Solar battery installs to reach 33,000 in 2018 as economics improve

The number of household solar batteries installed in Australia in 2017 trebled to nearly 21,000 and are tipped to jump again to 33,000 in 2018 as the economics improve and bipartisan state government initiatives gain traction.

Industry consultant SunWiz says one in eight of the 172,000 rooftop solar installations in 2017 including a battery storage unit as Australian households accelerated their switch to their own “distributed energy” to protect themselves against energy price hikes.

The past year saw record installations of rooftop solar – more than 1,050MW – and also saw a trend towards larger rooftop systems – as households sought to “max out” their roof space in preparation for battery storage and electric vehicles.

“Sales in household batteries have skyrocketed this year, with demand outstripping the availability of installers in many areas,” says Warwick Johnston, the founder and director of SunWiz.

“With energy prices rising this year, Australians are embracing the idea of being able to control their energy consumption and costs while reducing their emissions at the same time.

Johnston noted that state and federal policies are  influencing uptake as well and will continue to do so. This is particularly the case in South Australia, where state and federal support is underpinning a series of “virtual power plant” where battery storage units are aggregated and able to share energy and provide grid support.

Those initiatives are likely to underpin installations of more than 2,000 batteries in South Australia over the next year, and between 40,000 and 100,000 in that state alone over the next four years – depending if the new Liberal government embrace the Tesla plan for the world’s biggest virtual power plant (250MW and 650MWh of storage).

There are also an increasing number of housing developments, both private and government-sponsored, that are looking to install both rooftop solar and battery storage as the de-factor norm in new constructions.

“I’d expect to see this emerge as a pattern across the country considering the popularity of batteries and the benefits they contribute to the electricity network,” Johnston says.

The 21,000 battery storage installations in 2017 amounted to 190MWh of distributed systems, with NSW emerging as the number one battery hotspot in the country, with 42 per cent of all installations.

That result is likely to be the consequence of the end of the premium feed in tariffs. Queensland has by far the biggest installation of rooftop solar (more than 2GW) but nearly half still enjoy premium feed in tariffs so those households have no incentive to install battery storage.

Still, Queensland was held second spot in the state market shares with 19 per cent, followed by Victoria with 17 per cent and South Australia with 11 per cent.

The return on investment is strongest in South Australia, which for most of the past two decades has suffered from the highest retail prices in the country.

According to SunWiz estimates, the “pay-back” for battery storage systems in South Australia is seven years, while the average payback for customers in other states is 10 years or more.

For most, it is a question of how electricity they use, and how big the battery is. The returns on investment are greatest for those consuming the most, and with smaller batteries (because they get greater use per kWh of storage invested).

But one of the biggest difficulties for the market is the potential bottleneck, and the lack of access to battery storage supplies, a problem that affected Tesla in particularly in 2017 as it diverted resources to the Tesla big battery at Hornsdale in South Australia, and also to the cyclone-ravaged Puerto Rico.

“The solar market is currently so white hot that it’s difficult to find a solar installer, let alone someone to do more complex battery installation,” Johnston says.

Johnston’s key forecasts for 2018-19 are:

• 300 MWh of distributed systems across 33000 installations, plus 136MWh of projects
  in 2018;
• The market will cool a bit in 2019 as electricity prices stabilise and feed-in tariffs reduce; both due to wholesale electricity prices falling as more renewable supply is added;
• With VARTA and Huawei both announcing market entry in early 2018, more new battery and inverter suppliers will enter the Australian market this year.