Solar battery incentives in 2020 state-by-state
In this article, we will cover the current solar battery incentives in Australia for 2020.
Below we’ve broken down each state and the solar battery incentives available in each region.
Solar battery incentives in Queensland
Solar power systems can reduce energy bills for Queensland homes and businesses, delivering low-cost electricity without producing carbon emissions. However, solar panels still have one key limitation: depending on sunlight to produce electricity. They are not like diesel generators, which can deliver power at any time. However, when solar panels are complemented with battery storage, their electricity output can be stored for nighttime or for cloudy days.
Solar batteries are still expensive as of 2020, but the International Renewable Energy Agency (IRENA) estimates a cost reduction of 60% or more by 2030. In Australia, many state governments offer incentive programs to make batteries more affordable.
The Queensland government has a program that offers grants and interest-free loans for batteries. Unfortunately, the program is currently inactive, and the last application period ended on 30 June 2019. However, battery incentives could become available again, considering the potential applications of energy storage.
Loans and grants for solar batteries in Queensland
During the last application period in 2019, the Queensland government offered three types of incentives for solar panels and batteries:
- Interest-free loans for solar panel systems.
- Interest-free loans and grants for battery systems.
- Interest-free loans and grants for solar panel systems with batteries.
This program is not accepting new applications currently, but we will describe how it works for informational purposes. Being familiarized with solar battery incentives is useful in case they become available again.
The incentive for battery systems consisted of a $3,000 grant and a loan up to $6,000, bringing the total incentive amount to $9,000. The repayment period for the interest-free loan was 10 years. A $9,000 incentive is enough to cover the full cost of many battery systems available in the market. Even for premium products like the Tesla Powerwall, the incentive covers a large portion of upfront costs.
Loans of up to $10,000 were available when installing both solar panels and batteries, which results in a maximum incentive of $13,000 (the grant stays at $3,000). Since solar panels are involved in this case, the incentive can be combined with Small-scale Technology Certificates from the national incentive program (Small-scale Renewable Energy Scheme).
In both cases described above, homeowners could apply for the grant and loan, or only the grant. On the other hand, businesses were only eligible for the grant. To apply for the incentive, electricity consumers must choose the batteries from a list of eligible products, and have them installed by an eligible supplier.
One condition for getting the solar battery incentives in Queensland was accepting to participate in the government battery inspection regime. Electricity consumers who receive the incentive may be selected at random for a safety inspection, but there is no cost involved. All inspections are scheduled in advance by contacting the battery owners, and there are no surprise visits.
If you need further information about solar battery incentives in Queensland, please visit the official program website from the QLD government.
When to use solar battery systems in QLD
There are several aspects to consider before installing batteries. Solar panels produce the same amount of electricity with or without batteries, but you can manage their production more effectively when batteries are available.
For example, if you pay time-of-use electricity rates, you can charge batteries with solar panels and use them when the highest kWh prices are being applied. Also, if your electricity provider charges high kWh prices and pays low feed-in tariffs, you can charge batteries with surplus solar generation instead of selling it cheap.
Instyle Solar can provide an accurate estimate of the savings you can achieve with solar panels and batteries, based on your available space, and also the local sunshine and electricity tariffs.
Solar battery incentives in New South Wales
Battery systems achieve synergy with solar panels, by adding a chargeable power source that can be used at any time. Solar panels alone can reduce power bills effectively, but they cannot produce electricity on demand: they stop generating power at night, and their output is greatly reduced with clouds. This limitation can be removed with solar batteries or other energy storage systems.
New South Wales has the Empowering Homes program, one of the most ambitious incentive programs for solar batteries in Australia. Empowering Homes has the goal of deploying 300,000 battery systems in NSW during the next 10 years, and the program currently offers interest-free loans of up to $14,000. These loans can greatly reduce the upfront cost of a battery system, and homeowners can pay with the savings achieved.
According to the NSW government, Empowering Homes could add 3,000,000 kilowatt-hours of storage capacity to the local grid, while drawing investments of $3.2 billion. A large number of batteries also makes the grid more reliable, since their combined storage capacity can balance sudden peaks in electricity consumption or solar power generation. Currently, most power grids have a limited capacity to handle sudden peaks in supply or demand.
Find out more information about the Empowering Homes Program by visiting their website.
Interest-free loans for solar batteries in New South Wales
Empowering Homes offers two types of solar battery loans in 2020, which are interest-free. This provides significant savings compared with borrowing the same amount from a bank. The two loan types are the following:
- Up to $9,000 for adding batteries to existing solar power systems.
- Up to $14,000 for new solar panels and batteries.
