How to choose the best solar battery storage
What you need to know about adding battery storage to your home's solar panel system. Information about brands such as Tesla Powerwall and Fox ESS.
Welcome to Sunny Side Up, where we shed light on all things solar! Home battery storage is a hot topic for energy-conscious consumers. If you're already harnessing the sun's power with solar panels on your roof, there's a clear advantage to storing any surplus electricity in a battery for use during the night or on low-sunlight days.
The popularity of batteries is on the rise. As of 2023, solar analytics company Sunwiz reported approximately 180,000 home storage batteries installed in Australia, with a staggering 47,100 installations in 2022 alone - a remarkable 55% increase from the previous year. Notably, about one third of these battery installations were added to existing solar panel systems, while the majority were part of new solar installations. In fact, around 14% of new solar installations in 2022 incorporated a battery.
We'll walk you through how these batteries work and provide essential insights to consider before making the decision to install one. Stay tuned to learn all you need to know about embracing the power of home battery storage.
How do home solar batteries work? The concept of home battery storage has been around for a while. Off-grid solar PV and wind electricity generation in remote areas have utilized battery storage to store unused electricity for later use. Today, storage batteries are gaining popularity in new solar installations, and it's predicted that within the next five to 10 years, most solar-powered homes will have a battery system.
With a sufficiently large solar panel array and battery, you can significantly power your home with solar energy. Batteries capture any surplus solar power generated during the day, making it available for use at night or on low-sunlight days. Installations that incorporate batteries are increasingly sought-after due to the desire for greater independence from the grid. For many, it's not just an economic choice but an environmental one, reflecting their commitment to reduce reliance on energy companies.
If your solar panel array and battery are sizeable, you can substantially rely on solar power to run your home. Additionally, using electricity from your battery may be more cost-effective per kilowatt-hour (see terminology) compared to grid electricity, depending on the time of day and local electricity tariffs.
How much does a home solar battery cost?
Costs vary significantly for solar batteries, but generally, the higher the battery capacity, the more you can expect to pay.
Here are typical battery costs for some common sizes (including installation).
5kWh: $7000–9000
10kWh: $11,000–14,000
13-16kWh: $15,000–18,000
As an example, one of the most popular batteries is the FOX ESS AIO-H1-5.0-HVS10.4 (single phase) with 6.6kW of solar panels. This currently costs about $18,500 before any subsidies, with an out of pocket price around $15,800 after the solar panel rebate and if you are lucky enough to live in the Northern Territory you could pay as low as $10,450.
The lower-end prices tend to be for a battery pack only (cells plus battery management system). Higher-end prices often mean that the battery system has a built-in battery inverter and other integrated components as well. When getting quotes, make sure it's clear whether the cost of a new inverter and extra electrical work are factored in.
It can be more cost-effective to buy a battery as part of an entire new solar panel system package than to retrofit it to an existing system, especially if the existing system is several years old (it may need substantial upgrading to accommodate the battery).
Are home solar batteries a worthwhile investment?
For most homes, we think a battery doesn't make complete economic sense yet. But with recent advances in technology and efficient designs and lower installation costs. We are now seeing buy back periods from as low as 2 years up to 6 years.
Installing a storage battery offers several compelling reasons for homeowners. While some may find the economics appealing, especially for high power consumers who efficiently use solar-generated and stored power, others prioritize other benefits.
For households with high power consumption, a well-managed battery system can yield a return on investment in less than 10 years. Joining a Virtual Power Plant (VPP) scheme can further enhance the economics, providing additional benefits (see below for more on VPPs).
Beyond the financial aspect, many homeowners are motivated by other factors. A storage battery provides protection against blackouts, maximizes the advantages of solar panels, and allows them to embrace cutting-edge technology. Some simply prefer the idea of being less reliant on the grid and being more independent.
If considering a battery, it's advisable to gather quotes from reputable installers and conduct thorough research. Independent trials have highlighted the importance of a strong warranty and solid support from suppliers and battery manufacturers in case of any issues.
At Sunny Side Up, we recommend exploring all aspects of home battery storage before making a decision. Our aim is to provide valuable insights and guidance to ensure your solar journey is well-informed and successful. Stay tuned for more articles on home batteries and Virtual Power Plants (VPPs) to expand your knowledge and make the best choice for your energy needs.
Rebates and subsidies
Government rebate schemes, and energy trading systems such as Reposit, can definitely make batteries economically viable for some households. Beyond the usual Small-scale Technology Certificate (STC) financial incentive for batteries, which applies across Australia, there are currently rebate or special loan schemes in some states and territories.
Victoria: Solar Homes Program
Northern Territory: Home and Business Battery Scheme
Note that the Victorian Solar Homes Program has a fixed number of subsidies available over a set period. So it's possible for a subsidy scheme to be active, but unavailable until the next round of subsidies opens up.
Rebate schemes are revised from time to time, so it's worth also checking the federal government energy website to see what's available in your area.
