In Australia, the popularity of household battery storage systems is booming, driven by a combination of falling solar feed-in tariffs and escalating electricity prices. Last year, approximately 75,000 battery storage systems were installed, marking a striking 47% increase from 2023. This surge brings the total number of home battery systems across the country to over 320,000 as of now, according to solar energy consultancy SunWiz.
Among those embracing this shift is Kevin Wen, a resident of Sydney, who installed a battery storage system after becoming frustrated with declining energy buyback tariffs. "In 2022, I was receiving about 15 cents per kilowatt-hour for exporting my excess energy back into the grid. Now, that figure has fallen to just 3 cents," said Wen. This dramatic reduction made him reconsider how he utilizes solar energy.
Solar energy installations have provided numerous Australian households the opportunity to save on energy bills. Households can save about $1,500 per year with rooftop solar and an additional $1,000 with battery storage. Chris Williams, CEO of Natural Solar, which installs around 100 batteries weekly, commented, "The decreased feed-in tariffs have been a tipping point for many of my clientele. Power bill hikes have spurred unprecedented interest in battery installations.”
As power bills are set to increase 2-9% in July 2025, consumers are feeling the pinch. After recent price hikes were announced, Natural Solar reported a staggering 250% increase in battery inquiries. Williams attributes this surge to growing sensitivity regarding living costs, as households seek ways to offset rising expenses.
However, despite the growing interest in battery storage, uptake remains relatively low. Out of over 4 million Australian homes and businesses with rooftop solar, only one in twelve have adopted battery storage systems. The main hurdle? The average cost of a battery system, which hovers around $10,000, remains high, although prices have been falling steadily at a rate of 5-10% per year. This downward trend is expected to continue, enhancing the appeal of batteries.
Current modeling indicates that the payback period for combined solar and battery systems runs about 8.3 years, factoring in both subsidized and non-subsidized installations. Currently, battery subsidies are only available in New South Wales and the Northern Territory, with other regions like Victoria and Tasmania offering interest-free loans.
Industry experts such as John Grimes, CEO of the Smart Energy Council, are advocating for national subsidies to stimulate wider adoption. Grimes has proposed a subsidy rate of $350 per kilowatt-hour, which could bring down the cost of a typical 5kWh battery to approximately $3,000. He argues that such subsidies would allow households to harness cheaper solar energy during the day for nighttime use, easing the economic burden faced when energy prices spike.
Grimes further explains that the broader pursuit of 1 million solar batteries by 2030 could enable Australians to collectively save over $19 billion. "Not only does this benefit individual households, but the entire community also reaps rewards by alleviating pressure on the grid during peak pricing periods," he stated.
Kevin Wen recently benefited from a NSW government scheme that provided him a $2,000 reduction on his battery installation. He believes that the introduction of more impactful subsidies would incentivize even more households to invest in renewable energy installations. "If they want to promote green energy, it would greatly benefit everyone to increase the subsidies right now," Wen noted.
The recent federal budget, which allocated $3.5 billion in energy bill relief, is illustrative of government efforts to curb rising energy costs. This included a $300 rebate for households and $325 for small businesses. While these measures provided immediate relief, some experts argue that more sustainable support mechanisms are necessary.
Former RBA deputy governor Guy Debelle has voiced support for shifting government resources from temporary rebates to long-lasting solutions, suggesting that subsidies for solar installations would help households secure consistent energy savings over time. "The relief to household budgets is only temporary while they're receiving those cash payments. Redirecting this funding to enable solar panel and battery installations could provide lasting insulation from energy price fluctuations," Debelle stated.
He urged that any significant funding should prioritize low-income households, strata buildings, and landlords, reinforcing that investing in renewable energy could provide a more stable and affordable energy future. Debelle added, "Sun isn't subject to geopolitics, so it's not going to be affected by events like Russia's invasion of Ukraine," emphasizing the reliability of solar power.
Energy experts agree that enhancing and expanding subsidy programs, rather than merely relying on loans, will be essential to increasing the uptake of battery storage systems. While they acknowledge that many households are already overwhelmed by budget constraints, they stress that effective government action can pave the way for a more sustainable future.
As the debate surrounding battery storage continues, the conversation reflects an important crossroads in Australia's energy landscape. The country's push towards renewable energy sources must consider both economic viability and environmental integrity as household decisions ripple outward, influencing collective well-being across communities.