These loans are available for consumers who own the property they inhabit, with a total household income below $180,000 per year. Like with any loan, the credit record of applicants is reviewed before approval.
When solar panels are installed along with the battery system, the Empowering Homes loan can be combined with Small-scale Technology Certificates. For example, a 6-kW solar power system in Sydney gets 91 STC as of 2020, which can be traded for around $3,500. If this incentive is combined with an interest-free loan, the total incentive is $17,500.
Solar battery loans from the Empowering Homes program will eventually be available in all of NSW. However, the first stage of the program in 2020 is for specific areas of the Hunter region: Cessnock, Dungog, Lake Macquarie, Maitland, Mid-Coast, Muswellbrook, Port Stephens, Singleton and Upper Hunter. The program will gradually open in other regions, covering the entire state of NSW.
If you need further information about solar battery incentives in New South Wales, please visit the official Empowering Homes website from the NSW government.
When to use solar battery systems in NSW
Like with any investment decision, a feasibility analysis is recommended before purchasing solar batteries. In general, they achieve the highest savings under the following conditions:
- You are charged time-of-use electricity tariffs, which reach the highest value during peak demand hours.
- Your electricity provider pays a low feed-in tariff for exporting surplus solar generation to the grid.
For example, if you are paid a feed-in tariff of 15 cents/kWh and the peak rate is 50 cents/kWh, each kilowatt-hour stored in batteries becomes more valuable by 35 cents. As the price difference decreases, the potential savings from batteries are diminished.
To get a better idea of how much you can save with a solar battery system, a professional assessment of your home is recommended. A qualified provider like Instyle Solar can analyse your electricity consumption and site conditions, to calculate your potential savings.
Solar battery incentives in Victoria
Victoria has the widest variety of solar incentives in Australia as of 2020, and this includes incentives for battery systems. An eligible solar battery can get an incentive of up to $4,838, and this can be combined with the nationwide incentive for solar panels (Small-scale Renewable Energy Scheme).
The program that manages solar incentives is called Victoria Solar Homes. In addition to the incentive for battery systems, the program offers incentives for solar panel and solar water heaters. There are also interest-free loans, specifically for solar panels. Considering the high electricity prices of Australia, solar technologies achieve major savings for homeowners, and these incentives help afford them.
Battery systems achieve synergy with solar panels, providing an electricity source for times when there is no generation. Solar panels can reduce your power bills by themselves, but you get less electricity with cloudy weather and no production at night. However, when solar panels are combined with batteries, the system can deliver electricity 24/7.
If you install an eligible solar battery in Victoria in 2020, you can earn an incentive of up to $4,838. This amount is subtracted from the upfront cost of battery systems, reducing their payback period. The main requirements to get the incentive are summarized below:
- Having a household income below $180,000 per year, and an assessed property value below $3 million.
- The home must have a solar panel system with at least 5 kW of capacity, to ensure that clean power is used to charge battery systems.
- The Distributed Network Service Provider (DNSP) must pre-approve the solar battery.
- Homeowners must use products on the VIC government’s Approved Battery List.
Solar Homes Victoria provides a list of eligible zip codes for the 2020 solar battery incentive. The incentive program is for homeowners who live in the property they own, which means that rental properties are not eligible.
As of 2020, a solar power system with a minimum capacity of 5 kW gets 65 Small-scale Technology Certificates (STC) in Melbourne. Since each STC sells for $35-$40, this system would get an incentive of $2,275-$2,600. Adding solar batteries to the system, the $4,838 incentive leads to a total incentive of over $7,100. Larger solar power systems with batteries can get even higher incentives since the STC incentive applies for up to 100 kW of capacity.
Homeowners who get the incentive must agree to participate in the Solar Victoria Audit program, which means they can be selected for a random safety inspection. However, there is no additional cost involved – you must simply collaborate with the inspectors if selected.
If you need further information about this solar battery incentive in Victoria, please visit the Solar Battery incentive website from the VIC government.
When to use solar battery systems in VIC
Battery systems can increase the savings of solar panels by storing their surplus production for later use. Electricity retailers normally pay a feed-in tariff for your surplus kWh, but this is less than the retail price they charge you. For this reason, the electricity that is stored and used later is worth more than electricity sold to your power company.
Victoria has a minimum feed-in tariffs for electricity retailers, which are required by law. The minimum feed-in tariffs depend on the electricity plan:
- Single-rate clients are paid a minimum FIT of 12 cents/kWh. On 1 July 2020, this decreases to 10.2 cents/kWh.
