In Blog, Inverters, Micro Inverters & Optimisers

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

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

Robert Broome said : Guest Report one year ago

This is a fantastic oped. Thank you. Have you updated, the article since 2018? Electricity costs are considerably higher now.

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Mark C said : administrator Report 2 years ago

Hi T. Nesbitt. Yes. You'd need to decide how much you are actually feeding back to the grid. If you are only sending back $20/qtr, and your bill is still over $300/qtr then it may be worth upgrading and losing your feed in.

    Nevill J Fox said : Guest Report 2 years ago

    Thank you for such a considered piece.

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    T Nesbitt-Foster said : Guest Report 3 years ago

    System was installed November 2010, 8 panels 1.5 inverter (re-furbished 2017). Is $0.44c stopped if solar system is increased?

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    Mark C said : administrator Report 4 years ago

    Hi Stephen, sorry for the delayed reply. No, if you add another system or a battery you will lose your 54c feed-in tariff. How much are you selling back to the grid each quarter? If you only feed in $100 or less a quarter and you still have a $300 power bill or more, then maybe it's worth considering upgrading your solar anyway.

      Steve Brown said : Guest Report 4 years ago

      With a 3 phase supply and existing 3kw solar on a separate phase at 54 cent feed-in, the possibility of installing a second pv system with a battery to offset our residual bill of $500/qtr is of interest. In our case, power cost is somewhere between the 25c grid tariff and the 54c feed-in so the numbers might be different?? This assumes that we can install a second system on the house phase without compromising the 54c contract. Any comments welcome.

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      Steve Brown said : Guest Report 4 years ago

      With a 3 phase supply and existing 3kw solar on a separate phase at 54 cent feed-in, the possibility of installing a second pv system with a battery to offset our residual bill of $500/qtr is of interest. In our case, power cost is somewhere between the 25c grid tariff and the 54c feed-in so the numbers might be different?? This assumes that we can install a second system on the house phase without compromising the 54c contract. Any comments welcome.

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      Shane Lee said : Guest Report 4 years ago

      thanks Mark. good to know if i choose that inverter. started initial discussions with companies down here in melbourne.

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      Mark C said : administrator Report 4 years ago

      Hi Shane, we've been meaning to do a review on Solar Analytics. It's definitely the best monitoring on the AC side of your inverter. It doesn't monitor the DC side which is why we still use our Fronius inverter monitoring, and for simplicity of using 1 platform, we also install the Fronius Smart Meter for the AC consumption monitoring. A lot of faults can be picked up with DC data and SA just can't give you that. But like Taco girl says: why can't we have both :)

        Shane Lee said : Guest Report 4 years ago

        thanks Ben Ive been doing a good bit of research recently. is a great place to start aswell. I think he mentions that those inverters will work with batteries in the future. Do you have on the blog reviews of monitoring? Im a sofware engineer so Im very keen on looking at data and nice graphs!! Finn does mention solar analytics. Thanks, Shane.

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        Ben Neville said : administrator Report 4 years ago

        Hi Shane. You don't need a hybrid solution for a future AC coupled option. It's only if you were looking to get DC coupled batteries in that future that you'd need a hybrid solution. However, a hybrid inverter now has no guarantee it will work with future DC batteries, so it does seem a bit pointless to fork out extra for no guarantees. LG is a high quality panel. SMA and Fronius are high quality inverters, with Fronius having the current edge in this regard. SolarEdge comes across as high end, but in reality has some significant reliability concerns surrounding it - I'd recommend reading Mark's blog on the topic and the comments at the bottom from others in the industry / public to get more of an idea here.

          Shane Lee said : Guest Report 4 years ago

          Thanks for the update Ben. I think I will wait and see what happens in that space. I am looking to get solar panels soon in Melbourne. Do I need to ask for a hybrid solution to handle a battery potentially in the future? Also I have seen some people recommend LG panels and (Fronius, SMA and Solaredge) inverters. Whats your take? Thanks, Shane.

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          Ben Neville said : administrator Report 4 years ago

          Hi Shane. Yes, it would definitely make more sense at that point, but I'd still need to work out the figures and add battery losses into the equation. However, I'd still push to wait until that happens, and then add a battery at that point. You don't need to add the battery now. Waiting only guarantees a return, and you'll likely end up with a cheaper + superior battery solution.

