In sunny Australia, household rooftop solar can be a great way to generate some of your own power, and potentially save money off your electrical bill. Thanks to recent technology improvements and price reductions, home battery storage makes it possible to store the sun’s energy and use it again at night. But as more and more players enter the market, which option is right for you?
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For those who like spoilers, the overwhelming winner of the ‘best’ battery is the Tesla Powerwall 2. Many other batteries offer compelling advantages, but struggle to compete with its excellent cost for the capacity.
The second spoiler is that none of the available options, including the Powerwall, make economic sense for the majority of households in Australia . That will change, and it does not mean that there are a lot of good reasons to install home battery storage, but they won’t magically save you bucket loads of cash from day one. That said, it didn’t stop 6750 Aussies going ahead with battery installs in 2016, and 2017 is shaping up to have even more.
For those who want to delve into calculating your actual economic return, skip down to the end, where we have included some more info. For those who want to know the steps to take to home battery storage nirvana, read on.
Home Battery Storage 101
The underlying concept is quite simple. For a large upfront cost, solar panels can generate ‘free’ electricity, but don’t work at night. Alternatively, off-peak power is much cheaper, but only available in the middle of the night.
A normal household tends to use the most power in the morning, and then again in the evening, which does not line up too well with solar or off-peak power.
Some electricity providers are moving towards time of day metering, where peak times (those mornings and evenings) are charged at a higher rate.
[referenced url=”https://www.gizmodo.com.au/2017/05/you-can-now-pre-order-teslas-solar-roof-in-australia/” thumb=”https://i.kinja-img.com/gawker-media/image/upload/t_medium/h29cvnsqc1pocmdao3nx.jpg” title=”You Can Now Pre-Order Tesla’s Solar Roof In Australia” excerpt=”When Tesla announced its solar roof tiles, we said it would be a perfect product for Australian homes. Well, if you’ve been holding off that renovation, now’s the time. although installations won’t begin until 2018, you can pre-order your solar roof panels now.”]
That’s where battery storage comes in, allowing homes to store some of the solar power, or cheap off-peak power, and then use it at other times. With the right setup and situation, storing and using the solar or off-peak is cheaper than buying the more expensive power during peaks times.
Some battery storage systems also work as backups during a blackout, so you don’t lose power. The big issue right now is that the economics of battery storage, vs just buying from the grid are not yet break even, so it’s not just a no brainer upgrade.
The battery storage concept has been around a long time, but it wasn’t until Tesla pushed battery prices lower and produced a slick product that the wider community really took notice. Now there are quite a few alternatives with their own unique features, all vying for a share of the market.
To make it more complex, home battery storage can be implemented in a number of different ways. Coupled with the fact that every household, not to mention location, is different when it comes to solar, batteries and energy use, making sure your system is worth the investment, let alone getting the most from it, is not exactly straightforward.
Battery Technology Basics
Electricity is commonly measured and billed in kWh (kilowatt hours), which is how many kilowatts (thousands of watts) used in an hour. For example, your power bill will give kWh figures – either for daily use, or over the billing period. A daily use figure of 10 kWh doesn’t mean you used 10 kW in one hour – rather the equivalent of 10kw in one hour, but spread over the day. Appliances ratings are a little different – typically using ratings in watts. For example, a 2000W heater uses 2 kW each hour – so 2 hours use a day will add 4kWh to your power bill. Other appliances such as TVs and fridges often include a sticker with the expected power use over a year, given in kWh. Battery storage capacities are also rated in kWh – for example, the Tesla Powerwall has a 14kWh capacity. That means it can could run the 2kW heater for 7 hours, or a 0.5KW computer for 28 hours.
Raw battery capacity ratings are a little misleading though, as the available capacity is often lower. You also lose some of the stored power through efficiency losses each time it is charged or discharged. As any smartphone owner knows, batteries don’t hold charge as well the older they get, and home storage options are not immune to this problem. Typically, the batteries have a warranty which will define how many total kWh the battery is guaranteed to produce over a set period. For example, the Powerwall 2 is rated for 37,800 kWh over its 10-year warranty period. That works out at 10.36 kWh average capacity – quite a lot lower than the advertised 14 kWh capacity.
To compare batteries, we need to put them on a level playing field. The most common way is price per warrantied capacity. For example, the Powerwall 2 has a 37,800 kWh warrantied capacity, and costs (without install) $8750 on the Tesla website. Dividing the cost by the capacity gives us a price of $0.23 per kWh. Down below we have included the same figure for other batteries, which makes them easily comparable.
