Home battery storage market expected to “explode” in Australia in 2016

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New research says Australian battery storage market will jump 10-fold in 2016, as international players flock to Australia to take advantage of a market driven by high electricity costs, soaring fixed network charges, and lousy feed-in tariffs.

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The battery storage market is expected to finally “explode” in Australia in 2016, with the residential sector expected to grow 20-fold over the next 12 months , while the battery storage industry grows into a billion-dollar-a-year market within a few years.

In what is expected to be a repeat of the solar boom of five years ago, the battery storage market – this time without subsidies – is expected to enjoy massive growth as homes and businesses look to make the most out of their rooftop solar panels, and as utilities look to storage as a cheaper offset to grid expansion.

greentech storage Oz 2020

A new report by leading US research firm Greentech Media says Australia’s energy storage market will focus mostly on the consumer market, particularly households, and is primed by oversized systems, paltry feed-in tariffs, increasing fixed network charges and high electricity prices. As well, the cost of new metering has jumped seven-fold.

It says that the residential market for battery storage will surge from a mere 1.9MW in 2015 to 44MW in 2016, as the overall market jumps from 6.6MW to 75MW. By 2020, Australia is expected to have installed more than 800MW of battery storage,  worth more than $2.5 billion.

The Greentech Media report is one of a number of analyses that have predicted a rapid uptake of battery storage. Just this week, the Australian Energy Market Operator prepared a scenario that suggested 40 per cent of homes would have battery storage within the next two decades. It predicts the market will continue to snowball to 11,200MW by 2035.

Australia has already been identified by the likes of Tesla and Enphase and others as the most prospective market in the world, thanks to its high grid prices, its abundance of rooftop solar, excellent solar resources, and the nature of the tariffs across the nation.

Brett Simon, an energy storage analyst at GTM Research and the report’s author, says numerous international players are being drawn to Australia’s nascent market. These include Tesla, Panasonic, Enphase Sunverge, Kokam, LG, and many others, including local battery technology developers Redflow and Ecoult.

“In mid-2015, a significant number of storage system vendors announced residential products for the Australian market. Some of these products are available already, and more will enter the market in early 2016, Simon said.

“Furthermore, it’s notable that Australia’s electricity retailers are starting to offer energy storage systems for their customers, including major players like Ergon Energy, AGL, and Origin Energy.”

Others, such as Synergy and Alinta, also plan to do the same, while governments in the ACT and South Australia are also openly supporting storage. Even the federal government has predicted massive take-up, and has asked the Clean Energy Finance Corporation and the Australian Renewable Energy Agency to support the technology.

Simon says storage vendors are also eyeing Australia’s commercial market, which he tips will jump from 1.4MW to 23MW, driven in part by high demand charges and incentives in South Australia.

“As battery prices continue their rapid decline, storage will become more attractive, especially in the residential sector,” the report says.


It says the NSW and Victorian markets will be primed for growth by the expiry of premium feed-in tariffs (many of which end at the end of 2016). It says the Queensland market will be the biggest, simply because of the size of its rooftop solar market. Tariff change will also drive the uptake of battery storage in South Australia.

“The coming policy shift for feed-in tariffs significantly improves the case for energy storage across the nation, as customers with solar PV seek an improved financial outcome by storing and consuming stored energy at times of high electricity prices, rather than selling solar-generated electricity back to the grid for little or zero remuneration.”

It also notes policies like Adelaide’s Sustainable Cities Incentive Scheme offer direct financial benefits for storage, and the enthusiasm of prime minister Malcolm Turnbull for “disruptive technologies”. Environment minister Greg hunt has predicted a significant uptake in battery storage.

“Economics still remains a major challenge for widespread storage uptake, but costs are expected to decline, as more players and products enter the market in 2016 and beyond,” the report says.

“At present, Australia lacks significant incentives for ancillary services, reducing the potential for the utility-scale energy storage market. South Australia’s recent policies that incentivise storage may provide a roadmap for other states to follow, but the future policy framework is unclear.”

Greentech Media says the Australian market may offer a “test case”  for international developers to pursue strategies in other global markets.

“Innovative channel strategies and other business models tested over the next few years will offer valuable results for utilities, developers, retailers and regulators that seek increased energy storage deployment,” the report says.

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  1. News Views 4 years ago

    I can’t see this being another solar boom like we had 5 years ago at all. There are no overly generous state government feed in tariff incentives to fuel it. Rather it will be a slow process and one which a lot of people won’t be able to afford until battery prices drop substantially.

    • john 4 years ago

      Just remember when the generous now FIT was put in place a 5KW system would cost high $20ks now as you know the same is low sub $7k.
      My first quote was $54K so yes prices have gone down perhaps a bit of historical perspective is needed.
      What should have happened is that the FIT should have reduced each year to keep in line with falling install prices for new installs a governance fail.

      • News Views 4 years ago

        I don’t see what my taxes were used to subsidise private solar money making businesses many of whom made a motza and my power prices increased as a result of solar! And I sure as hell hope it doesn’t happen with batteries too.

