The Qld government has announced a solar battery rebate and no interest loans for solar. The solar battery rebate and interest-free finance scheme, announced late last year, will be available in early 2018, according to the Queensland Government website. This post will first take a critical look at the scheme and show why a solar battery rebate is a fundamentally idiotic policy. Next, I’ll explain why you may want to take advantage of this stupid policy – and I’ll give tips on what to look for and how to proceed with caution.
Battery rebates – what could possibly go wrong? It was only a decade ago when the federal government ran another scheme that saw a sudden and dramatic increase in a home improvement industry. Let’s look back and leaarn from reecnt history.
Back in 2008 and early 2009, Australia (along with many other countries) was staring down the barrel of the global financial crisis. Economies were in downturn, there was much talk about a loss of jobs and a general hysteria about life as we know it coming to an end. The Government of the day used a stimulus package to avoid a recession, with the aim of fending off mass unemployment and dwindling consumer spending.
One of the now-infamous measures taken by the Rudd Government was to introduce the EEHP or Energy Efficient Homes Package. And for obvious reasons, the government targeted household spending and more specifically, energy costs. During the same period, solar was beginning to take off and the consumer market was becoming fed up with rising energy prices. Part of the EEHP was the Home Insulation Program (HIP). $2.8 billion was allocated to the HIP, which would run over 2.5 years, and offer rebates to households who had insulation installed. As you’d all remember, the scheme was an unmitigated disaster which resulted in the deaths of four people and hundreds of house fires. Finally, the program was called to an early close.
The program was designed to create an overnight surge in consumer investment in rooftop insulation; which it did with spectacular success. Almost overnight, 10,000 installation companies sprang up and over 180,000 installations were completed within a month. However, the profiteering from less-than-scrupulous operators meant that there were thousands of barely-qualified workers out in the field, installing batts, working around live electrical cables and doing shoddy work. In fact, later reports discovered that over one-third of the entire installations were flawed.
The royal commission which resulted found that the blame for the disaster lay with the government’s program and that the four deaths and many fires that resulted could have been prevented, had the scheme been properly developed, regulated and implemented. Unsurprisingly, many of the jobs created during the scheme quickly vaporised upon its cessation.
History repeats itself
The Queensland government’s latest idea will see a $21 billion investment to offer interest-free loans to consumers and rebates of between $1,200 and $2,000 for each household. The program appears to target low-income households by offsetting the cost of rooftop solar and battery systems, and thus encourage rapid uptake, particularly of energy storage. While there is limited detail of the policy available, there is fear within the solar industry that the government will fail to develop a well-thought-out plan, one with the necessary consideration to protect the consumer from industry cowboys, shoddy workmanship and artificial industry stimulus.
The insulation industry suffered greatly after the 2009-10 disaster and is still recovering. Industry revenue dropped from over $940 million to around $750 million by 2013-14, and many of the larger, more established firms, have been left to bear the brunt. Compensation payouts alone ran into the millions. The costs of the scheme’s failure are almost incalculable.
Implementing schemes such as the HIP encourages unqualified, inexperienced and unscrupulous operators to enter the market. Undertrained staff could once again lead to unnecessary deaths and shoddy workmanship, putting homes at risk. We don’t need this in the Solar industry.
To be clear and fair, Mark Bailey has championed renewables in Qld for a long time. He is acutely aware that Solar battery storage is the way of the future. It is the inevitable next wave of the solar industry. Here’s why.
How solar batteries work
Without batteries, the solar power your system generates is fed directly into your home. While the sun shines, you can power your home’s appliances, and other powered devices, without relying on the grid for electricity. If you’re generating any excess solar power, this is fed back to the grid in return for a credit on your power bill (now up to 16c/kWh in QLD). Once the sun sets, or you experience a few cloudy days, however, you will be purchasing your power directly from the energy retailers. This is where solar batteries come in.
Solar batteries store excess power for use at a later time (at night, for example). All going well, this means that you’ll be buying less power from the grid, and saving more on electricity bills. It also means that you’re not feeding your excess solar power back into the grid for a return, though. In theory, solar batteries are a great way to make the most of your solar.
We just need to take this one step at a time.
Batteries: we’ve still got issues
We’ve installed and reviewed the best (and worst) solar batteries on the market and the verdict is in: they still need work. Even the three best batteries on the market, Tesla Powerwall, as well as LG and Fronius’ batteries, are far from perfect. Don’t get me wrong, these are fantastic products but experienced installers are having teething issues. We’ve also seen products enter the market which were later pulled, like the GCL battery. This product, in particular, looked too good to be true, at under half the cost of Tesla’s equivalent (GCL were quoting an install price of $4500 for a 5.6kWh battery). It turns out that this was the case, and due to not performing as expected , the product was pulled from market.
Until we have more advanced and reliable batteries, implementing a scheme to boost their installations just doesn’t make sense. At best, there will be thousands of unsatisfied customers, who’s investment isn’t paying off in the way they’d hoped. And at worst, we’ll see a repeat of the pink batts disaster if the scheme is not properly regulated. The solar battery market is simply not ready for such a scheme and it runs the risk of damaging the whole industry.
The solar battery industry needs time to develop
Creating an artificial demand for solar batteries will do the industry no favours. As we saw with the HIP debacle, industry stimulus encourages cowboys looking for a quick buck to start installing something they’re barely qualified to do. The costs to the industry, once the stimulus fails, pushes key players out of the market and damages the industry. Australia’s solar industry needs the time to develop naturally – not to mention, the time to develop better batteries and related products that are safe, reliable and do what they are supposed to do.
Solar is already a great investment
With energy bills expected to rise to an average of $1,500 per household this year, the benefits of switching to solar are already significant. Also, with a range of solar system sizes and repayment options available from installers, solar is more affordable than ever. Households can benefit from reductions in their electricity bills even without the installation of a battery, and the various smart devices on the market make it easy to manage and control your power usage, to make the most out of your solar investment.
If you already have solar and are thinking about batteries, make sure it’s for the right reasons. If you’re chasing ROI, batteries probably aren’t for you (yet). As mentioned in one of my earlier blogs, batteries are not about getting a return on your investment – but not everything in life is. In most cases batteries will take 8 to 12 years to generate a return, however having a battery connected to your solar system will allow you to:
- Have power in a blackout – which is a cool feature when that happens.
- Stick it to the electricity companies by being energy independent and in control.
- Be part of the energy revolution (and proud of it).
Take advantage, but do so with caution
Despite the obvious problems with the Government’s new scheme, it’s already on its way. What is important now is to take the time to find a reputable company to perform a quality solar installation that is correctly sized to meet your load profile, financial expectations and avoid the cowboys at all costs.
More so than ever, solar battery storage is not a job for a sales company who will flog off a product and leave it for a subcontractor to figure out. Find a reputable installer with runs on the board, who has been testing batteries and taking a cautious approach to installing them in homes. As of the time of writing, I would suggest only three batteries worth considering:
- Tesla Powerwall
- LG Chem
Ideally couple it with one of three inverters
If you are in Queensland’s south-east, contact us for a consultation.
While solar power is a fantastic investment for Australian households, battery storage is yet to be viable for most. With technology cost still having a long way to fall and long ROIs – not to mention the teething issues– solar battery technology needs more time to develop. An artificial stimulus for the industry could result in disaster, just as it did for the rooftop batts industry. If you’re thinking of investing in solar, there are already great government incentives to do so. Find a reputable installer, and make the most of solar with a system that suits your household’s needs. With the introduction of this new government incentive, it will be more important than ever to be on the lookout for dodgy operators and dodgy products.