- Varying-rate clients are paid a minimum FIT of 9.9 cents/kWh in off-peak hours, 11.6 cents/kWh in shoulder hours, and 14.6 cents/kWh in peak hours. On 1 July 2020, these rates are reduced to 9.1, 9.8 and 12.5 cents/kWh, respectively.
Electricity retailers in Victoria can choose to pay more than the minimum FIT, and finding tariffs above 20 cents/kWh is possible. However, retail electricity prices are higher than the FITs, and some households are charged over 30 cents/kWh. This increases the value of stored electricity: 1,000 kWh are only worth $120 with the minimum FIT, but they can save over $300 when energy storage is used.
Instyle Solar can analyze your electricity bills and property conditions, to determine your potential savings with solar panels and batteries. With the various incentives available in Victoria, these technologies become more affordable and you can achieve a quicker payback period.
Solar battery incentives in South Australia
South Australia has some of the highest electricity prices in the country, and some homes are charged over 40 cents/kWh. However, this also creates an excellent savings opportunity for solar panels and batteries. Among all states, South Australia has the highest solar battery incentives in 2020, making the technology more affordable.
The South Australia government is also developing a virtual power plant, which will combine solar panels and batteries in 50,000 homes into a single smart system. The virtual power plant will use distributed resources to simulate a conventional power station:
- The solar panel systems will have a total generation capacity of 250,000 kilowatts.
- The solar batteries will have a total storage capacity of 650,000 kilowatt-hours.
The virtual power plant will make the local grid more reliable, by reducing dependence on the centralized generation and using distributed energy resources.
South Australia is also home to the Hornsdale Power Reserve, a utility-scale Tesla battery with a power output of 100,000 kW and a storage capacity of 129,000 kWh. This battery system was the largest of its type in the world when it started operating in 2017 and is still among the largest.
Incentives for solar batteries in South Australia
The solar battery incentive program from the SA government is called the Home Battery Scheme. By offering incentives for home batteries, the program has the goal of connecting 40,000 energy storage systems to the local grid.
- The Home Battery Scheme offers an incentive of up to $6,000 per property.
- The normal incentive for households is $500 per kWh of storage, which means you need a 12 kWh battery to get the full incentive.
- Energy Concession Holders get $600 per kWh, which means only 10 kWh of storage are needed for the full incentive.
- Since the goal of Home Battery Scheme is having 40,000 battery systems connected to the SA power grid, homeowners cannot use the incentive to go off-grid.
The solar battery incentive applies once per property, and owners of multiple properties can get a incentive for each one. A tenant can claim the battery incentive with landlord approval, but the battery must stay in the property if the tenant moves.
Homeowners who will install solar panels and batteries can combine two incentives. While solar panels are covered by Small-scale Technology Certificates (STC), solar batteries are covered by the SA Home Battery Scheme.
As of 2020, a 10-kW solar power system in Adelaide gets 152 STCs from the national incentive program. Since each STC sells for $35-$40, the solar panels get an incentive of $5,320-$6,080. Assuming a system price of $16,000 before incentives, the net cost can be reduced to less than $10,000. If this solar installation includes at least 12 kWh of battery storage, an additional incentive of $6,000 is available. When both incentives in this example are added, the total incentive can exceed $12,000.
- If the total price of the solar power system and batteries is $30,000, the combined incentives reduce the net cost to $18,000 (40% less).
- Assuming annual savings of $5,000, the payback period is 3.6 years. For comparison, solar batteries still have a payback of over 15 years in many parts of the world.
The Clean Energy Finance Corporation (CEFC) from the Australian Government has provided a fund of $100 million to complement the Home Battery Scheme. This fund will be used to provide low-interest loans, which can be used for both solar panels and battery systems.
If you need further information about this solar battery incentive in South Australia, please visit the Home Battery Scheme website from the SA government.
When to use solar battery systems in SA
Solar batteries achieve the highest savings when you are charged a high kilowatt-hour price and are paid a low feed-in tariff (FIT) for your surplus generation. For example, if you are charged 40 cents/kWh and the FIT is only 10 cents/kWh, each kWh stored becomes 30 cents more valuable. In this case, you earn $100 from selling 1,000 kWh, but you save $400 if they are stored in batteries for later use.
Feed-in tariffs above 20 cents/kWh are available in South Australia, but consider that many households pay over 40 cents/kWh. This price difference between retail kWh prices and feed-in tariffs creates an opportunity to save with batteries.
Instyle Solar can conduct a professional assessment of your property and electricity bills, to determine how much you can save with solar panels and batteries. South Australia is currently one of the best places in the world to use these technologies: they save a lot due to the high electricity prices in SA, and there are incentives to help you with the purchase.
For 2021 solar incentives, visit our blog!