Is a Battery Worth It With a 10c Feed-in Tariff? The Australian Perspective
So, you've got solar panels on your roof, you're enjoying cheaper electricity bills, and you're getting a feed-in tariff (FiT) of 10c per kWh for the excess energy you send back to the grid. That's great! But you're wondering if adding a battery to your system makes financial sense. Let's break it down for the Aussie homeowner.
Adding a battery to your solar system can seem like a no-brainer, but with a 10c FiT, the equation becomes a little more complex. Complete Guide to learn more. Essentially, you need to weigh the cost of the battery against the savings you'll make by using stored solar energy instead of buying electricity from the grid, and the potential income from any additional grid services.
The Battery Basics: What You Need to Know
Before we dive into the financial nitty-gritty, let’s quickly recap what a solar battery does. A battery stores the excess electricity generated by your solar panels during the day. This stored energy can then be used at night or during periods of low solar production, reducing your reliance on grid electricity.
The key factors to consider are:
- Battery Capacity: Measured in kilowatt-hours (kWh), this determines how much energy the battery can store. A higher capacity battery will generally cost more.
- Installation Costs: This includes the cost of the battery itself, the inverter (if required), and the labour involved in installation. Installation can sometimes be around $3,000 for a simple install, but this can vary.
- Lifespan and Warranty: Batteries degrade over time, so it's important to consider the warranty period and expected lifespan.
The 10c Feed-in Tariff Factor
A feed-in tariff of 10c/kWh means you receive 10 cents for every kilowatt-hour of excess solar energy you export to the electricity grid. This income needs to be factored into your decision-making process.
Here's the core question: Is it more financially beneficial to store your solar energy in a battery and use it yourself, or to sell it back to the grid at 10c/kWh?
Let's consider a scenario. Suppose you're paying 30c/kWh for electricity from the grid (this is a common rate across many parts of Australia). If you use solar energy stored in your battery instead of drawing from the grid, you're effectively saving 30c/kWh. In contrast, selling that same energy to the grid only earns you 10c/kWh. On the surface, storing the energy seems like the better deal.
The Costs Involved: Upfront Investment and Ongoing Expenses
The biggest hurdle is the upfront cost of purchasing and installing a battery system. A good quality battery, professionally installed, can set you back a significant amount.
Here's what contributes to the overall cost:
- Battery Unit Cost: The price of the battery itself, which varies depending on its capacity and brand.
- Installation: Labour, wiring, and any necessary upgrades to your electrical system.
- Inverter (if needed): Some batteries require a specific inverter to convert the DC power from the battery to AC power for your home.
- Maintenance: While batteries require minimal maintenance, there may be occasional servicing costs.
Rebates and Incentives:
The good news is that there are government rebates and incentives available to help reduce the cost of batteries. A federal government rebate can substantially reduce the upfront cost. Some states offer additional incentives, which can be "stacked" on top of the federal rebate for even greater savings. Check what is available in your state or territory.
Making the Calculation: Is it Worth It?
To determine if a battery is worth it with a 10c FiT, you need to consider several factors and do some calculations:
- Your Energy Consumption Profile: How much electricity do you use, and when do you use it? If you use a lot of electricity at night, a battery is more likely to be beneficial.
- Solar Production: How much electricity do your solar panels generate, and when do they generate it?
- Battery Size: Choosing the right size battery is crucial. A battery that's too small won't meet your needs, while one that's too large will be an unnecessary expense.
- Payback Period: Calculate how long it will take for the savings from using battery power to offset the initial cost of the battery system.
Example:
Let's say you install a battery system for $10,000 after rebates. Your electricity bill savings are $800 per year by using stored solar. This means it will take 12.5 years to pay back the investment. This is a simplified example, and the actual payback period will depend on your specific circumstances.
Other Considerations
- Virtual Power Plants (VPPs): Consider joining a VPP. This can potentially reduce payback periods.
- Electricity Tariffs: Shop around for the best electricity tariff, including those with off-peak rates.
- Future-Proofing: While the financial returns may not be immediate, a battery can provide energy independence and protect you from future electricity price increases.
The Verdict
Ultimately, whether a battery is "worth it" with a 10c feed-in tariff depends on your individual circumstances. While the FiT reduces the immediate financial incentive, the savings from using stored solar energy instead of grid power, combined with available rebates, can still make a battery a worthwhile investment, especially if you have high nighttime electricity consumption. Do your research, get quotes from reputable installers, and carefully consider your energy needs before making a decision.
