What can you expect to save off your electricity bill by installing a battery? What are the other financial benefits that battery storage can provide your household – apart from direct bill savings?
These are burning questions for anyone thinking about getting a solar battery. And there’s no doubt that, for a long time, most people have discounted batteries as too expensive. The received wisdom has been to wait until prices become more affordable.
But that’s changing now. With skyrocketing electricity prices, falling feed-in tariffs, generous government rebates and greater competition, the economic justification for a home battery is getting stronger all the time.
On this blog we explore the typical electricity bill savings most Australian family homes could expect from installing a battery. We’ll also run through the other – less obvious – financial benefits of solar battery storage that are important to factor into any cost/benefit calculation.
On this post:
- How much could I save off my annual electricity bill by installing a solar battery?
- What are the other financial benefits of home battery storage?
How much could I save off my annual electricity bill by installing a solar battery?
A typical family home with a solar battery with at least 10 kilowatt hours of usable storage will save between $700 and $1,000 a year on their electricity bill.
How did we calculate this?
In this section, we’ll show you how to work out the bill savings you could achieve for your home with battery storage. This will depend on the following factors:
- The size battery you install
- The difference between your grid electricity rate and the solar feed-in tariff
- How many times you charge and discharge the battery every day
Let’s take each in turn.
Battery size is determined by the amount of usable power stored in the battery which is expressed as kilowatt hours or kWh. Most home solar batteries are between 10kWh and 14kWh in size.
So what size battery is right for your home?
To work this out, you need to know your total average daily electricity usage (in kilowatt hours) and how that is split between daytime and evening/night usage.
Let’s assume your home uses 20 kilowatt hours of electricity in a 24 hour period. Of that, 8 kilowatt hours is used during daylight hours and 12 kilowatt hours is used once the sun’s gone down.
That would mean you need a battery with 12 kilowatt hours of usable battery storage capacity.
You would also need at least 6.6kW of solar panels to charge the battery and cover your daytime electricity use.
The difference between your grid electricity rate and the solar feed-in tariff
The amount you save with a battery is the difference between your grid electricity usage rate and your solar feed-in tariff.
Let’s assume you pay 27 cents per kilowatt hour for grid electricity, and you’re paid 5.2 cents per kilowatt hour for any surplus solar electricity you export to the grid.
The difference is 27 cents/kWh – 5.2 cents/kWh = 21.8 cents/kWh
This means that the amount you save by using battery power instead of grid power is 21.8 cents/kWh.
What this also demonstrates is the higher electricity prices rise, and the further feed-in tariffs fall, the more you can save with battery storage.
How many times you charge and discharge the battery every day
Typically, most households cycle their batteries once a day. However, if you are away for long periods, your battery won’t be charging and discharging on a daily basis. This means you won’t be saving as much as you could from having a battery.
On the other hand, some batteries are designed to cycle more than once a day without shortening the warranty period. If you can charge and discharge your battery more than once a day, you may be able to save more on electricity. However, to make this work you may need to install a bigger solar panel system to provide additional charging capacity.
Doing the maths
To work out your average annual bill savings with a home battery here’s what you do:
1/ Take the size of your solar battery
For example: 10 kWh
2/ Multiply it by the average number of charges/discharges every day
For example: 10 kWh x 1 charge/discharge per day = 10
3/ Multiple the above result by the difference between your grid rate and solar feed-in
For example: Grid usage rate (27c/kWh) – solar feed-in tariff (5.2c/kWh) = 21.8c/kWh
21.8c/kWh x 10 = $2.18 average bill savings per day
4/ Multiple this result by 365 (i.e., number of days in the year)
$2.18 x 365 = $795.70
There you have it …. Your annual bill savings with a battery!
What are the other financial benefits of home battery storage?
Other financial benefits that owning a battery can provide include:
- Earn money from your battery power by joining a Virtual Power Plant Program. Rates paid for battery power are generally much higher than the solar feed-in tariff
- Reduce your transportation costs – by using your stored solar energy to charge your electric car(s)
- Slash your hot water heating costs – by using your solar energy to run an energy efficient hot water heat pump system
- Avoid loss of income – if there’s a power outage lasting several hours or days (relevant if you work from home and purchase a battery that has full blackout protection)
- Avoid food loss – in the case of a power outage (i.e., use the battery to keep your fridge and freezer running as usual)
- Avoid the risk of fire damage to your property – relevant if you rely on electric-driven water pumps and you don’t have a generator
There are also benefits relating to health, safety, and security of having a guaranteed source of power for your home. For example, guaranteed lighting in the event of a blackout which will help make your family safer.
How do you calculate the value of these benefits?
That will come down to the priorities and lifestyle of each household. But what’s clear is that, in many cases, it’s likely to be these ‘softer benefits’ that tip the balance in favour of buying a battery sooner, rather than later.
Contact us for a battery quote
If you’d like to know the costs and benefits of battery storage for your home, get in touch. Based on your electricity usage and your requirements, we can recommend the best size battery for your home and provide you with a detailed quotation showing the costs and savings.
We can also let you know what battery rebates you may be able to apply for – and other opportunities such as joining a government-supported Virtual Power Plant Program. And for those who may be interested, we can also arrange low cost solar finance.