Home battery incentives are taking off: What it means for you and the pilot
The Federal Government’s Cheaper Home Batteries program has kicked off and is going gangbusters, with over 35,000 home batteries already installed. The program offers a 30% subsidy for households and businesses to connect to a home battery. Even better is this federal rebate can be used in combination with a new NSW home battery rebate of up to $1500 when joining a virtual power plant (VPP). So, if you weren’t already thinking about getting a battery, you might be now.
Neither of these rebates existed when we designed the Electrify 2515 Community Pilot subsidy structure. Considering the generous government subsidies now on the table, it has been decided to remove the additional 2515 pilot battery subsidy, freeing up more places for homes with gas appliances to make the switch.
Thirroul local Stephen Young has been reaping the benefits of a home battery for years.
Why remove the battery subsidy from the pilot?
The main reason to include batteries in the pilot was to understand householder decisions when purchasing a battery and monitor the impact of these on the grid. For the majority of participants, the new federal and state incentives are worth more than what was offered through the pilot, and we couldn’t justify stacking another one on top. We are also confident these government incentives will see enough batteries installed for us to reach our original intended research outcomes.
Can I still get a battery as part of the pilot?
You can, but batteries will no longer be subsidised under the pilot. If you would like to streamline the process and get a battery along with your other appliances in the pilot, we can definitely help with that. If you want to get your battery now, go ahead! There are so many models on the market now, we encourage you to do your research and get a couple of quotes to compare the options.
Update your pilot application
If you decide to go ahead and organise your own battery and no longer wish to be part of the pilot, we totally understand. Please drop us a line so we can update your application.
You may still want to be part of the pilot by installing a smart energy device. These smart energy devices are fully subsidised, help monitor your energy use, and allow you to contribute to critical research. Again, please let us know so we can update your application.
Should I get a battery?
Having more batteries in the energy system is great for household electricity bills, and great for the climate as more households can take advantage of cheaper, cleaner, locally-produced energy. According to the Smart Energy Council, the recent surge in electrification from plugging in a battery means households alone can drive a further 3.4% cut in greenhouse gas emissions across Australia to 2035 (including a 10% cut in electricity emissions).
But most of us also want to know- will it save me money? To work this out is complicated, but these are the things you should take into account.
How much spare solar do you have throughout the year to charge a battery?
How much electricity do you use after sundown?
You can work this out yourself manually using your bills, or try using a calculator like this one on SolarQuotes.
In NSW, there’s additional incentives available for signing your battery up to a virtual power plant (VPP).
From July 1, the NSW VPP incentive has been bumped up to as much as $1,500 as a one-off payment. The incentive will depend on the size of your battery but according to the NSW government website, it’s going to be around $550 for a 10kw/h battery and $1,500 for a 27 kWh battery. That means lots of people have another question - what’s a VPP? And should I join one?
What’s a virtual power plant (VPP)? And should I join one?
A Virtual Power Plant (VPP) is a coordinated group of home energy devices - like solar panels, batteries, and even hot water systems - that can be managed to supply extra energy to the grid during peak demand times, or help the grid remain stable. For example, if some powerlines go down during a storm and cause the grid voltage to drop, your VPP (if you’re in one) might send rapid instructions to your battery to send extra energy to the grid to help avoid triggering a blackout in the area (and get paid to do so).
The NSW VPP incentive currently applies to seven VPP offers, listed here.
By default, without a VPP, a battery saves you money in a pretty simple way: it charges up from your solar panels when they’re generating energy instead of letting it flow back to the grid. Later on, when there’s no solar, the battery discharges to power your house, avoiding the costs you would have paid to buy that energy from the grid.
A VPP makes more use of your battery. It lets you earn money by selling your battery’s stored energy back to the grid as well as quickly responding to stabilise the grid. It means using more energy that’s stored locally and close to your neighbours, and can help avoid the need to build extra poles and wires for peak demands. Supporting the grid during peak demand also means less reliance on gas and coal-fired electricity.
“Australia is at the beginning of a home battery boom. Together, these household batteries are replacing the need for costly gas peaking plants—with zero of the emissions and with the profits going to householders instead of energy companies. With nearly 40,000 batteries installed in just 60 days, we’ve already built the equivalent of a mid-sized gas power station.”
The financial returns on a VPP can vary. Different providers offer varying incentives and plans that apply to the energy you send back to the grid. For example, many of them offer a reward amount for energy exported during the evening period, or other ‘VPP events’. Your VPP provider will take on more of the risk - but they’ll also take their share of the earnings.
It’s also worth considering that if your VPP operator also owns coal-fired power stations (ahem, AGL and Origin), as they might not be as financially interested in selling your energy against their own generators.
We think of your options like this:
Not signed up to VPP? This is like keeping your money under the mattress. It’s all yours. You’ll still save money on the energy you store from your solar panels and use later.
Sign up to a conventional VPP offer? This is a bit like putting your money in a high-interest savings account or a term deposit - it’s a great way to add a low-risk extra return on your battery purchase. But different providers will offer you different returns, and different levels of control if you want to change your mind - and in many cases you don’t have much control at all. Plus, it’s worth reading the fine print about introductory bonuses and conditions, because there are good VPPs and bad ones.
Sign up to a wholesale energy plan like Amber? This is like putting your money in the share market. You’ve still got full control if you want, and based on the historical average long-term returns you’re more likely to make more money, but it will go up and down every day, so you have to be comfortable with some risk.
We want to highlight two VPPs that are a bit different to the others.
Amber Electric
Amber Electric offers an energy plan based on the live, variable price of electricity, plus a flat monthly fee. This is pretty different to traditional plans with fixed rates and set time windows. They also offer software called ‘SmartShift’ that can operate your battery automatically to try and optimise for these prices - buying low, selling high. But you can always override the control if you’d rather save the battery for yourself. The amount your battery earns will be different every day, depending on what happens to prices that day - some days you’ll earn a lot, others very little. And if you don’t have any battery power left and you have to buy your energy from the grid at expensive times, it can cost a lot more than traditional energy plans on some days.
The Illawarra Shoalhaven Community Solar and Battery Bulk Buy
The Illawarra Shoalhaven Joint Organisation (ISJO), made up of Kiama, Shellharbour, Shoalhaven and Wollongong councils, is teaming up with ShineHub to bring solar, battery and Virtual Power Plant (VPP) savings to local homes though a bulk-buy program. The VPP associated with this bulk-buy is retailer agnostic, meaning you can choose any electricity retailer, and the terms are pretty good. You can find out more by registering here.
If you want to see how different VPPs compare, check out this comparison table on Solar Quotes.