        • john 4 years ago

          That is a total furphy you did not pay more for power because of the FIT the reason for the increase was the build out of the network in fact the power supplied by the PV installations supressed the buying price of power and those who did not have PV were helped out by the PV people.
          Simplistic untruthful non facts were spread by the usual suspects to con people who did not look into the actual situation.
          It is easy to spread FUD it is the bottom line of some in the communication industry you have been feed untruth my friend.
          If you download the finding from the inquires you will find where the support for the installations cost less than the savings.

          • News Views 4 years ago

            Prices increased because of network builds but also because of solar The Qld Competition Authority price determinations says the FiT added to price increases,

          • Stephen Hargreaves 4 years ago

            You have all missed the Australian company with Graphite energy technology storage @$1,500 ton vs china supplying 80% of world market @$5,500 ton. This will lower the cost of batteries.

  2. Ray Miller 4 years ago

    I hope to have my system operating in December – January, maybe the total battery sales MWh per month could be published to see how the predictions are going.

    • john 4 years ago

      Ray if you want to know the retail price of power go http://www.aemo.com.au/Electricity/Data/Price-and-Demand/Average-Price-Tables
      As to price of batteries and return please do your own spread sheets and keep us updated.

      • Ray Miller 4 years ago

        I have the AEMO in my favorites and the industry uses $ per MWh and the supporting argument is how can the wholesale price be <1 to 10 cents per kWh and us efficient users get to pay 70 cents/kWh or $700 MWh. The NEM was sold to use and we all paid Mega $ for it for reduced prices, and it was the industry who set the rules.
        At this stage the battery storage is an expensive early adopter experience where in 2000 I watched my rotating disk meter go backwards, now I will be forcing the incumbent industry to rethink models for the future. When the energy Uber comes along things will get very interesting.

  3. maw56disqus 4 years ago

    The Energy storage unit is MWh, not MW as in your article. Lack of the correct terminolgy gives credence to the fossil fuel lobby that you don’t have a grasp of the science. I do agree with News Views, it will be slow and sure, new system installs probably being the bow wave.

    • Jonathan Prendergast 4 years ago

      MWh (storage) and MW (rate of power delivery) are both important for batteries

      • Jacob 4 years ago

        Of course a battery can supply the required current.

        Of course the Model S battery can make the car go at 130km/h.

        Of course the Powerwall can supply 5kW of power.

        What the media does is say kW instead of kWh and that is very useless info.

        • Jonathan Prendergast 4 years ago

          If designing a Microgrid for example, with solar and storage, you spend more money on trying to get batteries that can discharge at the required rate than you do on amount of stored energy.

          The Tesla Powerwall was originally 2kW but upgraded to 5kW a month later as you would not be able to run your kettle and toaster at same time.

    • Giles 4 years ago

      So, both MW and MWh are used. This report, written by energy specialists, used MW, The battery storage report by AEMO also used MW, as well as MWh. AEMO operate the grid, perhaps you should tell them they don;t know anything about energy either.

  4. Mark Roest 4 years ago

    I’ve divided the numbers a bunch of times in amazed disbelief, but I keep coming up with over $3,000 per kWh! “800MW [or 800,000 kWh, or 800,000,000 Wh] of battery storage, worth more than $2.5 billion.” $2.5 billion divided by 800,000 = $3,125/kWh!

    No wonder you’ve got companies lining up to play — it’s like leaving boxes full of gold doubloons all over the landscape, and calling, “Come and get it!”. Might as well ring the dinner gong while you’re at it. Tesla’s Powerwall is around $1400/kWh if I remember correctly, and GM recently ‘spilled the beans’ on the LG Chem battery they will use in the 2016 Chevy Bolt: $145 per kWh! If I were in your shoes, I’d say, “Come back when you can offer US$300 per kWh (not counting any import duties) or better, and I’ll shop the installation to all the local electrical contractors to keep you from gold-plating that.” That should sort the pirates out from the people who want to install solar and batteries to save the planet and cut your cost of electricity, and make a decent living at it.

    • Jacob 4 years ago

      The 100kWh Tesla battery is U$250/kWh.

    • David Osmond 4 years ago

      Hi Mark, you seem to have confused MW with MWh. The report says 800 MW, not 800 MWh.
      Never-the-less, there’s often not a great deal of difference between a home residential battery size in kWh, and its power rating in kW. So your figures may well prove to be not far off.

    • Ian 4 years ago

      Mark, you have catted the pigeons, or is it pigeonned the cats. Assuming the Tesla powerwall daily cycling model is average for the industry the specs are these: 7KWH , 2KW continuous and 3.3 KW peak. Using the Continuous Power rating figure and converting the quoted total power value to an energy value we get 800MWx 7/2= 2.8 GWH of storage. $ 2500 million / 2800 000 KWH $892/ KWH. Most would want a return on investment in 5 years,( at the most generous), that is 2000 cycles. That comes to 44.6 c/ KWH per cycle. I hate to admit it, but the explosion might be a damp squib!