Virtual Power Plants
A Virtual Power Plant (VPP) is a network of solar and battery systems installed on homes and businesses, centrally controlled by a computer system run by the VPP operator company. By joining a VPP program, you agree to make the stored energy in your home battery available to the VPP operator who can then use it to supply the grid in times of high demand.
In return, you're paid a subsidy, which might be in the form of reduced energy bills, a rebate towards buying the battery, or even free solar and battery installation. But note that even joining a VPP program won't always guarantee that your battery pays for itself, and it can mean that you'll sometimes find your own battery is running low at night when you want it, due to the VPP having taken some of the stored energy earlier that day.
There are various Virtual Power Plant programs in most states which can help reduce the cost of a battery. SolarQuotes maintains a list of current VPP programs.
Don't forget the feed-in tariff
When you're doing the sums to decide whether a battery makes sense for your home, remember to consider the feed-in tariff (FiT). This is the amount you're paid for any excess power generated by your solar panels and fed into the grid.
For every kWh diverted instead into charging your battery, you'll forgo the feed-in tariff. While the FiT is generally quite low in most parts of Australia, it's still an opportunity cost you should consider. In areas with a generous FiT (such as the Northern Territory's FiT for legacy solar installations) although that FiT will end in April 2024.
Home Insurance Home insurance typically covers your solar panel system, including the panels, inverter, and battery (if applicable), as they are considered part of your house. However, it is essential to ensure that the insured amount for your home is increased to adequately cover the replacement cost of the solar panel system.
Increasing the insured amount will provide you with sufficient coverage in case of damage or loss to your solar panel system, ensuring that you can replace or repair it without incurring significant financial burdens.
For more detailed information on solar panels and home insurance, we invite you to explore our comprehensive guide. At Sunny Side Up, we are committed to providing valuable resources to help you make informed decisions and protect your solar investment.
Grid-connected vs off-grid
There are four main ways your home can be set up for electricity supply.
Grid-connected (no solar)
The most basic set-up, where all your electricity comes from the main grid. The home has no solar panels or battery.
Grid-connected solar (no battery)
The most typical set-up for homes with solar panels. The solar panels supply power during the day, and the home generally uses this power first, resorting to grid power for any extra electricity needed on low-sunlight days, at night, and at times of high power usage.
Grid-connected solar + battery (aka 'hybrid' systems)
These have solar panels, a battery, a hybrid inverter (or possibly multiple inverters), plus a connection to the main electricity grid. The solar panels supply power during the day, and the home generally uses the solar power first, using any excess to charge the battery. At times of high power usage, or at night and on low-sunlight days, the home draws power from the battery, and as a last resort from the grid.
For more on different types of inverters, how they work and their pros and cons, check out our guide to buying a solar inverter.
Off-grid
This system has no connection to the main electricity grid. All the home's power comes from solar panels, and possibly some other types of power generation as well, such as wind. The battery is the main power source at night and on low-sunlight days. The final back-up is usually a diesel-powered generator, which may also kick in when there's a sudden high demand for power (such as when a pump starts up).
Off-grid systems are usually much more complex and expensive than grid-connected systems. They need more solar and battery capacity than a typical grid-connected system and may also need inverters capable of higher loads to cope with peak demands. Homes that run off-grid need to be particularly energy-efficient and the load demand needs to be well-managed throughout the day.
Off-grid systems generally only make sense for remote properties where a grid connection isn't available or would be prohibitively expensive to install.
What happens in a blackout?
In a blackout, having a battery in most grid-connected solar systems may not necessarily protect you from losing all power to your home. Grid-connected systems are designed with 'anti-islanding protection', which means that during a blackout, the solar panels and battery must shut down to prevent pumping power unexpectedly into the lines and posing a risk to grid workers.
This shutdown during a blackout means that your solar panels won't be able to provide power to your home, even if the battery is charged and ready to use.
Some more advanced inverters can provide anti-islanding protection while still allowing the solar panels and battery to operate during a blackout, providing limited power to critical household circuits like the fridge and lighting. However, such systems are generally more expensive, as they require additional hardware and may need larger solar and battery capacity to run the house for an extended period during a blackout.
If you want your battery to supply power during a blackout, it's crucial to ensure that only critical household circuits are connected to it. Running power-hungry appliances like a pool pump or underfloor heating can quickly drain the battery's capacity during a blackout, leaving you with limited power for essential needs. Additional wiring work may be required to isolate and prioritize critical circuits during a blackout.
Types of solar battery
Lithium-ion
The most common type of battery being installed in homes today, lithium-ion batteries use similar technology to their smaller counterparts in smartphones and laptop computers. There are several types of lithium-ion chemistry. A common type used in home batteries is lithium nickel-manganese-cobalt (NMC), used by Tesla and LG Chem.
Another common chemistry is lithium iron phosphate (LiFePO, or LFP) which is said to be safer than NMC due to lower risk of thermal runaway (battery damage and potential fire caused by overheating or overcharging) but has lower energy density. LFP is used in home batteries made by BYD and Sonnen, among others.
