Australia’s renewable energy landscape is undergoing a significant transformation, with a marked surge in household battery storage installations. According to recent data, approximately 75,000 battery storage systems were installed last year—a 47% increase from 2023—bringing the total number of systems across the country to over 320,000. This impressive growth reflects a broader trend: as solar feed-in tariffs continue to plunge, more households are choosing to store their own solar energy rather than sell it back to the grid.
Kevin Wen, a homeowner who installed rooftop solar panels in 2022, recently took the next step by adding a battery storage system to his setup. “Back in 2022, I was getting about 15 cents per kilowatt-hour for exporting my excess energy,” he recalls. “Then they lowered the buyback price to 8 cents, then 5 cents, and now it’s down to 3 cents. I just think it’s a scam, so now I’d rather use my energy for myself.” Wen’s experience is echoed by many Australians who are increasingly frustrated by the diminishing returns on their solar investments, prompting them to invest in battery storage to maximize the benefits of their solar panels.
The Plunge in Solar Feed-In Tariffs
The economics of rooftop solar have shifted dramatically in recent years. In the past, generous feed-in tariffs provided homeowners with a substantial financial incentive to install solar panels. In some states, tariffs once reached as high as 60 cents per kilowatt-hour. However, as market dynamics have evolved and the cost of solar technology has fallen, these payments have plummeted—sometimes to levels so low that households are, in certain cases, charged a fee for exporting power.
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“Solar feed-in tariffs, effectively, are the rate that households receive when sending power back to the grid,” explains Chris Williams, CEO of Natural Solar. “Historically, that rate was 15 or even 20 cents per kilowatt-hour, but now, in some areas, it’s as low as 2 or 3 cents, and in some cases, less than 1 cent. This drastic drop means that selling excess energy is no longer economically viable for many homeowners.”
As the return on solar feed-in decreases, the attractiveness of battery storage rises. Homeowners are now looking to capture the full benefit of the energy they generate by storing it for use during peak times—when electricity prices soar—or for emergency use when grid power is unavailable.
Economic Benefits of Battery Storage
Battery storage systems offer a promising solution to offset rising energy costs. According to estimates by the Smart Energy Council, a typical household equipped with both rooftop solar and a battery storage system can save roughly $1,500 a year on power bills from solar alone, with an additional $1,000 in savings from using stored energy during high-price periods. The current modelling indicates that the payback time for a battery storage system is about eight years, a figure that is expected to improve as battery prices continue to fall.
For many Australians, the high upfront cost of batteries—averaging around $10,000 per system—has been a major barrier to adoption. However, industry trends suggest that battery prices are decreasing by 5–10% each year, making them increasingly accessible. Furthermore, as more households invest in battery storage, economies of scale and technological advancements are likely to drive costs down even further.
Policy and Subsidy Debate
In response to the growing demand for battery storage, a wide range of experts are calling on the federal government to introduce household battery subsidies. Currently, battery subsidies are only available in New South Wales and the Northern Territory, while other jurisdictions such as Victoria, Tasmania, and the ACT offer interest-free loans for battery installations. However, many industry leaders believe that more direct subsidies would significantly boost uptake.
John Grimes, CEO of the Smart Energy Council, argues that a national subsidy scheme—potentially at $350 per kilowatt-hour—could reduce the cost of a small 5kWh battery to about $3,000, and a larger 10kWh system to around $7,000. “Solar energy doesn’t work at night, so what we want is a battery booster scheme that helps people take the energy from the middle of the day and use it in the evening when prices spike,” he explains. Grimes’s modelling suggests that if Australia reaches 1 million solar battery installations by 2030, households could collectively save more than $19 billion, easing the burden on family budgets and contributing to a greener energy future.
Former RBA deputy governor Guy Debelle also supports the call for subsidies. Debelle contends that rather than providing temporary energy bill rebates—which offer only short-term relief—government funds should be directed toward reducing the upfront costs of battery storage. “Relief to household budgets is only temporary while they’re receiving those cash payments. Repurposing that money to enable rooftop solar and battery installations will provide much longer-lasting insulation from energy price shocks,” he notes, emphasizing that such measures should target not only average households but also low-income communities, strata buildings, and landlords.
Consumer Impact: A Growing Movement
The sentiment among Australian consumers is clear: with rising power bills expected to increase by 2–9% in July, the cost of energy is a pressing concern. Kevin Wen’s experience is a case in point. Grateful for a $2,000 discount on his battery storage system under the NSW government scheme, Wen is enthusiastic about the prospect of broader subsidies. “If they want to promote green energy, it is really good to increase the subsidies right now. If they can increase it, that will be great for everyone,” he asserts.
The financial pressure on households has driven a dramatic surge in battery storage installations. The 47% increase in installations from 2023 to 2024 reflects a growing recognition that storing solar energy is not only a practical solution for managing rising energy costs but also an investment in a more resilient, sustainable energy future.
Future Prospects: Toward a Greener, More Resilient Energy System
The increasing adoption of battery storage is transforming households into mini power plants. By storing energy generated from rooftop solar panels, households can mitigate the impact of high electricity prices during peak demand periods, reducing their reliance on the grid and lowering overall energy bills. This shift is not only beneficial for individual consumers but also contributes to a more stable and resilient energy system at the community level.
The potential for a national battery subsidy scheme represents a critical policy opportunity. Such a subsidy could accelerate the transition to renewable energy by making battery storage systems more affordable for a wider range of households. As more Australians adopt battery storage, the cumulative effect could be significant—reducing energy costs, lowering carbon emissions, and easing the load on the national grid during peak times.
Moreover, as battery technology continues to advance and prices decline, the economic case for widespread adoption will only strengthen. Increased uptake of battery storage systems, combined with growing solar installations, promises a future where households are better insulated from global energy price shocks and better equipped to contribute to a sustainable energy landscape.
Broader Implications for the Australian Economy
The surge in battery storage installations is a positive development for the broader Australian economy. As households become more self-sufficient in managing their energy needs, there is potential for significant savings that can be redirected toward other essential expenses or investments. Additionally, the increased adoption of renewable energy technologies contributes to environmental sustainability, helping Australia meet its emissions reduction targets and combat climate change.
By reducing peak demand on the grid, widespread battery storage could also lead to a more efficient allocation of energy resources, potentially stabilizing energy prices and enhancing the overall reliability of the power supply. The combination of technological advancement, government support, and growing consumer demand sets the stage for a transformative shift in Australia’s energy landscape—a shift that could have far-reaching economic and environmental benefits.
Conclusion: A Path Forward for Green Energy
As plunging solar feed-in tariffs erode the financial benefits of exporting excess energy, Australian households are increasingly turning to battery storage as a viable alternative. With installations surging by 47% last year and the total number of systems surpassing 320,000, the trend is clear: battery storage is becoming an essential component of a modern, sustainable energy strategy.
The call for broader government subsidies is gaining momentum among industry experts and policymakers alike. A national battery subsidy scheme could drastically reduce upfront costs, making battery storage more accessible and accelerating the transition to renewable energy. Such a policy shift not only promises to lower household energy bills but also contributes to a more resilient and efficient energy system—a win for both consumers and the environment.
In the face of rising power bills and ongoing global energy challenges, the future of household energy management in Australia looks increasingly bright. As more households invest in battery storage and the technology continues to improve, the potential savings and environmental benefits are immense. By embracing these innovations and supporting them through targeted subsidies and favorable policies, Australia can lead the way in building a greener, more sustainable future for all.
