Powerwall 2.0

The huge furore in South Australia over energy security and the challenge by Silicon Valley entrepreneurs to provide enough battery storage to avoid power blackouts at record low prices has ricocheted around the world.

But the move to domestic energy storage is already well underway nationwide and the market is expected to treble in size in 2017, according to a report from SunWiz.

SunWiz managing director Warwick Johnston said most of the demand for batteries was driven by recent blackouts in South Australia, and consumers who were “sick and tired” of being “powerless” in relation to their energy companies and bills.

“There are a lot of wealthy people now getting a complete solution,” Mr Johnston said.

Many people with existing solar PV that are now experiencing “bill shock” from the drop in feed-in tariffs are also adding storage.

Because of the price of batteries, buyers have tended to be well-off households with some money in the bank.

The majority pay up-front, though Mr Johnston said there are some finance options emerging.

Mr Johnston said he expected to see prices for batteries go down this year, but whether it would be a step change driven by supply and demand or a sudden drop is unclear.

For example, he said Tesla halved the price of batteries almost overnight when it made its announcement about the Powerwall 2 last year.

According to the report the battery market is set to treble the 6750 installations carried out in 2016.

It found that in 2016, 70 per cent of solar customers wanted batteries, but only five per cent of installs actually included them.

Around 250 installations nationally were for distribution network service providers or commercial projects, with the remaining 6500 residential.

NSW had the highest number of installations at 33 per cent of the total, with Queensland not far behind at 29 per cent. South Australia had only 675 installations. Tasmania had none at all.

Government programs in Adelaide and the ACT offering subsidies for storage would form only a small part of this growth, Mr Johnston said.

The ACT Next Generation

Storage scheme has so far financed subsidised battery storage for 200 homes in 2016, and a further 600 are due to be completed by the end of August 2017.

A third phase of the program is due to see storage rolled out to over 5000 more homes, financed by the new Crookwell 2 wind farm being built near Goulburn and the Hornsdale wind farm Stage 3 in South Australia.

An Adelaide grant scheme for batteries has so far seen around 100 installations and a second scheme by energy retailer AGL in SA around another 100.

The market research was conducted by surveying battery manufacturers, wholesalers and retailers, along with analysing databases of installations and projects, and public announcements.

The analysis included an estimate of payback times for solar and storage, calculated against main grid energy prices.

South Australia showed the fastest payback at between seven and eight years, whereas Brisbane’s relatively low energy prices gave the longest payback. Nationally, the average is around 10 years.

The report also showed that the energy use profile of the consumer and solar owner is a major factor in determining the speed of payback, with higher energy use and greater consumption of stored solar electricity showing faster returns.

The battery discharge strategy also plays a role, particularly where the consumer is on a time of use tariff.