On February 14, Dr Helen Haines, federal independent MP for Indi, introduced the Cheaper Home Batteries Bill 2022 (the Bill). The Bill, seconded by fellow independent MP Zali Steggall, seeks to cut the cost of residential battery storage systems like Tesla Powerwall by up to $3,000.
$3,000 is no small saving, indeed it could amount to approximately 20% on the total cost of a home battery storage system. And since a third of Australian homes have rooftop solar installed already, this saving would prove an enormous incentive to solar battery uptake.
What is more, we know that uptake drives down costs, as has been proved in the solar industry, so the surety of this Bill would only help to bring down the costs of home batteries further.
In her remarks on the Bill to parliament, Haines quoted analysis from Australian inventor and entrepreneur Dr Saul Griffith’s recently released “Big Switch: Australia’s Electric Future”, which found that a fully electric household would save around $5,000 in petrol costs, power bills and heating annually. With the extra saving provided by the Bill, a Tesla Powerwall is suddenly paying for itself a whole lot quicker.
What would The Bill do?
How will Haines’ bill make home batteries cheaper? It will do this by making batteries an eligible technology to create certificates under the Small-scale Technology Certificate (STC) scheme, otherwise known as the Small-scale Renewable Energy Scheme introduced by the Howard government which has been key to the price drop in solar.
On the second reading of the Bill in parliament, Haines said this would mean that “when you install a home battery, you earn certificates which you can then on-sell to electricity retailers, who are required to purchase them.” The effect of this will drive down the installation cost of a home battery, continued Haines. “Right now, a 13.5kWh Tesla Powerwall 2 might set you back around $15,000 all in…My bill could drive down that price by around $3,000.”
Of course, like the solar rebate, the exact amount of savings depends on the size of the system installed and how it is utilised.
“But the fundamental point here is this,” said Haines, “to unlock massive savings for Australian households, to bring power security to regional households and to accelerate our transition to renewable energy, we need to make home batteries cheaper. The government has an existing policy mechanism that could do this. My bill will get it done.”
Early bird catches the biggest worm
Although, it should be noted that, like the solar rebate, the creation of STC certificates depends upon the annual electricity discharge of the battery multiplied by the deeming rate. So, that means, the number of MWh the battery discharges multiplied by the years since installation, meaning the subsidy drops over time and the early bird catches the biggest worm.
The Bill proposes a deeming period of 15 years if installation occurs before 2026, with that figure reducing by one each year from 2027.
The initial documents of the Bill make no mention of Virtual Power Plants (VPPs), but participation in VPPs is yet another option available to home battery owners to make further savings.
Of course, the real question is not why now, but why not? As Haines noted in her introduction of the Bill, “In my electorate of Indi, getting cheap and reliable supply of electricity to every household is a real challenge.”
Haines notes that communities like Corryong were “completely cut off from electricity when the power lines to Wodonga burned down” during the bushfires. And towns on the periphery of the grid, “like Euroa and Mansfield,” commonly “experience power surges that damage appliances and have total blackouts.”
But even if these are more extreme examples, the fact of the matter is, regular Australian households struggle to pay their power bills, particularly in rural areas. “Regional areas make up 40% of forced disconnections in Victoria,” said Haines, “even though we make up only 25% of the population.”
“This bill tackles some of these challenges by making home batteries cheaper for all Australians, because having a battery in your home means lower power bills. It means taking control back from power companies over your power usage. And it means that, when the power fails, your battery kicks in and keeps the lights on.”
Still work to be done
Haines believes in her Bill, but she also admits there needs to be a significant investment in our workforce, specifically noting the need for more safety inspectors. But what is more, Haines also called on the government “to introduce a new program of no-interest loans for low-income households to purchase solar and battery installations. That would be a game changer for slashing power bills.”
What’s in store?
According to Haines, analysis by Green Energy Markets suggests the bill could drive the installation of up to two million batteries by 2030. “That would be the equivalent of six Hazelwood power stations…bringing cheaper and more-secure power to millions, acting as a massive electric sponge soaking up excess daytime solar and balancing the grid” said Haines.
“We need to do for home batteries what we did for solar panels – put them in reach of millions of Australians so people can take those practical, sensible steps to not only tackle climate change but make the smart economic choice for their families. The bill would get that done.”
The Cheaper Home Batteries Bill was welcomed by the Clean Energy Council (CEC), which said the Bill would be a win for the grid and allow more Australians to embrace renewables.
The CEC’s recently released Roadmap for a Renewable Energy Future: Federal Election policy recommendations, highlighted the need for a home battery program, noting that battery installations currently represent approximately 7% of clean energy employment, “but under some scenarios within the Australian Energy Market Operator’s 2020 Integrated System Plan, it could represent between 11-32% by 2035, depending on government policies.”
“There is a role for governments to incentivise battery solutions and drive innovation in business models to support the increased customer uptake of household battery systems,” said CEC chief executive, Kane Thornton.
Thornton noted that Haines’ bill would “reduce the upfront cost of household batteries and accelerate the deployment and development of the household battery industry.”