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How to buy the best solar battery storage

What you need to know about adding battery storage, such as the Tesla Powerwall, to your home's solar panel system.

solar storage battery

Home battery storage is a hot topic for energy-conscious consumers. If you have solar panels on your roof, there's an obvious benefit to storing any unused electricity in a battery to use at night or on low-sunlight days. But how do these batteries work and what do you need to know before installing one?

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How do home solar batteries work?

The concept of home battery storage isn't new. Off-grid solar photovoltaic (PV) and wind electricity generation on remote properties has long used battery storage to capture the unused electricity for later use. Storage batteries are increasingly popular with new solar installations, and it's possible that within the next five to 10 years, most homes with solar panels will have a battery system.

A battery captures any unused solar power generated during the day for later use at night and on low-sunlight days. Installations that include batteries are increasingly popular. There's a real attraction to being as independent as possible from the grid; for most people it's not just an economic decision, but also an environmental one, and for some it's an expression of their wish to be independent of energy companies.

If your solar panel array and battery are large enough, you can run your home substantially on solar power. Using electricity from your battery can be cheaper per kilowatt-hour (see Terminology) than using electricity from the grid, depending on the time of day and electricity tariffs in your area.

According to solar analytics company Sunwiz, there are about 110,000 home storage batteries currently installed in Australia, and about 9% of new solar installations in 2020 included a battery.

See some of our other articles on home batteries:

How much does a home solar battery cost?

Costs vary significantly for solar batteries, but generally, the higher the battery capacity, the more you can expect to pay.

Here are some typical battery costs for some common nominal capacity sizes (these generally cover just the battery – installation is extra).

  • 6kWh: $4500–9600
  • 10kWh: $9800–14,000
  • 13kWh: $8000–18,000

The lower-end prices tend to be for a battery pack only (cells plus battery management system). Higher-end prices often mean that the battery system has a built-in battery inverter and other integrated components as well. When getting quotes, make sure it's clear whether the cost of a new inverter and extra electrical work are factored in.

It can be more cost-effective to buy a battery as part of an entire new solar panel system package than to retrofit it to an existing system, especially if the existing system is several years old; it may need substantial upgrading to accommodate the battery.

Are home solar batteries a worthwhile investment?

For most homes, we think a battery doesn't make complete economic sense yet. Batteries are still relatively expensive and the payback time will often be longer than the warranty period (typically 10 years) of the battery. 

Currently, a lithium-ion battery and hybrid inverter will typically cost between $8000 and $15,000 (installed), depending on capacity and brand. As the electricity market changes over the next few years, and (hopefully) battery prices improve, it may mean that in two or three years it will make good economic sense for the average home to include a storage battery with their solar PV system.

Results from an Australian-based three-year trial of 18 storage batteries are not encouraging, with a high failure rate and difficulties with manufacturer support in some cases.

Nevertheless, for some homes, a storage battery can make economic sense. Households with high power consumption that are savvy about using their solar-generated and stored power can make the battery pay for itself in less than 10 years. 

And many people are investing in home battery storage now, or at least ensuring their solar PV systems are battery-ready. Batteries are often seen as being less about the pure economics and more about being as independent from the grid as possible.

We recommend you work through two or three quotes from reputable installers before committing to a battery installation. The results from the three-year trial mentioned above show that you should make sure of a strong warranty, and commitment of support from your supplier and battery manufacturer in the event of any faults.

Rebates, subsidies and Virtual Power Plants

Government rebate schemes, and energy trading systems such as Reposit, can definitely make batteries economically viable for some households. Beyond the usual Small-scale Technology Certificate (STC) financial incentive for batteries which applies across Australia, there are currently rebate or special loan schemes in some states and territories:

NSW: Empowering Homes solar battery loan offer

VIC: Solar Homes Program

SA: Home Battery Scheme

ACT: Next Gen Battery Storage Program

NT: Home and Business Battery Scheme

Rebate schemes change from time to time, so it's worth checking the Federal Government energy website to see what's available in your area.

There are also various Virtual Power Plant (VPP) programs in most states which can help reduce the cost of a battery. By joining a VPP program, you agree to make the stored energy in your home battery available to the VPP operator who can then use it to supply the grid in times of high demand.

In return, you're paid a subsidy, which might be in the form of reduced energy bills, a rebate towards buying the battery, or even free solar and battery installation. But note that even joining a VPP program won't always guarantee that your battery pays for itself.

SolarQuotes maintains a list of current VPP programs.

Don't forget the feed-in tariff

When you're doing the sums to decide whether a battery makes sense for your home, remember to consider the feed-in tariff (FiT). This is the amount you're paid for any excess power generated by your solar panels and fed into the grid.

