Battery Payback Periods

In the past, the cost of batteries has outweighed the benefits with the return on investment being impractical for the average household. Now, as technology has advanced and the market has expanded, batteries are continually decreasing in price becoming a desirable and practical purchase for Australians wanting to maximise energy savings and further reduce their bills.

Prices can range from around $2,000 to $20,000 + depending on the size, brand and functionality of the battery system.

But how long will it take for a battery to pay for itself?

While this will vary, the current estimated payback period for a typical residential battery is between 7-10 years and possibly lower if your eligible for Government incentives which assist in the upfront costs of purchasing battery storage. Whilst the payback period is forecast to shorten as battery prices gradually drop, for some the benefits of battery are worth investing in now. However it’s advised to do extensive research and speak to installers to ensure your return on investment is realistic and worthwhile.

If you were to install 5kWh of battery storage to your solar system with an estimated lifetime of 10 years (3,500 cycles) and made use of it each day you would be saving between $1 – $2 a day from not using energy from the grid, that’s roughly $365 – $730 per year although the capacity will slowly diminish over the 10 year lifespan of a battery.

Receive Obligation Free Quotes from installers and work out your payback periods!

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Understanding Batteries

Off-Grid Systems

For some households a battery system can be of great benefit and minimise a home’s reliance on the grid. However, it’s important to understand for a battery to be useful your solar system needs to be generating excess energy for the battery to store, which you can then use at night or when the sun is not out.

When selecting a battery, you’ll want to invest in a system that is most suited to your home and can drive the best return on investment (ROI). Despite a larger upfront cost, a higher quality battery may significantly increase your ROI.

    Battery systems start from $6,000 and costs can vary greatly based on the following factors:

  1. Cycle Life-Time

    The number of times a battery can fully charge and discharge.

  2. Battery Power (kW)

    How fast it can be charged or discharged.

  3. Storage Capacity (kWh)

    The maximum amount of energy a battery system can store.

  4. Battery Management System (BMS)

    An electronic ‘smart’ system that gathers data and manages the battery ensuring it does not overload or operate outside of its safe functioning zone..

  5. Inverter

    Battery systems require their own inverter if your solar system does not have a hybrid inverter.

  6. 'All-In-One Unit’

    A system which includes the battery, BMS and an inverter all in one unit.

  7. Warranty

    Length of time or cycles the battery system is under guarantee.

  8. Blackout Protection/Backup

    It’s important to note this is not a common feature of a battery system and could cost thousands of dollars to include. Blackout protection not only requires additional components but also a specialised installation and rewiring. For grid-connected homes, the cost for blackout protection can outweigh the benefit.

Additionally, if your purpose for adding battery is to go Off-Grid and become completely independent from the grid you will need to ensure your solar system can generate enough energy to power your home and your battery system is large enough to store this energy. For homes in metro areas going Off-grid is not cost effective and is only recommended for those in remote areas with limited access to the grid. Off-grid solar systems with battery start at approximately $30,000.