    • Miles Harding 4 years ago

      You would be right to reject en expensive offering if it doesn’t compare well to a Powerwall unit. I would be interested to hear how the supplier defends their proposal in light of Tesla’s product.

      The Telsa Powerwall should be the benckmark**. As a mimumum, it will
      be 2KW contiinuous, altough Tesla as indicated that it will be upgraded
      to 4 or 5KW. Even at 2KW, it would be $2500AUD per KW, and that’s today,
      not in 2020.

      It would seem that confusing KW and KWh is part of the storage landscape. Assuming that they really mean 800MW, with an unmentioned amount of battery storage, $3000 per KW seems rather high for 2020.

      In a 2020 big solar scenario, I would expect that average home installation to be something like 5KW, possibly with an overbuild of panels, say 7KW and with battery power and capacity to match, say 5KW and 15KWh storage. Battery costs are set to decline rapidly, making the storage a minor part of this type of system.

      800MW of 5KW systems would require about 160,000 across the country, a long way short of 40% of homes, so the uptake may be far higher than suggested.

      **My understanding of the Powerwall is that is connects on the DC bus between the solar panels and the AC inverter, so very little hardware in addition to the Powerwall unit is necessary to install that battery store.

    • Giles 4 years ago

      So, the author replies: I’ll note that our economic forecast is based on MW, not MWh. Most of these systems are expected to have a minimum 2 hour duration. However, the projected value includes the total market value, including not only the value of the storage systems themselves, but also the balance of system costs (installation, marketing, etc.).

    • MorinMoss 4 years ago

      Chevy’s battery price is most likely for the cells not completed packs which could increase the cost by 1/3 or more.

  5. john 4 years ago

    With the price of power to residential customers being above 20c a KwH and battery can deliver at some where in the 12c to 15c a KwH of course there is a market opportunity.
    Why do you think the charge for power is shifting from a simple read meter per quarter of $15 to a daily charge for delivery so it adds up to well over $300 a year?
    So which ever way the power is delivered if you can store the power you produce and use it then it is very obvious that there are going to be 4 kinds of consumers.

    1 Those who can not make power from PV totally out of the loop.

    2 Those who can but use a very small amount they are marginal.

    3 Large users who will move to storage and augmented supply i.e. off grid.

    4 Those in between who can cop the supply charge and supply all of their needs with PV and storage.

    The solution.
    Electricity Retailers have to get into service delivery to customers.
    They supply the battery back up they manage and use it following the system used in NZ
    where the battery back up can be used at times of high energy cost and the rest left over for the client to use.
    I think this is beyond the thinking of the present people who get paid for doing SFA to run the retailers rather sad really.

  6. Leigh Ryan 4 years ago

    John you got it right with one sentence, a governance fail, it’s still a governance fail and next year, the year after that and most likely for the next decade at least it will be a governance fail as long as people believe they only have two choices at an election, we need a revolution in politics as well as technology to wake our masters up to the fact their time is over, Iv’e done the numbers and have given myself a 8 year payback on 7Kwh of batteries borrowing at 7 1/2% , any rate increases reduces the payback time, i already have 6.5 Kw of PV panels on my roof so with a little thought i should be able to go off-grid, i have included a back up gas generator just in case winter is darker than usual, my neighbors are eagerly watching how this goes as almost the whole street has been around for a look and are eager for my success before committing themselves, that’s a possibility of a whole street off-grid in the suburbs, next projects water & sewerage, i can’t see why we have to be connected there either.

  7. Miles Harding 4 years ago

    The miserable part of the maths for the utilities is that each time they try to defend their revenue, they make battery storage and off-grid options more attractive. Even if they do nothing, the fact that batteries are linked to the expanding and price conscious vehicle business, the projected storage costs will overtake them within a few years.

  8. Brenton Harris 4 years ago

    What do you think about Zinc Bromide Modules as a solution for battery storage systems in Australia? Check out http://redflow.com/

  9. aaaanon 4 years ago

    “Just this week, the Australian Energy Market Operator prepared a scenario that suggested 40 per cent of homes would have battery storage within the next two decades. It predicts the market will continue to snowball to 11,200MW by 2035.”

    This is misleading at best – there was no modelling behind that 40% figure. The scenario is “designed to reflect a future where new embedded technologies have
    experienced rapid uptake, possibly driven by significant cost reductions and/or new policy incentives”, for the purpose of network planning. The 11,200 MW figure you refer to is in no way a ‘prediction’.

  10. Brenton Harris 4 years ago

    RedFlow Ltd are developing a different battery technology using zinc bromide which looks like it may be significantly cheaper than Lithium based products. If this startup gets some legs it could be a game changer.

  11. JED 3 years ago

    Which AEMO report is the following quote from (is it the Emerging Technologies Information Paper – if so what page)?… ‘Australian Energy Market Operator prepared a scenario that suggested 40 per cent of homes would have battery storage within the next two decades. It predicts the market will continue to snowball to 11,200MW by 2035.’

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