            Shane said : Guest Report 4 years ago

            Hi Ben, I am thinking of getting a battery with solar panels. I take your argument. But I'll play the devil's advocate here! Let's say with all these rebates, that feed in tariff prices go down. Not only that with solar surge into the grid discussed recently, that you may not be even able to feed back in at different stages due to legacy infrastructure. And in the future I owned an electric car. Would it make sense then? Thanks, Shane.

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            Mark C said : administrator Report 4 years ago

            Hi Tony, Batteries makes poor economic sense when in when you take into account efficiency losses and that you could get paid to feed the power back to the grid. Batteries are getting more expensive and more unreliable (recent reports from a battery test centre). Some companies are making little profit on installing batteries. Others may be more wisely factoring in future warranty calls and a potentially ruined reputation when customers are not happy. We generally avoid batteries unless a customer understands it makes no economic sense, and they are willing to pay a premium knowing we'll be around to back up our work.

              Tony Williams said : Guest Report 4 years ago

              hi I cannot get a proper price on batteries I prefer sonnen or power wall but there is too many conflicting prices and info. I am prepared to pay $10k for a decent battery but I cannot understand why it costs so much to install when in my case the switch box is behind the wall and it only a matter of connecting at most six wires as I am using micro inverters.

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              David Johnsson said : Guest Report 4 years ago

              Don't forget that the efficiency of charging/discharging a solar battery is typically in the range of 80%. So in the end the value of your stored energy is even lower. Also, you should never discharge to 0% or charge to 100% since it will degrade the battery.

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              Mark C said : administrator Report 4 years ago

              That's a really interesting point, Kenneth! I can't see batteries making economic sense for at least 5 years. By then many of us will be driving electric cars.

                Kenneth said : Guest Report 4 years ago

                Reading in on this article from the Netherlands, I can only agree on the economics of batteries for solar. I am guessing that before batteries may become economically viable for solar it will be caught up by smart grid technologies using our by then widely available car batteries to offload excess solar power.

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                Ben Neville said : administrator Report 5 years ago

                Appreciate the kind words Shaun :)

                  Shaun Casey said : Guest Report 5 years ago

                  Best article Best research on Home Batteries for Queenslanders ever. I have read hundreds of stories over the last 2 years while waiting to purchase a battery to complete my solar system of 40 Solar panels. Thanks Ben. I have now subscribed to your news letter.

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                  Michael said : Guest Report 5 years ago

                  Fantastic article! It was a joke when companies hiked their pricing for batteries after the rebate was announced. The co I worked for jumped Tesla from 11K to 16K! David, you will be probably be changing your battery in 5 years anyway so dont worry, problem is you will still be paying $30 a mth for the next 5 years as well for the old one!

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                  Ben Neville said : administrator Report 5 years ago

                  Hi Mark - I've had some good chats on Whirlpool forums regarding that point you mentioned - the battery being a necessary evil to "unlock" the loan. And I do tend do agree that this is the best use of the loan. It does seem a shame that that battery really isn't going to do much, and it's not going to solve the grid constraints, which I imagine was the initial intention of the grant. I too think the cheaper battery option makes sense. As long as your payback is the same or close to buying "solar only," and you have no other interest free avenues, then this is a good purchase.

                    Mark said : Guest Report 5 years ago

                    Hi Ben - I'm still trying to come to terms on what to do. I have received approval for the grant/loan. I have received two quotes both offering Phono Mono Cells (6.5KW) and a Fronius inverter. However one offer is for a large battery (LG Chem 7 KWh) whilst the other is for a much smaller battery (Solar Watt 2.4KWh). The supplier selling the smaller battery is saying that the battery is a 'necessary evil' in getting the grant + loan. And that I shouldn't focus on the battery at all rather selling power back into the grid and benefiting from EA's (or another retailers) feed in tariff. I ultimately need to pay around $300 to get the full package whereas the more expensive battery see me outlaying an additional $5k. Seems that the cheaper battery option makes more sense.