The other aspect of the ratings is how the power is delivered. For example, a 14 kWh battery can’t supply all 14 kW in a single hour – that’s just how the ratings are written. There is another rating of how much power can be delivered each hour – typically a lower continuous figure, and a peak figure. For example, the Powerwall 2 can supply 5kW continuously, and 7kW peak for 10 seconds. So, it could run a 2kW heater, a 2.4 kW air-conditioner, and still delivery another 0.6 kW to run your TV, lights and other small appliances. The higher peak rating helps handle small surges, such as the extra power used when a refrigerator turns on.
How Much Battery Capacity Do I Need?
The available storage options vary in capacity, from small through to large. Sizing to your usage is important though, because any unused capacity is wasted savings. For example, the Tesla Powerwall 2 has a 14 kWh (10.36 kWh average real world) capacity. My own home power usage is relatively small – about 7 kWh per day. So I would be unable to use the entire capacity – it’s simply too large for my needs. In comparison, LG Chem’s RESU3.3 has a 3.3 kWh capacity, which would nicely handle my peak power use in the evening. Depending on the battery and system, it’s relatively easy to expand the capacity later on by adding more batteries.
To get a very accurate idea of how your power use is spread across the day, the best bet is some sort of monitoring device. From there you can calculate how much power is used from sunset to sunrise, and size your battery accordingly.
Based on my own power monitoring, a rough rule of thumb is battery storage capacity equal to half your daily use. You can find out exactly how much you use per day by checking your bill – if there is no breakdown, divide the total kWh used by the number of days in the billing period. For those who maximise their evening and overnight use, it’s possible to use ~70% of daily power use from a battery.
[referenced url=”https://www.gizmodo.com.au/2017/04/the-coolest-smart-home-innovations-in-2017/” thumb=”https://www.gizmodo.com.au/wp-content/uploads/sites/2/2017/04/iStock-543047254.jpg” title=”The Coolest Smart Home Innovations In 2017″ excerpt=”Let’s take a look at how home automation and new tech like Tesla battery storage, smart thermostats, grid credits and smart meters are revolutionising our power consumption. Which also has a positive impact on both the environment and our bank accounts.”]
What About Solar?
Home battery storage needs to be charged, either using solar, or off-peak power. It’s even possible to incorporate both, but that’s a complex issue you would need to speak to an installer about. Mostly though, households charge the Powerwall with solar – either from a new installation, or from their existing solar panels.
For a new install of both solar and a battery, an inverter to connect your solar panels to the battery, and the battery to your house and the grid are included in the install. Older existing solar systems already have an inverter, but chances are it can’t interface with the battery and will need to be replaced. Not all existing solar installs will be large enough to charge a high capacity battery, so a solar upgrade might also be needed.
There are also exciting new developments in solar roof technologies, where each roof tile includes a solar panel. The idea is that when homeowners need to repair or replace their roof, doing so with a solar roof then produces electricity which can be used or sold to offset the cost of the roof.
Tesla has just opened pre-orders for a solar roof product, and while there is not yet Australian pricing, we recently did a basic breakdown of the economics. The short of it is that for now solar roof products are much more expensive than buying a traditional roof and solar panels. Of course, there are benefits such as aesthetics, and the prices will likely drop in the future to competitive levels.
[referenced url=”https://www.gizmodo.com.au/2017/05/get-the-most-out-of-your-solar-panels-this-winter/” thumb=”https://www.gizmodo.com.au/wp-content/uploads/sites/2/2017/04/iStock-540961960.jpg” title=”Get The Most Out of Your Solar Panels This Winter” excerpt=”With shorter days, more cloud cover and the sun shining at a different angle, it feels like a foregone conclusion to lose up to a third of your solar system’s usual output. But don’t despair too quickly — there are things that can be done to make sure your panels continue operating as efficiently as possible all through the winter.”]
Battery Types
Thanks to the emerging electric car industry, Lithium-ion batteries have seen rapid improvements as well as cost reductions, and are used in most battery storage systems. They offer the lowest prices, but lose capacity over time and while it’s rare, can catch fire and explode.
Another type of battery technology is called Flow Batteries, which uses a pumped liquid to chemically store the energy. Flow batteries are currently more expensive and don’t last as long, but have better storage, safety, extreme temperature handling and refurbishment characteristics.
Quite rare are Sodium Nickel Chloride batteries, which are more expensive and have a lower lifespan, but handle temperature extremes well, have a low fire risk and are easily recyclable.
Until fairly recently, most battery storage systems used Lead Acid battery technology for its (at the time) lower cost. But the batteries have limited lifespan, are bulky and heavy, can be a fire risk and are easily affected by temperature.
