Last week, the Federal Government announced incentives for Australian companies to manufacture solar batteries and other critical solar energy components.

On Friday, the NSW Government said it will launch a new incentive to make household batteries more accessible and affordable for NSW residents.

The incentives are ramping up because, as a nation and a state, we want to achieve net zero emissions by 2050, which includes a 70% reduction (compared to 2005 levels) by 20235.

The NSW Government says households and businesses with solar panels on their roofs will be able to buy a cheaper, subsidised battery to store solar energy generated when the sun is shining.

This will help get the most out of their solar, by allowing them to use it around the clock. It will also reduce their energy bills and boost the reliability of the state-wide electricity grid.

However, one local solar energy expert believes this may be another pink batts experience because the incentives will bring out the cheapest products to market, which could cause more breakdowns and fires.

The new incentive is part of the Peak Demand Reduction Scheme and includes:

• Between $1600 and $2400 off the up-front installation cost of a household battery for homes and business with existing solar.
• For homes and businesses wanting to install solar, the incentive will be considered in the quote for a new solar and battery system installation.
• A $250 to $400 incentive for connecting a battery to a Virtual Power Plant. It can be claimed a second time, three years on.

By connecting batteries in Virtual Power Plants, households and businesses can collectively share capacity across the energy grid.

The incentives will be available from 1 November 2024 and will be accessed through approved suppliers, which will become accredited over the coming months.

The NSW Govt says expansion of the scheme follows extensive consultation with companies that specialise in the orchestration of household batteries, like Reposit Power.

Mike Haydon from the Off The Grid Shop, which specialises in selling and installing solar batteries to households and businesses on the Northern Rivers, is unconvinced this is the right option for NSW, and it could turn out to be another 'pink batts'.

A brief reminder that back in 2009, then-Prime Minister Kevin Rudd introduced a Home Insulation Program (HIP) to stimulate the economy. The HIP introduced a lot of unqualified installers into the market, which consequently saw three installers electrocuted and one dying of hyperthermia.

One of Mike's concerns is there will be an influx of cheaply made batteries from all over the world coming into the NSW market, which could lead to more housefires and more deaths. Even reputable suppliers, like LG, have recalled specific faulty lithium-ion batteries that can overheat and cause fires.

"I did some mystery shopping this week. Every single one of them said to me, if you find a better price somewhere else, I'll beat it by 500 bucks. They're so cheap anyway, so how do they make money? It's ridiculous. So what these companies will do, is drive the manufacturers to a price point because they like giving things away, for seven grand, let's say. so. They will try and drive it down as cheap as possible."

Another concern is the potential expense for someone to come in and inspect the installation before the grant is given. "Is the cost of the grant there to cover the cost of the inspection?," Mike said.

"I can't see how people are going to be better off waiting for the grant."

"At the end of the day, I think we need better quality installers because we're dealing with batteries, which can be dangerous, there's a lot of chunky stuff that does go on. So I think it is good, but I think the consumer is gonna be no better off out of pocket."

There is also, another potential solar grant coming from the Federal Government for July 1 and that is a $3,500 tax deduction of your tax return.

As the solar incentives pile up from all levels of government, it is difficult to make informed decisions as a consumer. How do you trust an installer?

Mike's advice is to check how long the company has been in business.

"A lot of the good installers won't recommend a cheap product because they know that if they go bust, they are responsible for the warranties. The cheaper companies don't care because they just liquidate the company every couple of years and start a new company. So they just void their warranties. I would say go with a company that has been around seven years, that's probably a good number, they've been through a financial crisis within the world in that cycle."

"There will be a lot of companies that go bust in the next couple of months with everything that's going on and especially this rebate, because everyone will wait until November now. So all these sales have been put on hold and been cancelled.

How would Mike incentivise the market so people would put up solar panels and, for those that do, install a battery, which can run a household at night?

"I would go back to what they did with the solar feed-in in the early days. The problem they're trying to solve is that they need more storage overnight; they're trying to reduce the peak demand overnight. They're trying to get excess power from these batteries to give to the grid in the peak times. And the problem is there is no excess energy at the time when they need it because people are consuming energy at that time, and they won't put big enough batteries in to feed back to the grid as well."

"So, what I think the best rebate would be is for people to be paid a dollar a kilowatt hour to feed back to the grid during the peak times. People should be paid higher rates to feed in from their batteries overnight."

Solar energy, its storage and usage at night is becoming a key component of cutting emissions as we head to 2050. However, as you read, this is a complicated pathway for the everyday News South Welshman to navigate.

Information on the NSW Government household battery incentive program is available online:http://www.energy.nsw.gov.au/batteries.

Further information

What is a Virtual Power Plant?

·         Virtual Power Plants group the power produced by rooftop solar and stored in batteries, so it can be released into the grid where and when it’s needed. 

·         Energy from Virtual Power Plants is released into the grid to address frequency and voltage imbalances, local disruptions or disturbances and keep the network stable. More information can be found online https://arena.gov.au/blog/what-are-virtual-power-plants-and-why-do-they-matter/.

What is peak demand?

·         Peak demand is when electricity usage is at its highest, such as in the middle of summer when millions of households turn on their air conditioners.

·         The electricity grid is designed to be capable to meet that peak demand.

·         If the level of peak demand can be lowered, we can reduce the amount of renewable energy infrastructure that needs to be built to keep the lights on.

·         Building only the infrastructure we need saves NSW money.