The cost of retail electricity is a hot topic in Australia, exacerbated by more frequent and volatile weather events and a rapid shift from traditional fossil fuels towards renewables. Considering that residential solar panels have reached 20% penetration, and this is set to grow to 50% over time, we believe that they have reached ‘mainstream’ market adoption with steady growth in panel installations likely to continue. As such, the discussion now shifts to the installation of batteries which will further shift the energy supply mix toward renewables in Australia. With the price volatility of retail electricity, there is an increased focus by governments and households on different ways to cut costs across the energy supply chain, from distributors to end users. This report looks at how and when battery technology will be adopted and forecasts the potential impact this could have on the consumption of ‘grid’ electricity.

Contents

Key takeaways

Introduction

Residential battery storage market

• Uptake of solar panels in Australia
• Current uptake of batteries in solar homes

Value of residential batteries to solar households

• The rationale for batteries – time-shifting of electricity
• Reducing electricity bills

Key economic drivers of battery uptake

• Costs versus savings, and the payback period of batteries
• Current and expected level of retail electricity prices
• The declining cost of batteries
• Payback period of lithium-ion batteries

Key policy drivers of battery uptake

• Feed-In Tariffs
• State government renewable energy schemes

Solar PV and battery market outlook

• Implications for retail energy consumption in Australia

Conclusion

List of charts/tables

Figure 1. 5kW solar system price trends ($/W)

Figure 2. % of solar homes with concurrent battery installations in 2018

Figure 3. Consumption of stored energy on a typical summer day

Figure 4. National average representative residential retail electricity prices over time

Figure 5. Tesla Powerwall features

Figure 6. Investment payback periods for installing an integrated battery and solar PV system

Figure 7. Investment payback periods for retrofitted battery systems into existing solar panels

Figure 8. Payback period and ROI of a Tesla Powerwall 1 if prices decline

Figure 9. Policy and incentives for battery uptake across states

Figure 10. Solar PV and battery forecast to 2030

Figure 11. Sensitivity table showing % reduction in on-grid electricity consumption according to battery & solar PV
uptake