For those concerned about the safety aspect, you can find more information in the PDF report from the Clean Energy Council.
Getting The Most From Battery Storage
Adding a storage battery is really only part of the equation – what you do with it is just as important. An underappreciated aspect of the battery storage technology is that it gives a way for users to track, and more importantly, change their usage habits. Especially as time of day power billing becomes more common, large savings can be had by simply using electricity in smart ways.
Sure, it’s possible to get many of the benefits by tracking power use with relatively inexpensive tech, but not many people choose to do so. So while it’s possible to change power use habits on your own, if installing battery storage is what makes you actually do it, then that’s a big incentive.
Another big factor is effectively using excess solar power, which can have a huge impact on savings. While generated solar not used to charge a battery can be sold back to the grid, the better option is to simply use the electricity directly.
The problem with that is that in general, peak generation is during the middle of the day. But some households have high power uses for items such as pool pumps, which can be timed to run during the day. Other smart home products allow scheduling and remote control of appliances, such as running dishwashers and clothes dryers during the day, heating water, or having your air conditioning run for a few hours in the afternoon to pre-cool a hot house in summer.
As battery storage becomes more popular, other companies are launching complementary technology that gives further benefits. For example, Reposit Power has a system that learns your usage patterns and helps manage your solar and battery.
Even better, in times of peak demand you can even sell excess power from your battery back to the grid, for up to $1 per kWh. So for those who love to explore new tech and get hands on with the management, there will be plenty of opportunities going forward to maximise the benefits of home battery storage.
[referenced url=”https://www.gizmodo.com.au/2016/01/tips-and-tech-to-make-your-home-energy-smart/” thumb=”https://i.kinja-img.com/gawker-media/image/upload/t_ku-large/vilth0shqvnxvw2yswpp.jpg” title=”Tips And Tech To Make Your Australian Home Energy Smart” excerpt=”Turn off the lights when you’re not in the room, unplug devices on standby and run appliances at off-peak power times — we’ve heard all these tips for lowering your power bill before. With all the power-saving apps, services and gadgets that are now on the market, there are so many more options for making your home energy smart.”]
Going Off-Grid
For many households, fixed line charges are a very large portion of their power bills. So why not save even more money, and go off grid entirely? This is a great concept, and can work very well in rural areas where the cost to have mains power installed is very high.
But for a typical suburban home, the cost would be around 3 times that of just a battery storage system, due to needing extra capacity to handle long periods of bad weather. There can be issues with having enough space for the needed solar panels.
[referenced url=”https://www.gizmodo.com.au/2015/10/disrupting-australias-power-supply-your-homes-future-on-or-off-the-grid/” thumb=”https://www.gizmodo.com.au/wp-content/uploads/sites/2/2015/08/shutterstock-204444520-1080.jpg” title=”Disrupting Australia’s Power Supply: Your Home’s Future On (Or Off) The Grid” excerpt=”The recent announcement of Tesla’s Powerwall made waves for its huge potential to change the way we use — and generate — electricity, but did you know that Australian consumers have already started changing the way our country creates and consumes power?”]
The Bottom Line
Home battery storage is awesome, and the technology is well worth investing in as a whole. On a personal level, the economics are still a decent way off it being a no brainer investment for most households. That said, there are loads of non-economic benefits, especially changing usage habits, which can make home battery storage tech worthwhile.
Our advice would be to crunch the numbers for your specific situation and go from there. For those keen to get involved, a large solar array now can be a better investment, and make it easy to add a battery storage module in the future when prices drop.
A great resource for further reading is Solar Choice, which has a huge amount of information about batteries, solar and power costs in different states.
Home Battery Storage Options
We have broken down the available storage options below, with key stats, as well as stand out features. While some are possible to buy directly from manufacturers, for most people an installer is needed. There are loads of different companies offering complete packages, including with solar arrays.
We have not included every single possible battery option – just the ones that are the most affordable, easiest to buy, or have the most unique features. We used the excellent figures put together by Solar Quotes, who have a comprehensive list of every single available option.
Tesla Powerwall
One of the most well-known battery storage systems, it’s also the cheapest for the capacity. The Powerwall is a compact all in one unit, and includes a battery inverter, but not a solar inverter. It has excellent efficiency and a solid warranty.
