DRIVING OUR ENERGY FUTURE SERIES: Community batteries need a fundamental rethink. A positive step would be to allow corporate entities, local councils, schools, hospitals and places of worship, charitable organisations and owners corporations to own and operate mid-scale (community) batteries – not just the big energy companies (distributed network service providers), as is currently the case.
Battery storage is the yin to rooftop solar’s yang. Backed in by government support, household batteries are now widely understood to be an essential – and previously missing – component of a consumer energy powered transition away from fossil fuels.
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Thanks to technological advancements, a maturing domestic market and generous government rebates, home batteries are becoming increasingly affordable for many solar-powered households. But many Australians – including renters and strata residents – are still locked out of the benefits of consumer energy resources (CER).
As long as they have solar panels installed (or are planning to), owners’ corporations and landlords are eligible for the Cheaper Home Batteries rebate. However, there are often additional complexities to navigate, such as a lack of suitable roof space in high-rise apartment buildings and the split incentive between landlords and their tenants.
The community battery model has frequently been touted by energy distributors, energy retailers, and state and federal governments as an answer to these problems, with hundreds of taxpayer-funded projects across the country.
These mid-scale storage systems typically range from 50 kW to 5 MW in size, making them larger than home solar batteries, and smaller than most grid-scale batteries. Both solar and non-solar households (including renters and apartment residents) living near a community battery can choose to sign up through their energy retailer.
With estimated energy bill savings of just a few hundred dollars per year, this arrangement might make sense as a last resort option for households locked out of CER – not so much for solar owners.
Public good versus private gain
The Australian public should not be fooled by the name “community battery”, nor the pretty murals painted on them or the ribbon cutting ceremonies as they are brought online.
Many argue that the Australian public should not be fooled by the name “community battery”, nor the pretty murals painted on them or the ribbon cutting ceremonies, as they are brought online. Director of analysis and advisory at green energy markets, Tristan Edis, has criticised the model, stating that the term community battery is a misnomer and that these are grid-owned and operated assets that first and foremost serve monopolistic energy companies and their profits, rather than the communities themselves.
Community batteries are also expensive to install, making them not only a subpar solution for consumers but also an uneconomic use of taxpayer dollars.
Edis’s analysis showed that the average government grant given to each community battery project was around $1400 a kWh – with additional contributions from the DNSPs and retailers on top of this. For context, a household battery might cost $1000 a kWh to install – with the Cheaper Home Batteries rebate covering about 30 per cent of the total.
(To meet the co-contribution requirement, DNSPs and retailers used money from their innovation allowance, which then gets passed on to customers. Some networks have also opted to charge customers a monthly fee to use the community battery, even though taxpayers and energy consumers have largely covered the cost of installation, Edis says.)
State and federal funding models
Since April 2023, the Australian Renewable Energy Agency (ARENA) has committed $127 million in federal funding to roll out 342 community batteries across the nation. Round 1 of the program funded 20 DNSPs, energy retailers and government entities to build a total of 318 batteries, and on 1 July 2025, round 2 of the program opened with a $46 million pool of funding available with extended eligibility criteria.
Under the current round, businesses, not-for-profits and community organisations may submit a joint application with DNSPs and energy retailers. The catch is that successful applicants must commit to building at least 10 community batteries, potentially excluding applications from organisations that only require one or two.
A slightly better model is the Victorian government’s 100 Neighbourhood Batteries Program – open to educational institutions, local government authorities, co-operatives and not for profit organisations – as well as the “usual suspects”.
Under this program, the Salvation Army received funding to build 22 neighbourhood batteries across its sites, and is expected to see a financial return of $790,000 in energy bill savings and income. Other beneficiaries of this grant include Totally Renewable Yackandandah, YMCA Camping and the Country Fire Authority.
While the Victorian approach delivers real financial benefits to the community, the cost of installation compared to household batteries is still sky-high. Edis crunched the numbers and found that the average cost to install them was even higher than the ARENA-funded community batteries at $2000 a kWh.
Household batteries deliver greater financial gains
According to Endeavour Energy (NSW), their community battery customers are saving between $100 and $400 a year on their energy bills based on their solar use (after considering the $15 monthly subscription fee to use the community battery). Ausgrid’s Energy Storage as a Service community battery program – also located in NSW – saves customers about $200 per year.
In contrast, households with rooftop solar and a battery connected to a virtual power plant (VPP) could be saving five times as much – if not more. By the NSW government’s calculations, solar and a battery could turn a $1850 annual electricity bill into a mere $350. Many VPP-connected solar and battery households are benefitting from $0 energy bills, and some are even making a profit on top of their “nil bills”.
It’s a no-brainer: behind-the-meter household batteries are by far the more economic, sensible and straightforward option for households with solar – now more than ever with the government rebates available.
Designing a better model
For those households that are truly locked out of rooftop solar and household storage, joining a community or neighbourhood battery might be a sensible option to help reduce energy bills – if they live near enough to be able to access one that is. But for this to be an effective cost of living solution for households, the existing model must be made fairer for consumers.
A key improvement would be to enable different financial and ownership arrangements – for example, allowing the owners corporation of a high-rise apartment community to install a shared battery to help reduce energy costs for the residents – including any renters who live there.
Mid-scale storage solutions could also be utilised in urban commercial and industrial sites with high rooftop solar potential (such as large warehouses and storage facilities) – to allow more low-cost solar energy to be stored and then shared locally with neighbouring households during peak demand periods.
To make the existing community battery model more democratic, transparent and financially feasible, Solar Citizens is advocating for the following commitments:
- Community battery owners and operators should be held to stringent and nationally consistent regulations that aim to ensure financial benefits flow to consumers, including households and small businesses.
- No further state or federal funding should be provided to DNSPs, and existing government funded, DNSP-owned community battery projects should be disallowed from charging customers a membership fee.