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As most people have worked out, solar batteries currently make little financial sense. However, since the announcement of a $3000 rebate through the QLD Government Solar Battery rebate, the interest has skyrocketed. A lot of people are under the impression that, with the help of the solar battery rebate, now is the time to install Solar batteries in QLD – this post aims to show it is not.

QLD Government Solar Battery Rebate Incentive

The QLD Government Solar Battery Rebate

To be eligible to receive the QLD Government Battery rebate, you need to utilise an Approved Solar Retailer who is participating in the scheme. Those in the industry knew the interest would be large, so many jumped on board and applied to become Approved Solar Retailers. This allowed them to take advantage of this heightened interest. From 2013 to December 2017 there were 48 signatories around the country – a very select bunch. From January 2018 alone, there have been an additional 84 signatories. So, that means it took five years to get 48 signatories, but just one year to get 84. This exponential growth in approved retailers has been great for raising the bar in the industry.

We were the 24th company to sign the code, falling somewhere in the middle of early interest. However, we’ve chosen not to participate in the solar battery rebate because it’s still not in the best financial interest of the average Joe. Although the idea of promoting batteries is good for the grid, the payback period, unfortunately, is not.

The Value of Battery Storage

The concept of batteries is simple. Any power you generate in the day and don’t use (excess power), is stored in a solar battery. At night, when solar generation has stopped, the battery kicks in to provide the household with that “free” excess power. Most people mistakenly value this excess power as the rate they pay their electricity retailer. However, we need to remember that this excess power could have been sent back to the grid for a feed-in credit. Therefore, the actual value of this excess power stored in a battery is the electricity rate (or T11) minus the feed-in tariff.

Retailer Solar Batteries Savings Comparison

The table to the left shows five of QLD’s more common electricity retailers. The first column is their T11 rate; the second is their feed-in tariff. The third column calculates the difference between these figures, which ends up equaling the value of this “excess power.” This figure helps us determine the value of solar batteries. When we average out these rates, we see that every kWh used from the battery is worth $0.128, not $0.273.

 

 

Payback Periods

Now we have the average savings per kW a battery can provide.  Let’s see how that stacks up for payback periods. We’ll use two common examples of solar batteries in today’s marketplace. The 13.5kW Tesla Powerwall, and the 4.8kW Samsung.

Samsung Solar Battery

Tesla Powerwall

 

 

 

 

 

 

 

 

Tesla Powerwall

Tesla Powerwall Solar Batteries PaybackLet’s assume the best case scenario – no rainy days for the entire year, the Tesla Powerwall can charge its full 13.5kW storage capacity, AND the household uses every ounce of it each night. We, therefore, multiply 13.5 by $0.128 to get our savings per day, then project this to a year. Now we divide it from its conservative $12 500 price tag to get the payback period. As you can see from the table, our best case scenario for full price is a 19.82-year payback. Even accounting for the $3000 solar battery rebate, we’re still at 15 years, five years past the Powerwall’s ten year warranty period.

Samsung Solar Battery

Samsung Solar Batteries Payback

Let’s apply the same best case scenario to the smaller Samsung Battery. Multiply its 4.8kW capacity by $0.128 to get our savings per day. Project to a year, and divide this from its $6000 price tag. The results are a bit funny. Without the solar battery rebate we get an excessive 26-year time frame, but with the rebate, the time frame is just over 13 years. Although better results than the Tesla Powerwall, we’re still three years past the Samsung’s ten year warranty period. The Samsung has the additional disadvantage of only offering a 3kW continuous discharge, so heavy night usage may not be covered.

We also have to remember these are the best case scenarios. Rain is going to affect these calculations, as are holidays, heavy daytime usage and periods of system downtime. Solar Batteries also degrade over time, so both the Powerwall and Samsung will not be storing their full capacity five years down the track. For these reasons, we would need to see payback periods significantly under their ten year warranty periods before we would consider them as a financial investment.

Blended Payback Trickery

But if we have all these new approved retailers, surely the right battery can make financial sense, right? I’d suggest whoever is pushing batteries as a financial saving, is most likely using a “Blended Payback Period.” Ronald from SolarQuotes explains it better than I could in his blog below:

To summarise Ronald, solar pays for itself; batteries do not. Although the Solar + Battery combination pays for itself within eight years, the solar will be contributing heavily to this payback. The battery may be sitting at 15 years to pay off, while the solar is at 3.

For this reason, it makes far more sense to forgo the battery and proceed with just the solar installation. If you see these combined payback period tactics, I would always recommend asking your consultant to separate the battery from the solar. This way, you can perform your own calculations to see where the true savings lie.

When Do Solar Batteries Make Sense?

A cheeky answer I was tempted to write was “in the future”. But there honestly are some cases that exist in the present.

  • Consistent grid outages can make solar batteries a viable solution. As the solar was unable to be exported anyway, the savings value is actually the retailer T11 rate. This means every kWh used by the solar battery is worth $0.273 as opposed to $0.128. However, even substituting $0.27 as the figure for whole value, we’re still around 10 years for payback.
  • It’s nice being able to maintain normal power usage while the rest of the street may be in darkness. This is something solar batteries offer. I would argue this is the main if not the only reason to install a battery. Financials aside, the price of keeping your household powered up might be more valuable to you than payback periods.
  • While Solar Batteries lessen your dependence on fossil fuels, switching to solar has a far better impact on the environment than batteries.

