Overview of "Will the home battery boom slash power bills?"
This ABC News Daily episode (host Sam Hawley) interviews Tony Wood, Senior Fellow at the Grattan Institute, about Australia’s rapid uptake of home batteries, how distributed storage is changing system resilience, and what it means for wholesale and retail electricity prices as renewables scale up.
Key takeaways
- Home batteries are scaling rapidly in Australia: in the last six months households installed as many batteries as in the previous five years.
- Renewables (mainly wind and solar) plus storage supplied over 50% of the nation’s electricity in the last quarter—the first time renewables outpaced coal and gas nationally.
- Short-term wholesale prices fell sharply (around 40% year-on-year in that quarter), helping reduce retail bills, but long-term price movements are uncertain.
- Batteries improve household resilience (islanding/backup) and reduce peak evening demand, which can lower system costs if uptake is widespread.
- Transitioning to very high shares of renewables will require more transmission and storage; those costs partially offset cheap wind/solar generation. Coal closures can temporarily push prices up.
- Equity issues: households that can afford batteries benefit most; renters, low-income and public housing tenants risk being left behind unless policy addresses access.
Topics covered
- How extreme heat used to stress the grid (line fires, substations, coal station failures) and why recent heatwaves didn’t cause widescale blackouts.
- The role of rooftop solar + batteries in keeping homes powered during local grid outages (when configured for backup/islanding).
- Why storage matters: it shifts midday solar generation to evening peaks, reducing peak demand and the need for costly grid capacity.
- Government incentives: initial $2 billion rebate program (introduced in July) aiming to cut battery purchase price by ~30%, now expanded to $7+ billion with tiered support by battery size.
- Cost examples: household systems commonly cost up to $15,000–$20,000 before/after subsidies depending on size and configuration.
- System-level dynamics: increasing renewables lowers marginal generation costs, but retiring coal triggers needs for more transmission, storage, and flexible backup (currently gas), which can raise costs again.
- Timeline and limits: long-duration alternatives to gas (to cover multi-week low-renewable periods) likely 10–20+ years away.
Important numbers & facts
- ~4.3 million households have rooftop solar in Australia.
- ~200,000 consumers have taken up the battery rebate option so far.
- Renewables (wind + solar) exceeded 50% of electricity supply in the last quarter.
- Wholesale prices dropped ~40% year-on-year in that quarter (wholesale prices make up a meaningful portion of retail bills).
- Government target: 82% renewable electricity by 2030.
- Major coal plant Ararat (Eraring in NSW) extended operation by ~2 years to avoid reliability gaps.
Implications for power bills
- Short-to-medium term: more renewables + storage have reduced wholesale prices and can lower retail bills while existing coal/gas remain available to balance supply.
- Medium-to-long term: as coal plants retire and higher shares of renewables come online, additional costs for transmission, storage, and balancing services may offset generation savings; bills could settle near current levels rather than falling indefinitely.
- Local resilience gains: households with solar + batteries can avoid outages, reduce their own bills, and collectively lower peak system demand (saving money for all if adoption is broad).
Practical advice (for households and policymakers)
- For households considering batteries:
- Check eligibility for government rebates and the tiered support rules.
- Confirm the battery/system supports “islanding” if backup during outages is desired.
- Size the solar + battery system based on typical evening/night usage and weather patterns — some systems can provide multiple days of backup when large enough.
- Do a cost-benefit analysis, remembering upfront costs can be $15k–$20k before subsidy.
- For policymakers / community leaders:
- Focus on equitable access: renters, low-income households, and public housing need targeted programs so benefits aren’t concentrated among wealthier owners.
- Plan for transmission and long-duration storage investments alongside renewables to avoid reliability-driven coal life-extensions.
- Support community-scale microgrids or shared battery programs for remote/line-vulnerable towns.
Notable quote
- Tony Wood: “Storage is important in any sort of logistical system because what it does, it balances supply and demand. And that's why this is a really interesting revolution.”
Bottom line
Home batteries are already improving household resilience and contributing to lower wholesale prices during favourable periods. They can reduce peak demand and system costs if adoption grows, but getting to very high renewable shares will require substantial investment in transmission and storage. That makes long-term bill projections uncertain: prices are likely to fall in the near term but then recalibrate as the system evolves. Equity and careful planning will determine whether the benefits are broad-based.