“Missing link:” More than 420 neighbourhood batteries approved to boost and share rooftop solar

More than 420 community or “neighbourhood” batteries have been approved by the federal government and the Australian Renewable Energy Agency (Arena) in a move it says will boost the capacity of local networks to absorb the huge growth in rooftop solar.

The funding, long promised by the Labor government in the last election campaign as part of its Powering Australia package, will see batteries installed in every state and territory, with NSW to get the most with an allocation of nearly 100.

The funding will be split between batteries installed and funded by networks, and batteries funded by non-network organisations, including many local community groups.

The batteries will be sized between 50 kilowatts (kW) and 5 megawatts (MW), and Arena says the 370 installations that it will help fund will total around 280 megawatt hours (MWh).

Arena will provide $143 million to the program, paying up to $0.51 / Wh (watt hour) in grant funding, against an average cost of $1.28 / Wh. That’s equivalent to nearly 40 per cent of the installation cost. Funding support for another 58 neighbourhood battery installations is coming directly from the department of climate change and energy.

The role of networks in the rollout of neighbourhood batteries has been questioned by some analysts, who point out that the prices cited by Arena show that there are no economies of scale in such installations. Tristan Edis, from Green Energy Markets, took up this point in a recent episode of Renew Economy’s SwitchOn Australia podcast.

Arena CEO Darren Miller says the batteries will a tangible impact on local network constraints and will expand rooftop solar capacity, reduce emissions and reduce electricity costs for consumers. He says the program was 10 times over subscribed.

“These batteries are the missing link in our renewable energy system, enabling more rooftop solar to be installed helping households and other energy users take advantage of local solar energy,” Miller said in a post on LinkedIn.

He says it will benefit households, hospitals, schools and tertiary education institutions, council facilities, housing developments, social and community housing, sports facilities, libraries, aquatic centres, shopping centres, and regional and remote communities.

“These batteries … will have a significant impact upon Australia’s energy and grid security while delivering cleaner and more cost-effective energy for our communities,” he said in an earlier statement.

“We are encouraged to see this important asset class being demonstrated at such a scale and expect that this funding round will kick start the neighbourhood-scale storage sector.”

Federal energy and climate minister Chris Bowen, said one in three Australian households have already embraced rooftop solar, but less than 1 in 40 households have battery storage.

“The demand for Arena funds shows that that neighbourhood scale battery storage has a huge future,” Bowen said at the launch of the latest community battery in Bexley North, built by Ausgrid, which has storage capacity of 267kWh and is directly linked to an EV charging facility.

“Community batteries are the next stage in ensuring all communities get the benefit of the energy transformation,” Bowen said.

Arena says it received a strong response with 140 eligible Expressions of Interest received. Funding has been conditionally allocated to 21 applications, with 10 of these coming from local network companies ($67.3 million), and 11 from non network companies ($75.7 million).

It says specific locations for the batteries are yet to be finalised and are subject to community consultation, planning approvals and entry into commercial agreements.

Arena expects to launch a second round of community battery funding in late 2024, with a funding allocation of at least $28 million.