Battery storage payback times – The facts and figures

Tesla’s Powerwall has reached Australian shores and we are taking calls every day from clients wanting to buy a solar PV system with batteries (or to install batteries to their current solar PV system).

The Powerwall, a home battery system designed to store power generated from solar panels, has attracted a “cult-like following”. Of course, Tesla is not the only company with a home battery storage solution… Samsung, LG, Benq and a host of others have products available now, with many more yet to be released. We will no doubt will see an explosion of new products in the next 3 years.

It’s widely believed that the Powerwall will pave the way for battery storage to become a regular household feature. This blog will dispel some myths about battery storage and give you the facts about Solar Batteries.

Battery storage FAQ’s

Q: “I want batteries so when there is a blackout I’ll still have power?”

A: Wrong, most modern battery systems need the grid to operate. Without expensive add on and re-wiring.

Q: “I would like to completely disconnect from the power company”

A: Again, most modern battery backup systems need the grid to operate. The cost of building a stand-alone, off-grid battery system that would give an average Perth home enough power to operate normally would take over 20 years to pay for itself, possibly a lot longer.

Q: “I want to run my air-con at night with my stored battery power”

A: The maximum output at any one time of the Tesla battery is 2000watts (steady supply). Others are in a similar range with Fronius having the highest output at 4500w. Most air-cons will exceed that figure, for example, a ducted air-con will draw around 6,000 to 10,000watts.

Modern battery systems are designed for “power shifting”, which means instead of sending your excess power back to the grid you can store it in the battery. Most of the battery storage systems currently available have a capacity of between 4 & 12 kWh.

How much will it save annually (best case scenario)

 Example 1:  5kW solar PV system + Tesla Battery

Being modest with our figures, let’s say you have a 5kW solar PV system (facing north with no shade) with a Tesla battery, 6.4kWh of storage. On average this system will generate around 22 units per day.

If you use 16 units of this power while the sun is shining, then 6 units go to the battery to use later. This means you are using all the power your system is producing.

Total savings are:

22 units (power used Inc. power fed to the battery) x 25.7c (Synergy A1 tariff Inc. GST) = $5.65 per day

Total annual savings = $2062 per year

Example 2:  5kW solar PV system (no battery)

Now let’s look at the same system without the battery. Still generating 22 units per day, instead of sending the excess 6 units of power to the battery, you now send it to the grid. Synergy pays 7.13c per unit for this unused electricity.

Total savings are:

16 units (power used) x 25.7c (Synergy A1 tariff Inc. gst) = $4.11

+ 6 units (fed to grid) x 7.13c (Renewable Energy Buy Back rate) = .43c per day

$4.11 + .43c = $4.54 savings per day

Total annual savings = $1657 per year

What is the payback time?

The next thing we need to do is consider the cost of the two systems to determine the Return on Your Investment…

So with the battery using this example, you save around $2062/year. However, when you take into account that the cost of a 5kW new system including the battery is around $16,000, the payback on the system with the battery is around 8 years. In comparison to a regular 5kW solar PV system (no battery) at around $6,000 which means the payback is around 3 years.

According to this graph (source: Solar Market 2015 Solar Survey), only approx 6.35% of Australians would be interested in a Solar battery payback period of around 8 years. Are you one of the 6.35%? Which category do you fit into?

In terms of how long it may take for Australians to install a battery storage system, 8.93% of those with solar who are interested in battery storage said they wouldn’t care what the payback period was.  According to the 2015 Solar Survey, “Investment bank UBS has predicted that battery storage for solar will be at a 5-6 year payback by 2020”, however as per above we are now offering systems with a payback of around 8 years… so it’s getting close.

The majority of Australian households and businesses would benefit from a traditional, upgradable solar PV system.  Research Analyst Cameron Kusher from RP Data said that “homeowners are moving less frequently”. Results show that the average Australian household period is 10.1 years. With a payback time of under 4 years, government incentives still in place, adding value to your home/business PLUS reducing your carbon footprint, there’s never been a better time to go solar. You can’t go wrong with solar at Clean NRG.

“We make it easy”…

This example is based on the power usage of a 4 x 2 family home, consisting of 4 people, in Perth, with air-con and a pool. Of course, these are sample figures, and everyone uses their power differently. All system prices quoted are your out of pocket expenses with all Government incentives deducted as of March 2016.  If you have any questions or suggestions please contact us any time, we’d be happy to do a cost comparison for you.