Are Solar Batteries Worth It?

With electricity prices continuing to climb and feed-in tariffs dropping across Australia, more homeowners are asking whether adding a battery to their solar system makes financial sense. The short answer? It depends on your specific situation – but for many Australian households, the maths is finally starting to work in favour of battery storage.

Before diving into complex calculations, let’s start with a quick assessment. Answer these three questions:

1. Is your average electricity bill over $500 per quarter?
2. Do you have an existing solar system larger than 5kW?
3. Does your area experience more than two power outages per year?

If you answered “yes” to two or more, a battery is likely a strong financial contender for your home.

Here’s how to calculate whether a solar battery makes financial sense for your specific situation:

• Find your total kWh usage on your latest quarterly electricity bill
• Divide this number by 90 to get your daily average
• Example: 1,800 kWh quarterly ÷ 90 days = 20 kWh per day

Use this formula:

Annual Savings = (Daily kWh stored × Peak electricity rate × 365) – (Same kWh × Feed-in tariff × 365)
Example: If you store 10 kWh daily, your peak rate is 35c/kWh, and your feed-in tariff is 7c/kWh:

• Savings from not buying peak power: 10 × $0.35 × 365 = $1,277.50
• Lost feed-in credits: 10 × $0.07 × 365 = $255.50
• Net annual savings: $1,277.50 – $255.50 = $1,022

If you’ve already invested in solar panels, you’re halfway there. Adding a battery makes the most financial sense when your feed-in tariff is low (under 8c/kWh) and your peak electricity rate is high (over 30c/kWh). This allows you to store cheap solar energy instead of selling it for pennies, then use it to avoid buying expensive grid power in the evening.

• Large families using significant power in the evening
• Homes with pool pumps, electric hot water, or air conditioning
• Areas with frequent power outages
• Households with feed-in tariffs under 8c/kWh

• Small households that use most power during the day
• Homes with high feed-in tariffs (15c/kWh or more)
• Renters or those planning to move within 5 years

The most common battery size for a standard Australian home with a 6.6kW solar system is around 10kWh. This size typically covers evening energy usage and provides backup for essential appliances during an outage.

Mistake #1: Oversizing
Buying a battery that’s too large means you’ll never fully discharge it, which destroys your return on investment. A 20kWh battery for a household that only uses 8kWh overnight is wasted money.

Mistake #2: Forgetting “Usable Capacity”
A 10kWh battery may only have 9kWh of usable capacity due to depth of discharge limitations. Always check this specification rather than the headline capacity.

“What if my usage is high in winter but low in summer?”
Solution: Size for your average usage, not your absolute peak. This ensures the best year-round financial return. You can always supplement with grid power during extreme periods rather than buying an oversized battery that sits half-empty most of the year.

Most modern lithium-ion solar batteries are warrantied for 10 years and designed to last for a certain number of “cycles” (a full charge and discharge). A quality battery, like a Tesla Powerwall, should last between 10 to 15 years before its capacity degrades significantly.

While a battery warrantied for 10,000 cycles used once per day could theoretically last over 27 years, the 10-year time-based warranty is the more realistic benchmark for financial planning. Factor this into your payback calculations.

Australian climate affects battery lifespan. Batteries in hot climates (like Northern Queensland or Western Australia) may degrade slightly faster than those in temperate climates (like Tasmania or Victoria). Proper installation with adequate ventilation can minimise this effect.

While there’s no single federal rebate for batteries, several states and territories offer significant incentives. These can dramatically improve your payback period.

• Solar Victoria offers rebates up to $2,950
• Interest-free loans available up to $8,800
• Eligibility: Combined household income under $210,000

• NSW Home Energy Saver Program: interest-free loans up to $15,000, plus discounts up to $4,000 for lower-income households. This expanded the earlier Empowering Homes scheme, lifting both the loan cap and the income threshold.
• Peak Demand Reduction Scheme (PDRS) battery installation rebate of $1,600 to $2,400, plus Virtual Power Plant (VPP) incentives

• Battery Booster program: Grants of $3,000 for eligible households
• Additional $1,000 for low-income households

• Home Battery Scheme: Subsidies up to $2,000
• Additional VPP incentives available

For many Australian households in 2025, the answer is increasingly “yes” – but only if you do your homework first. With electricity prices expected to continue rising and feed-in tariffs remaining low, the gap between what you pay for power and what you earn from solar exports will likely widen, making batteries more attractive over time.

Use the calculations in this guide to determine your specific payback period. If it’s under 10 years and you plan to stay in your home, a battery is likely a sound investment. Factor in the peace of mind from blackout protection and potential future electricity price increases, and the value proposition becomes even stronger.

Remember, the best battery system is one that’s properly sized for your needs, installed by a certified professional like Skyline Solar, and takes advantage of available rebates. Start with your electricity bill, run the numbers, and make an informed decision based on your unique circumstances.