- Price: $8750
- Visit: tesla.com/en_AU/powerwall
- Capacity: 14 kWh
- Price per warrantied kWh: $0.23
- Battery Type: Lithium Ion
- Power Output: 5 kW continuous, 7 kW peak (10 seconds)
- Efficiency: 90%
- Warranty: 10 Years
- Size: 115 x 75 x 15cm
- Weight: 125 KG
Enphase AC Battery
Designed to be easy to install and upgrade, the Enphase system uses compact, lower capacity modules. This means it’s easy to size to your specific needs, and add more capacity down the track. It has an excellent round trip efficiency, but a relatively low power output per battery. Enphase are also working on upgraded microinverter technology for each solar panel, which improves efficiency and makes future solar panel upgrades easier.
It’s also worth noting that Enphase is facing some major financial and market challenges and has undergone restructuring to remain competitive. That doesn’t mean the tech is bad, but worth considering before shelling out for a battery storage system.
- Price: $2000 (installed)
- Visit: enphase.com/en-au/products-and-services/storage
- Capacity: 1.2 kWh
- Price per warrantied kWh: $0.48
- Battery Type: Lithium Ion
- Power Output: 260W per module
- Efficiency: 96%
- Warranty: 10 Years
- Size: 39 x 32.5 x 22cm
- Weight: 25 KG
Redflow ZCell
This Aussie company has developed a flow battery system, which is a physically safer chemistry compared to Lithium Ion. It is bulkier and heavier though, and has a lower round trip efficiency. The ZCell offers a fairly competitive price for the capacity, and is a technology to keep a close eye on as it’s developed further. More: This Solar Power System Lets Your Timeshift Your Energy From Day To Night.
- Price: $12,600
- Visit: redflow.com
- Capacity: 10 kWh
- Price per warrantied kWh: $0.35
- Battery Type: Zinc Bromide Flow
- Power Output: 3kW continuous, 5kW peak
- Efficiency: 80%
- Warranty: 10 Years
- Size: 115 x 100 x 50cm
- Weight: 290 KG
GCL E-KwBe 5.6
You might not have ever heard of this company, or it’s battery, but you probably will in the future. While it still can’t compete with the Powerwall 2, the GCL is very affordable. It’s built by a Chinese company, has decent specs and warranty, and is available from Australian suppliers. The lower capacity models may suit smaller homes, and more can be added later to upgrade the system.
- Price: $3,650
- Visit: gclsi.com
- Capacity: 5.6 kWh
- Price per warrantied kWh: $0.30
- Battery Type: Lithium Ion
- Power Output: 3kW continuous
- Efficiency: 95%
- Warranty: 7 years
- Size: 53 x 70 x 17cm
- Weight: 47.5 KG
LG Chem RESU 10
While we have included the specs for the largest 10 kWh battery, the LG Chem series also has a 6.5 kWh battery, and a 3.3 kWh battery, albeit for a higher cost per warrantied kWh. The batteries are particularly compact, can be joined together for larger capacities, have excellent efficiencies, and reasonable warranties.
- Price: $8,800
- Visit: lgchem.com/global/ess/ess/product-detail-PDEC0001
- Capacity: 10 kWh
- Price per warrantied kWh: $0.30
- Battery Type: Lithium Ion
- Power Output: 5 kW continuous, 7 kW peak (3 seconds)
- Efficiency: 95%
- Warranty: 10 years
- Size: 48 x 45 x 23cm
- Weight: 75 KG
Deep Cycle Systems
Built by an Australian company, these batteries are available in 10 Kwh (specs below) and 5 kWh systems. The round-trip efficiency is very good, and the price per warrantied kWh is quite competitive. One factor that makes the batteries stand out is the high peak power output.
- Price: $9,998
- Visit: deepcyclesystems.com.au
- Capacity: 10 kWh
- Price per warrantied kWh: $0.27
- Battery Type: Lithium Ion
- Power Output: 5.12 kW continuous, 10.24 kW peak.
- Efficiency: 98%
- Warranty: 10 Years
- Size: 78 x 55 x 22cm
- Weight: 100 KG
ELMOFO E-Cells ALB52-106
Designed and assembled in Australia, these batteries have a solid price, great specs and a unique name. While they offer a very high peak output, the lower capacity number of warrantied kilowatts hours mean the E-Cells are relatively high priced.
- Price: $8,190
- Visit: e-cells.com.au
- Capacity: 5.5 kWh
- Price per warrantied kWh: $0.51
- Battery Type: Lithium Ion
- Power Output: 5kW continuous, 40 kW peak
- Efficiency: 96%
- Warranty: 10 Years
- Size: 37 x 32 x 23cm
- Weight: 41 KG
But Are Home Battery Storage Systems Worth It?
There are many solar and battery storage companies, as well as media articles, that promise these systems will pay for themselves in under 10 years, or even shorter time periods. The vast majority of these claims are false, and only work if you don’t include key factors about battery storage, such as efficiency losses.