For every kWh diverted instead into charging your battery, you'll forgo the feed-in tariff. While the FiT is generally quite low in most parts of Australia, it's still an opportunity cost you should consider. In areas with a generous FiT (such as the Northern Territory's FiT for legacy solar installations), it's likely to be more profitable to not install a battery and just collect the FiT for your surplus power generation.

Home insurance

Your solar panel system (panels, inverter, and battery if you have one) is part of your house, and as such it's covered by your home insurance. However, you should make sure your home's insured amount is increased to cover the replacement cost of the solar panel system. See our guide to solar panels and home insurance.

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Grid-connected vs off-grid

There are four main ways your home can be set up for electricity supply.

Grid-connected (no solar)

The most basic set-up, where all your electricity comes from the main grid. The home has no solar panels or battery.

Grid-connected solar (no battery)

The most typical set-up for homes with solar panels. The solar panels supply power during the day, and the home generally uses this power first, resorting to grid power for any extra electricity needed on low-sunlight days, at night, and at times of high power usage.

Grid-connected solar + battery (aka "hybrid" systems)

These have solar panels, a battery, a hybrid inverter (or possibly multiple inverters), plus a connection to the main electricity grid. The solar panels supply power during the day, and the home generally uses the solar power first, using any excess to charge the battery. At times of high power usage, or at night and on low-sunlight days, the home draws power from the battery, and as a last resort from the grid.

For more on different types of inverters, how they work and their pros and cons, see our guide to buying a solar inverter.

Off-grid

This system has no connection to the main electricity grid. All the home's power comes from solar panels, and possibly some other types of power generation as well, such as wind. The battery is the main power source at night and on low-sunlight days. The final back-up is usually a diesel-powered generator, which may also kick in when there's a sudden high demand for power (such as when a pump starts up).

Off-grid systems are usually much more complex and expensive than grid-connected systems. They need more solar and battery capacity than a typical grid-connected system and may also need inverters capable of higher loads to cope with peak demands. Homes that run off-grid need to be particularly energy-efficient and the load demand needs to be well-managed throughout the day. 

Off-grid systems generally only make sense for remote properties where a grid connection isn't available or would be prohibitively expensive to install.

What happens in a blackout?

For most grid-connected systems, having a battery doesn't necessarily protect you in the event of a blackout. You may still lose all power to your home, despite having solar panels producing power and a charged battery ready and waiting.

This is because grid-connected systems have what's known as "anti-islanding protection". During a blackout, the grid and any engineers working on the lines must be protected from "islands" of electricity generation (such as your solar panels) pumping power unexpectedly into the lines. For most solar PV systems, the simplest way to provide anti-islanding protection is to shut down entirely. So, when it senses a grid blackout, your solar PV system shuts down and you have no household power at all.

More sophisticated inverters can provide anti-islanding protection during a blackout, but still keep the solar panels and battery operating so that the house has some power. But expect to pay a fair bit more for such a system, as the hardware is more expensive and you may need more solar and battery capacity than you think to run the house for a few hours during a blackout.

You should probably choose to allow only critical household circuits to operate in that situation, such as the fridge and lighting. That might require extra wiring work. A storage battery is likely to be drained very quickly if it also has to run things such as a pool pump or underfloor heating, which can draw a lot of power.

Battery specifications

These are the key technical specifications for a home battery.

Capacity

How much energy the battery can store, usually measured in kilowatt-hours (kWh). The nominal capacity is the total amount of energy the battery can hold; the usable capacity is how much of that can actually be used, after the depth of discharge is factored in.

Depth of discharge (DoD)

Expressed as a percentage, this is the amount of energy that can be safely used without accelerating battery degradation. Most battery types need to hold some charge at all times to avoid damage. Lithium batteries can be safely discharged to about 80–90% of their nominal capacity. Lead-acid batteries can typically by discharged to about 50–60%, while flow batteries can be discharged 100%.

Power

How much power (in kilowatts) the battery can deliver. The maximum/peak power is the most that the battery can deliver at any given moment, but this burst of power can usually only be sustained for short periods. Continuous power is the amount of power delivered while the battery has enough charge.

Efficiency

For every kWh of charge put in, how much the battery will actually store and put out again. There's always some loss, but a lithium battery should usually be more than 90% efficient.

Total number of charge/discharge cycles

Also called the cycle life, this is how many cycles of charge and discharge the battery can perform before it's considered to reach the end of its life. Different manufacturers might rate this in different ways. Lithium batteries can typically run for several thousand cycles.

Lifespan (years or cycles)

The expected life of the battery (and its warranty) can be rated in cycles (see above) or years (which is generally an estimate based on the expected typical usage of the battery). The lifespan should also state the expected level of capacity at the end of life; for lithium batteries this will usually be about 60–80% of the original capacity.

