2 both support being able to net usage to zero across 3 phases. Again, there are bucket loads of people out there being installed for a couple of years with G1 and 3 phase and no issues.

      3 phase installs are likely to be slightly more expensive, as you now have a few more cables to install to get the voltage from the other 2 phases, and extra CT clamps for the other 2 phases. But this is EXACTLY the same for G1 and G2. But I suspect they are confusing some of these things with the pros and cons of G1 vs G2.

      As I understand it the only advantage of G2 is :-
      – it does now support multiple PW2 on multiple phases which G1 did not (still blackout protection only on 1 phase, so in blackout the extra PW2 on these phases and the solar on them will be sitting idle doing nothing).

      – prettier box.

      – the changed the energy monitor from a 3rd party sourced one, to their own. There has been speculation that might be a little more powerful. What this means to an end user is a little unknown as there does not seem to be any additional functionality (except what I outline above). But I speculate that maybe it samples more frequently and so is a little better and always keeping supply and demand matched to reduce the little phantom imports and exports that will always be happening (it is not uncommon for people to see about half a kWh a day were they think in theory the PW2 should have covered it). PW2 will always be lagging slightly as it can only respond to changes. But the fast you can do it, the better the supply/demand match.

      Beyond what is outline above, I am not aware of any extra “smarts” of the G2. But if anyone has any documentation to show what I am missing, I would love to be educated.

      But if you can get PW2 installed for $2k after the rebates or even $3k to cover 3 phase, I recon I would be grabbing it before that disappears. But be careful of price creep and make sure you have a solid “fixed price” quote.

      Your “formula” advice to me looks spot on to me.

  8. I think your 100% right about Tesla alienating their customers by not mentioning the instal costs. Another sign that the powerwall is not there economically yet and why I will be buying my own lithium batteries and installing them myself or paying a few hundred for someone to help me.

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