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                    Ben Neville said : administrator Report 5 years ago

                    Hi Lawrence, Thanks for the feedback. A BESS system would be the worst thing you could add into an approved 44c FiT site. You would essentially be losing at least 20c per kWh exported (24c - 44c). So, storing power is the last thing you would want to do, if that power is worth 44c exported.

                      Lawrence Coomber said : Guest Report 5 years ago

                      Hi Ben thanks for your transparent and objective advice. I have several solar customers in SE Qld still on the 44 cents Qld Solar Scheme FIT who want to change to a BESS System. Have you any advice for them on this subject regarding both the commercial viability and in particular if their eligibility for the 44 cents FIT would remain intact by the change over to a BESS system.

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                      Ben Neville said : administrator Report 5 years ago

                      Hi Niki, I assume when you say the out of pocket amount is $1000, that the entire system + battery is therefore $11 000? That is extremely cheap, if possible would you be able to share what size system you are getting, and what size battery you are getting? While you say it is still a significant saving to your husband and yourself, I can guarantee the savings of solar only would be better. However, you bring up a point where you are unable to get into solar, so this scheme is a great way to enter the market. The interest free component is therefore - to me - the main valuable component of the scheme. However, I do worry that companies would be trying to get system prices close to $10 000, meaning the end customer is left with a cheap, low storage battery, and/or a cheap, smaller system. However if you are happy with the system size, components, and company, and were unable to get solar without the interest free loan, then yes, this scheme is a sure winner. But for the majority of people a re-draw on their mortgages, or a 6.12% Greenloan for solar only, is the better saver.

                        Niki said : Guest Report 5 years ago

                        Hi David I can see that you but a lot of work into the maths for this. However, I have a simpler viewpoint. I have applied for the loan and grant. I will be paying back the loan over 10 years interest free for the solar panels - so they are what is costing me. The quote I have at this time is an out of pocket amount of $1000. Therefore the battery is costing me $1000. Going by previous electricity accounts, that amount will be absorbed in less than a year of decreased grid electricity usage. I can't be more exact than that as I have changed from a 5 person household to a 2 person household and don't know exactly what my energy usage will be. Even taking into account that the battery will not be the highest quality and may only last 5 years, that is still a significant saving to my husband and I. So for people who have been eager to get into solar for many years, this is a great way to get us set up with solar and batteries. We are willing to take the risk at this time because we know that there is a lot of work going into improving battery technology and the government scheme allows us to wait and save up for the best battery system when they become available.

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                        Blake said : Guest Report 5 years ago

                        Hi Ben, you make a good point when using the Powerwall as the benchmark, if you looked at it from the perspective of a say an LG 3.3 at just around the 3.5k mark your essentially getting a battery for very little in a combined battery and solar panel setup and the entire system on a 10 year interest free loan with no upfront cost to the consumer. the battery performance is largely irrelevant as the consumer no longer has to come up with the $7000ish for an entire system upfront.

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                        Ben Neville said : administrator Report 5 years ago

                        Hi Blake. The interest free component is great, and probably the only part that makes a lot of sense. Unfortunately, the battery with the cheapest price per kW is the Tesla Powerwall 2 - which comes in at $13 000. After the grant that's $10 000, and pretty much the entirety of the interest free loan absorbed. You will still need to pay for the solar system like normal without the interest free component, so you're actually no better off as you could have done this from the get-go.

                          Blake said : Guest Report 5 years ago

                          Hi Ben, Have you looked at it from the Grant and Interest free loan perspective with an up too $10,000 interest free loan(10 Years) for a combination battery and solar system it would create a lower barrier on entry for households. obviously this depends on the overall cost of the system. it seems like your potentially missing consumers who would struggle with an upfront outlay.

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                          Aaron Lal said : Guest Report 5 years ago

                          Thanks for sharing! You have very nicely explained the role gravity played in electricity. These are all interesting electricity facts. All the best!

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                          Nigel Morris said : Guest Report 5 years 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 5 years ago

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

                            Peter said : Guest Report 5 years 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 5 years 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 5 years 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 5 years 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 5 years 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 5 years 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 5 years 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 5 years 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 5 years 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 5 years 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 5 years ago

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

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