Home battery storage is the ultimate way to become self-sustainable, but is it financially viable? We have a look at exactly how batteries work and whether they’re right for you.
Batteries and you
A home battery storage system involves storing all of the unused energy produced from your solar PV system so that you never have to purchase electricity from the grid again.
The rising demand to become self-sufficient means that battery storage prices are dropping quickly. In Australia, last year was the best year for home battery storage and 2018 is expected to be even better.
It makes sense to get battery storage now if you want to step off the grid or in the event of blackouts. However, when does it become financially the best option? The answer is when the purchasing of battery storage actually reduces the payback of your solar system instead of lengthening it.
An investment or simply worth it?
At the moment the lowest battery storage prices are $750 per kilowatt-hour (kWh) of storage capacity. That number needs to come down to around $300 kWh of storage capacity to see a significant return on investment when purchasing batteries.
However, paybacks could be much faster if tactics such as tariff arbitrages are introduced. While we are getting closer to this turning point, what to look at right now is whether a battery system will pay for itself before the warranty is up.
Residential batteries tend to be lithium, which have a warranty of ten years but will almost always last for much longer, though there’s no guarantee they will. Therefore you should purchase a battery system that will break even over its guaranteed warranty period.
Now or soon
While right now batteries might mean just breaking even, it’s only a matter of time before that changes and serious returns can be made. Remember that’s purely from an investment standpoint, so if your goals are energy independence and reduced electricity bills then batteries do make sense for you right now.