Extending Your Solar Savings: Battery Storage vs. Feed-in Tariffs

So, you've joined the millions of Aussies who’ve embraced the power of the sun and installed solar panels on their roofs. Congratulations! You're contributing to a greener future and, hopefully, saving some serious money on your electricity bills. But are you getting the most out of your investment?

The initial thrill of seeing your bills shrink can fade as you realise you're still reliant on the grid, especially at night or on cloudy days. That's where the big question comes in: how do you maximise your solar savings? The two main contenders are battery storage and feed-in tariffs. This article breaks down the pros and cons of each to help you decide which is the best fit for your energy needs and budget. For more in-depth information, check out our Complete Guide to adding batteries to an existing solar system.

Understanding Feed-in Tariffs (FiTs)

For years, feed-in tariffs (FiTs) have been the standard way to offset your electricity costs with solar. Essentially, when your solar panels generate more electricity than you're using, the excess is sent back to the grid. Your energy provider then credits you for this electricity at a set rate per kilowatt-hour (kWh).

The Good:

• Simple and Accessible: FiTs are easy to understand and automatically implemented when you install solar panels. There's no need for additional equipment or complex setups.
• Immediate Savings: You start earning credits on your bill as soon as your system is connected.
• Low Upfront Cost: Unlike battery storage, there's no significant initial investment required beyond the cost of your solar panels.

The Not-So-Good:

• Diminishing Returns: Feed-in tariff rates have decreased significantly over the years. What was once a generous incentive is now often a relatively small credit, sometimes only a few cents per kWh.
• Dependence on Grid Prices: You're essentially selling your excess electricity at wholesale prices, which are typically lower than the retail prices you pay when buying electricity from the grid. So, you're selling low and buying high.
• Not Ideal for Self-Sufficiency: You're still reliant on the grid for power when your solar panels aren't generating enough electricity, meaning you're still subject to fluctuating grid prices.

Diving into Battery Storage

Battery storage allows you to store the excess electricity generated by your solar panels for later use. This means you can power your home at night or during peak demand periods, reducing your reliance on the grid and maximising your self-consumption of solar energy.

The Perks:

• Increased Self-Sufficiency: Store your daytime solar energy and use it at night, becoming less dependent on the grid and shielding yourself from rising electricity prices.
• Greater Savings: By using more of your own solar energy, you minimise the amount of electricity you need to purchase from the grid, leading to potentially significant long-term savings.
• Backup Power: Some battery systems can provide backup power during blackouts, keeping essential appliances running when the grid goes down.
• Environmental Benefits: Reduced reliance on fossil fuel-based electricity generation.

The Drawbacks:

• High Upfront Cost: Battery storage systems represent a significant initial investment, adding thousands of dollars to the cost of your solar setup.
• Lifespan and Maintenance: Batteries have a limited lifespan (typically 5-15 years) and may require maintenance or eventual replacement, adding to the overall cost.
• Complexity: Battery systems are more complex than simple solar panel setups and require careful planning and installation.
• Space Requirements: Batteries can take up a considerable amount of space in your garage or home.

Making the Right Choice: Which is Better for You?

The best option for you depends on a variety of factors:

• Your Energy Consumption: How much electricity do you use, and when do you use it? If you have high energy consumption during peak hours (evenings) then batteries will be more worthwhile.
• Feed-in Tariff Rates in Your Area: What rate are you currently receiving for your excess solar energy? Lower rates make battery storage a more attractive option.
• Your Budget: How much are you willing to invest upfront? Battery storage requires a significant initial investment.
• Your Goals: Are you primarily focused on saving money, or are you also interested in increasing your energy independence and resilience?
• Government Rebates and Incentives: Check for any government rebates or incentives that can help offset the cost of battery storage.

Here's a simplified guideline:

• If you're on a tight budget and your feed-in tariff rate is relatively high: Stick with feed-in tariffs for now.
• If you want to maximise your savings, increase your energy independence, and can afford the upfront cost: Battery storage is likely the better option.

A Word on Australian Solar Trends

Australia has seen incredible solar uptake, with over 4.1 million homes, or 38% of all dwellings, now sporting solar panels by May 2025. While initial incentives and falling prices drove rapid growth, installations have somewhat plateaued recently. The cost of solar systems has also stabilised after a decade of decreases, hovering around $0.89 per watt after reaching $2.41 per watt in 2012. The cost of installing a 10kW system can also vary significantly, ranging from $7,220 in Canberra to over $13,000 in Darwin due to differences in labour expenses and rebate rates. With wholesale costs of solar equipment having significantly dropped over the last 15 years, the strength of the Australian dollar is also an important factor in determining prices.

Conclusion

Both feed-in tariffs and battery storage have their own advantages and disadvantages. Feed-in tariffs offer a simple and accessible way to offset your electricity costs, while battery storage provides greater self-sufficiency and potentially larger long-term savings. Carefully consider your individual circumstances and priorities to determine which option is the best fit for your needs.

Remember to get quotes from reputable solar installers and compare your options before making a decision. A well-informed choice will ensure you get the most out of your solar investment and contribute to a more sustainable future for Australia.