Furthermore, many of the claimed returns are bolstered by a large solar array, which would actually save more money if used without the battery storage. For those looking for more information (and a second opinion, don’t take our word as gospel), a great resource is Solar Choice, who attempts to answer the same question.
Another key factor overlooked is the opportunity cost – it’s all well and good to spend $10,000 on a battery and solar setup, but what could that money be doing instead? For example, for many homeowners, that money could be savings ~$500 a year in interest if it was left in a home loan offset account.
There is also often the claim that power prices will increase over time, and more money can be saved in the future. But with solar and battery storage prices rapidly dropping, electricity companies that significantly raise prices won’t be able to compete. There are claims that power prices are already rising, but the Climate Institute crunched the numbers, and they suggest that in Australia, electricity prices are around the same as 25 years ago.
All of that said, there are real world situations where the economics of battery storage do stack up, and it’s only getting better as time goes on. While not yet common, we are also likely to see ‘lease’ type arrangements, where installers take on the upfront cost, in return for some of the savings.
Of course, there are many reasons why people want to buy these sorts of systems aside from just the economics. Battery storage tech in Australia is currently in the early adopter phase, and the more people who get on board now, the faster it will become even cheaper. The future of power generation is a smart, fault tolerant distributed generation and storage network, which is a very exciting thing to be part of.
There is also potentially a large environmental benefit (though the pros and cons of that are beyond our scope here) which is a very important aspect for the future of our planet, and species.
Calculating For Yourself
Last year we took a fairly in depth look at the first Powerwall installed in Australia. You can read about it here, or follow the owner’s Blog. Also check out Solar Choice’s calculator page, which has some handy tools to help out.
No calculation will be perfect and various simplified assumptions need to be made. Because it has plenty of numbers available, we are going to use the Tesla Powerwall 2 as an example. We have made the same calculations with other battery storage units below. To be conservative, we assume a desired ‘payback’ time to break even of 10 years – it’s only after this point you will save money. We also assume no maintenance costs and take a very simplified approach to opportunity cost.
The Powerwall 2 is rated for 13.5 kWh usable capacity, and at least 70% of that remaining after 10 years. That means the average available capacity over this period is 10.4 kWh per day, or 37,800 kWh total. Efficiency losses mean around 10 kWh is available in real world use, which we assume is fully used each day. If we assume an install cost of $11,000, then each kWh produced costs around $0.30.
Now we need to charge the Powerwall. Off-peak power costs vary, but around $0.10 per kWh is a safe figure. Calculating the cost of charging from solar gets quite complex, once you factor in power directly saved during the day, feed in tariffs, opportunity cost and payback of the purchase. Handily, the numbers roughly average out around the $0.10 mark per kWh, though can be lower for very large solar arrays.
So our Powerwall 2 costs $0.30 per kWh to pay for itself, plus another $0.10 per kWh to charge it — $0.40 kWh total.
Most households who would install battery storage are owned not rented, and have a mortgage. If we assume a 5% interest rate (which is historically quite low, and likely to increase), then the increased interest payments costs from the $11,000 install price cost around $0.07 per kWh, if it’s repaid over the 10-year period.
That brings us up to $0.47 per kWh. In real world use the Powerwall won’t always be 100% used, which increases its lifespan, but reduces the daily savings. Assuming only a slight underuse (such as when holidaying each year etc), we end up with a figure of around $0.50.
So unless your average household power costs is more than $0.50 per kWh (for comparison, mine is $0.23) then you won’t break even in less than 10 years.
If we assume the Powerwall works fine (but continues to slowly drop capacity) for 20 years with no maintenance cost, we can do the same calculations again. There are a lot of variables, but it works around at around $0.30 per kWh.
So is it worth it, economically? Perhaps in the right circumstances, but the best bet is to wait a little as the technology improves and prices drop. In the meantime, set up power monitoring, learn about your usage habits, and save money though reduction.
[referenced url=”https://www.gizmodo.com.au/2017/04/what-role-will-gas-play-in-australia-by-2050/” thumb=”https://www.gizmodo.com.au/wp-content/uploads/sites/2/2017/03/iStock-92287654.jpg” title=”What Role Will Gas Play In Australia By 2050?” excerpt=”Do you still use a gas stove to cook your dinner every night? You’re not alone. Almost 70 per cent of Australian households today use gas to heat their homes, cook their food and provide reliable hot water. But as we move into a dramatically changing energy landscape with increasingly critical environmental concerns to consider, we have to ask. what role will gas play in a renewable-focused future?”]
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