Closing Thoughts

The concept of the solar battery rebate is good for the grid, but they pose little financial advantages for the customer. We have elected to stay out of the QLD Government Solar Battery Rebate Scheme. Although the idea and selection criteria set by the QLD Government is robust, unfortunately, the battery payback period doesn’t align for the customer. There may be others pushing for batteries as having high returns, but they could be using blended payback periods. Because solar panels are the superior financial incentive, it makes sense to first consider more solar panels over a solar battery. Remember – you can always add a battery later when the numbers do stack up. There’s no need to rush into it now just because there’s a solar battery rebate.

Ben Neville

MC Electrical

Technical Sales Manager

13 Comments on The Qld Solar Battery Rebate – Are Batteries Worth It Now?

Nigel Morris said : Guest Report 3 weeks ago

Excellent analysis guys. I agree batteries are a marginal investment at best and that the bulk of the savings are going to come from the solar. Having said that, I do think there is a market for people who aren't focused exclusively on the economics and might want to go ahead anyway.

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Ben Neville said : administrator Report 3 weeks ago

Thanks Peter. AGL used to offer 10.6c, but they recently announced their 20c FiT offer.

Peter said : Guest Report 3 weeks ago

There is a mistake on the feed in tariff table AGL feed in tariff is 10c/kwh keep up the good work Peter

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Leon Frisch said : Guest Report 3 weeks ago

Excellent post. As someone who works in the solar industry I completely agree. It may pay to also note that there is an additional "unreliability Factor" with Hybrid battery systems. Similar to Optimizer type systems. People who purchase them add a level of unreliability to their solar and given the data from the ACT battery test centre showing cycle life way below what "the marketing hype suggests". This should also be considered. In my opinion. If you want batteries thats awesome. I have them on my house. But do it for the right reasons, like wanting a carbon free house, or telling Ergon to stick it... ot perhaps a great desire to be cool and tell your friends.. Not because you believe it's the best ROI or have been fooled by a flashy sales pitch.

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Howard said : Guest Report 3 weeks ago

It would great if someone with requisite knowledge and skills could compare the cost of the battery system in the Tesla 3 and the Powerwall 2. I suspect batteries in home ESS systems are several more expensive than the the Kw cost in EVs. The Tesla Powerwall 2 may need to be about its current cost to be financially worthwhile. Perhaps blockchain type technology will make large scale distributed systems more practical in few years time but who knows with advent of EVs?

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Ben Neville said : administrator Report 3 weeks ago

Thanks Greg. Your last sentence is very important, and often overlooked - even by people within the industry. I see far too many marketing posts "save money with a battery installation," so it's important people understand this statement is more than likely not true.

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Ben Neville said : administrator Report 3 weeks ago

Thanks for the feedback Keiran. Like you say even without taking additional detrimental factors into account the financials for batteries don't work, so we won't worry about them yet. I also prefer SA's policy idea as it's still important to get the "battery ball" rolling.

Greg said : Guest Report 3 weeks ago

Hi Mark, I re-ran your calcs using a 10kwH battery as an example, and I quickly realised the savings are always $1.28/day (0.128 * 10) = $467/yr. It's important to understand usage patterns which are generally > 60% usage at night (I'm in Melbourne, so even more here). This means that you will almost always fully charge your battery before you start exporting to the grid. Only with a large battery does the battery efficiency drop, so the figures you've generated will almost always be valid, especially for the Samsung case. The difference between feed-in tariff and cost/kwH is what makes the difference.

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Keiran said : Guest Report 3 weeks ago

Ah, I had noticed that you guys were on the approved list for solar suppliers but not battery suppliers (I was looking for you because I always enjoy reading the blog). I really enjoyed this article Ben – like some of the other comments and you have pointed out, it doesn’t take into account things like battery efficiency, degradation, future prices, etc., but it shows that the economics aren’t even really close enough yet to worry. Personally, I much preferred the policy idea from SA – to pay for the entire installation of solar and batteries on public housing and low income properties, then allow a retailer to aggregate the batteries and get additional benefits from them.

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Ben Neville said : administrator Report 3 weeks ago

Thanks Robert! Good point, and there's many other considerations to make. We figured if even in the best case scenario batteries don't make financial sense, then that's a solid story to tell.

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Robert biviano said : Guest Report 3 weeks ago

Great article as usual. Agree with everything, but would also add that the conversion process from DC to AC is not 100% efficient and so the payback is even worse i.e. that 13.5 Kwh of stored DC energy could mean as little as 12 kwh of AC energy

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Ben Neville said : administrator Report 3 weeks ago

Hi David, No I haven't taken future electricity prices into account, or future Feed In Tariffs, which also impact payback periods. However, I haven't taken battery degradation into account either, which negates any price increases. Also to remember; if electricity prices fall or feed in tariffs increase, the payback projections for batteries could end up being worse. Time also has the opportunity to bring about better battery technology and better prices, so there's no harm in waiting.

David said : Guest Report 3 weeks ago

What about the price of electricity in the next say 5 years, has that been taken into account?

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