Pros
They can give several thousand charge-discharge cycles.
They can be discharged heavily (to 80–90% of their overall capacity).
They're suitable for a wide range of ambient temperatures.
They should last for 10+ years in normal use.
Cons
End of life may be a problem for large lithium batteries.
They need to be recycled to recover valuable metals and prevent toxic landfill, but large-scale programs are still in their infancy. As home and automotive lithium batteries become more common, it's expected that recycling processes will improve.
Lead-acid, advanced lead-acid (lead carbon)
The good old lead-acid battery technology that helps start your car can be also used for larger-scale storage. It's a well-understood and effective battery type, and banks of these batteries can be (and are) used for home storage batteries. But attempts to develop advanced lead-acid technology over the past several years have not delivered sufficient results, and this technology is fading away as a storage solution as lithium storage batteries have more advantages.
Pros
They're relatively cheap, with established disposal and recycling processes.
Cons
They're bulky and require a lot more space than an equivalent lithium battery.
They're sensitive to high ambient temperatures, which can shorten their lifespan.
They have a slow charge cycle.
They require regular maintenance.
Lithium batteries offer advantages such as relatively compact size, low maintenance and longer warranties.
Flow battery
One of the most promising alternatives to lithium-ion, this type uses a pumped electrolyte (such as zinc bromide or vanadium ions) and chemical reactions to store charge and release it again. Redflow's ZCell battery is the main flow battery currently available in Australia.
Pros
They can be discharged to 100% of their capacity and have no residual discharge so they won't lose charge over time.
They don't lose capacity over time.
They operate well in high ambient temperatures.
They're relatively easy to recycle.
They should last for 10+ years.
Cons
Being new technology, they're relatively expensive compared to lithium-ion.
They don't tolerate cold well (below 15°C).
They require frequent maintenance which takes them temporarily out of service.
Other types
Battery and storage technology is in a state of rapid development. Other technologies currently available include hybrid ion (salt water) batteries, molten salt batteries, and graphene supercapacitors. None of these are in common usage at this stage.
Battery specifications
These are the key technical specifications for a home battery.
Capacity
How much energy the battery can store, usually measured in kilowatt-hours (kWh). The nominal capacity is the total amount of energy the battery can hold, while the usable capacity is how much of that can actually be used, after the depth of discharge is factored in.
Depth of discharge (DoD)
Expressed as a percentage, this is the amount of energy that can be safely used without accelerating battery degradation. Most battery types need to hold some charge at all times to avoid damage. Lithium batteries can be safely discharged to about 80–90% of their nominal capacity. Lead-acid batteries can typically by discharged to about 50–60%, while flow batteries can be discharged 100%.
Power
How much power (in kilowatts) the battery can deliver. The maximum/peak power is the most that the battery can deliver at any given moment, but this burst of power can usually only be sustained for short periods. Continuous power is the amount of power delivered while the battery has enough charge.
Efficiency
For every kWh of charge put in, how much the battery will actually store and put out again. There's always some loss, but a lithium battery should usually be more than 90% efficient.
Total number of charge/discharge cycles
Also called the cycle life, this is how many cycles of charge and discharge the battery can perform before it reaches the end of its life. Different manufacturers might rate this in different ways. Lithium batteries can typically run for several thousand cycles.
Lifespan (years or cycles)
The expected life of the battery (and its warranty) can be rated in cycles (see above) or years (which is generally an estimate based on the expected typical usage of the battery). The lifespan should also state the expected level of capacity at the end of life. For lithium batteries, this will usually be about 60–80% of the original capacity.
Ambient temperature range
Batteries are sensitive to temperature and need to operate within a certain range. They can degrade or shut down in very hot or cold environments.
Solar batteries typically have a lifespan of around 10 years or more under normal usage conditions and when not exposed to extreme temperatures. Many solar batteries come with a warranty period of 10 years, indicating the manufacturer's confidence in their longevity.
However, there is limited real-world data on how long modern solar batteries last in home installations since recent generations of batteries have only been in use for a few years. Lab testing of battery durability and lifespan has shown mixed results, with some batteries experiencing high failure rates.
Consumer reviews on various websites suggest that most households with storage batteries are satisfied with their performance, especially with major brands. Some customers report problems with battery failure or customer support from the supplier, but overall, the batteries seem to perform as expected.
It's important to consider future changes to the electricity market and the impact on solar power. The electricity grid in Australia was not originally designed to handle large numbers of homes exporting solar power, leading to proposals for modernizing the grid and implementing measures like a possible "solar tax" for solar PV system owners who want to sell their excess power to the grid. In such scenarios, having a storage battery could become a more attractive option for solar power users.
Before making a decision, it is advisable to research and compare different battery options, consider warranties and manufacturer support, and assess your specific energy needs to determine if a solar battery is a suitable investment for your home.