WA readies for the home battery boom

By Ruth Callaghan

The WA Government’s announcement in April that it would help subsidise residential solar batteries was met with overwhelming expressions of interest, quickly exceeding the 20,000 places initially earmarked for the initiative.

The $387 million announcement outlined plans for rebates of $5000 for Synergy residents and $7500 for Horizon Power residents to purchase and install a home battery (rebate figures based on a 10kWh battery), along with interest-free loans of up to $10,000 to support take-up.

Solar batteries capture excess solar power generated during the day for use at night or on overcast days. But with as many as half of homeowners with solar PV panels interested in adding a battery, the Government risks becoming a victim of their own success.

More than 23,000 Western Australians reportedly expressed interest in the Cook Government announcement, filling the planned quota before the scheme was due to commence. So the scheme has been reworked, taking advantage of the Federal Government’s $2.3 billion Cheaper Home Batteries commitment, which offers a similar form of support.

How the battery subsidy scheme will work

The two subsidy schemes have now been combined in WA, allowing far more households to take up the offer.

“Over 20,000 residential property owners have registered interest in the scheme, which would have exhausted the original commitment of battery rebates,” says a spokesperson for Energy Policy WA, the government area responsible for managing the rebate.

“The scheme has been extended to 100,000 households — five times the number proposed under the original scheme.”

Under the combined scheme, which officially launched July 1, the WA Government will fund up to $1300 (Synergy customers) and $3800 (Horizon customers) to an expanded number of households, with the Australian Government topping up the discount in the cost of the battery by buying small scale technology certificates (STCs) for each battery. The calculation of STCs and therefore the size of the discount will be based on the usable capacity of the battery and the year of installation.

While this sounds complicated, a similar process has been used to discount the cost of PV panels and should translate to a combined saving of approximately $5000 for a 10kWh battery installed in Perth — about 30 per cent of the normal cost. The rebates and certificate sale will be administered by the battery vendor unless a household opts to sell the STCs themselves.

And for those who cannot take up the scheme, there are still benefits. By reducing the total demand in the electricity system at peak times, the initiative should limit the need to replace large-scale capacity in the network while increasing the stability of the grid.

Demand continues to rise

Even before the rebates kicked in, the demand for residential solar storage had been climbing.

It is estimated 300,000 home batteries have been installed in Australia in the decade since the technology became widely available, although that is still just a fraction of the 4 million homes that have rooftop solar PV.

Battery and solar market analysts Sunwiz say 72,500 residential batteries were installed in 2024, some 27 per cent higher than in 2023, with much of that growth in the retrofitting market.

That’s because, although about 11 per cent of new PV systems sold nationally include a battery, according to Sunwiz, only 3 per cent of existing systems have a battery connected.

As these are people already convinced of the benefits of solar, many are now looking to add batteries to boost their current domestic system.

“The WA Residential Battery Scheme is expected to build on the momentum of rooftop solar adoption in the South West Interconnected System (SWIS), where around 40 per cent of households have a solar system installed,” says the Energy Policy WA spokesperson.

“To date, around two-thirds of households expressing interest in the scheme are planning to add a battery to an existing solar system.

“There will also be some uptake from households upgrading existing rooftop solar systems when installing a battery, and the scheme will also encourage new solar installations paired with a battery.”

To get the rebate, read the fine print

To be eligible to get the combined WA and Federal Government rebate for residential batteries there, are some key requirements.

The battery must be installed on a residential property located in WA that has an electricity account with Synergy or Horizon Power. The property can be a home business provided it is predominantly used for residential purposes.

There are some exclusions, such as residential properties owned by Government or mining and resources companies.

Both the battery and its inverter must also appear on a list of approved equipment, and the retailer and installer must be registered with the WA scheme. Both rebates require a minimum battery capacity of 5kWh and 100kWh, while the Federal Government rebate specifies a maximum capacity of 100kWh. Buying other kinds of batteries or using non-registered installers makes the purchase ineligible for rebates.

The WA rebate will be capped for batteries with a capacity above 10kWh, while the Federal rebate will apply to a maximum usable battery capacity of 50kWh (at a 2025 value of $372 per additional kWh).

WA also requires all households with batteries to participate in a virtual power plant (VPP) arrangement, in which the household batteries can be coordinated by Synergy or Horizon Power to act as a single source of shareable energy.

As part of Synergy’s VPP, the Battery Rewards program could see householders paid twice the standard amount for exporting their stored electricity to the grid if called on during a period of peak demand. Synergy says it could pay 70 cents per unit exported to the electricity system, compared to the ordinary feed-in tariff price of about 32 cents.

With the coal-fired Collie power station due to close in 2027 and the final stages of Muja Power Station by 2029, opening residential battery storage as a source of system-wide energy is seen as an economic and efficient way to accelerate the shift away from fossil fuels.

What about cost?

Of course, even with a rebate, batteries aren’t cheap.

The rebate should reduce the total cost of a battery by about a third, but the amount householders pay will still depend on factors such as the capacity of the battery selected, whether the installation is complex, whether it needs a new inverter or if it is being retrofitted to an existing PV system.

Battery capacity is measured in kilowatt hours (kWh) and as systems get bigger, the price per kWh tends to come down.

The Australian Energy Council estimates larger batteries can cost around $1000 per kWh, while smaller batteries can cost as much as $2000 per kWh.

For the typical household battery of 13-15kWh, large enough to attract both State and Federal rebates, the cost might be another $2000 to $4000, plus a further $2000-$3000 for a hybrid inverter if a new one is required.

Another factor is the type of battery. Those made with lithium iron phosphate or LFP cells, such as those made by BYD and Sonnen, tend to be marginally cheaper than those made with lithium nickel manganese oxide or NMC cells, such as the Tesla Powerwall.

In both cases, lithium-ion batteries tend to have long lives and are suitable for a range of temperatures but still need to be stored and installed correctly to reduce the rare risk of fire. They will eventually need to be recycled, however programs able to handle large lithium batteries are still in their infancy.

A final issue to consider is the warranty offered by the battery manufacturer and the number of battery cycles. Every time a battery is charged then discharged, that is a cycle. Most batteries are designed to last about 10 years or more, able to have a cycle every day or around 3650 cycles.

But if a battery is frequently drained rather than just discharged, or the number of cycles increases, it can deteriorate more quickly, and its performance can diminish over time.

Warranties represent the usable capacity guaranteed by a manufacturer after a certain number of cycles. A manufacturer might offer a warranty for 10 years or the equivalent number of cycles, whichever is lower, or it might offer what is known as an end-of-warranty capacity rating, guaranteeing 60 or 70 per cent of the battery’s usable capacity will be retained for 10 years.

Consumer groups warn it is easy to confuse warranties, so this is an area to pay particular attention to when comparing products and prices.

Is it worth it?

Determining whether a residential solar battery is right for you takes a bit of calculation.

If you are a household that uses most of its electricity during the day, you might not need to store significant energy overnight — and thus a battery won’t offer the savings you are seeking. If your electricity use is normally low, adding a battery might also provide limited benefits. And if you get good returns from selling solar back to the grid, you might find this source of income declines as you divert spare solar energy to the battery instead.

But for households that draw from the grid, particularly in peak evening times when solar can’t cover the demand, adding a battery can reduce energy bills. The ‘payback’ period represents the number of years it takes for the savings on your bill to cover the cost of the battery.

The Climate Council estimates it now takes Australians 8.3 years to recover the cost of purchasing a battery (as of 2024), down from a 10-year payback period in 2022, and 19 years in 2016. As demand grows and technology improves, this payback period should continue to reduce.