Ambient temperature range

Batteries are sensitive to temperature and need to operate within a certain range. They can degrade or shut down in very hot or cold environments.

Types of solar battery

Lithium-ion

The most common type of battery being installed in homes today, these batteries use similar technology to their smaller counterparts in smartphones and laptop computers. There are several types of lithium-ion chemistry. A common type used in home batteries is lithium nickel-manganese-cobalt (NMC), used by Tesla and LG Chem

Another common chemistry is lithium iron phosphate (LiFePO, or LFP) which is said to be safer than NMC due to lower risk of thermal runaway (battery damage and potential fire caused by overheating or overcharging) but has lower energy density. LFP is used in home batteries made by BYD and Sonnen, among others.

Pros

  • They can give several thousand charge-discharge cycles.
  • They can be discharged heavily (to 80–90% of their overall capacity).
  • They're suitable for a wide range of ambient temperatures.
  • They should last for 10+ years in normal use.

Cons

  • End of life may be a problem for large lithium batteries. 
  • They need to be recycled to recover valuable metals and prevent toxic landfill, but large-scale programs are still in their infancy. As home and automotive lithium batteries become more common, it's expected that recycling processes will improve.

Lead-acid, advanced lead-acid (lead carbon)

The good old lead-acid battery technology that helps start your car is also used for larger-scale storage. It's a well-understood and effective battery type. Ecoult is one brand making advanced lead-acid batteries. However, without significant developments in performance or reductions in price, it's hard to see lead-acid competing long-term with lithium-ion or other technologies.

Pros

  • They're relatively cheap, with established disposal and recycling processes.

Cons

  • They're bulky.
  • They're sensitive to high ambient temperatures, which can shorten their lifespan.
  • They have a slow charge cycle.

Flow battery

One of the most promising alternatives to lithium-ion, this type uses a pumped electrolyte (such as zinc bromide or vanadium ions) and chemical reactions to store charge and release it again. Redflow's ZCell battery is the main flow battery currently available in Australia.

Pros

  • They can be discharged to 100% of their capacity and have no residual discharge so they won't lose charge over time.
  • They don't lose capacity over time.
  • They operate well in high ambient temperatures.
  • They're relatively easy to recycle.
  • They should last for 10+ years.

Cons

  • Being new technology, they're relatively expensive compared to lithium-ion.
  • They don't tolerate cold well (below 15°C).
  • They require frequent maintenance which takes them temporarily out of service.

Other types

Battery and storage technology is in a state of rapid development. Other technologies currently available include hybrid ion (salt water) batteries, molten salt batteries, and graphene supercapacitors. None of these are in common usage at this stage.

How long do solar batteries last?

In principle, most solar battery types should be able to last 10 years or so under normal usage and if not subjected to extreme temperatures. That is, they should be able to last as long as their warranty period, which for most models is 10 years.

However, there isn't enough market data to show whether modern solar batteries typically last that long in real-world home installations – recent generations of batteries have only been around for a few years. 

Lab testing of battery durability and lifespan has not been encouraging. A recent solar battery trial in Australia has indicated a high rate of failure. Of the 18 batteries in that trial, only six operated without any major problems. The other 12 batteries either had operational problems, or failed and needed to be replaced, or failed and couldn't be replaced (for example because the manufacturer was out of business or would no longer support that product).

However, all that said, from looking at consumer reviews on a variety of websites, it seems that most households with storage batteries are happy with them so far, especially with the major brands. Some customers report problems with battery failure or with customer support from the supplier, but in most cases it appears that the batteries are performing as expected.

Future changes to the electricity market

The electricity grid in Australia wasn't originally designed to cope with large numbers of homes exporting solar power into it. There are proposals for how to modernise the grid and manage it more effectively and fairly, and these include a possible surcharge – or "solar tax" – to owners of solar PV systems who want to sell their excess power to the grid. What's this all about, and does it mean a storage battery becomes a better option?

Terminology

Watt (W) and kilowatt (kW)

A unit used to quantify the rate of energy transfer. One kilowatt = 1000 watts. With solar panels, the rating in watts specifies the maximum power the panel can deliver at any point in time. With batteries, the power rating specifies how much power the battery can deliver.

Watt-hours (Wh) and kilowatt-hours (kWh)

A measure of energy production or consumption over time. The kilowatt-hour (kWh) is the unit you'll see on your electricity bill because you're billed for your electricity usage over time. A solar panel producing 300W for one hour would deliver 300Wh (or 0.3kWh) of energy. For batteries, the capacity in kWh is how much energy the battery can store.

BESS (battery energy storage system)

This describes the complete package of battery, integrated electronics, and software to manage the charge, discharge, DoD level and more.

Acknowledgement

Our thanks for the assistance of ITP Renewables in producing this guide. We'll be working with them again on a future product review of storage batteries.