The giant leap in battery technology has generated a lot of interest from people who want to go off the grid, store excess solar energy to increase self-consumption, and achieve energy independence. However, rapid advances in technology have led to some confusion about what is achievable and which battery system is best for individual households. Costs can also vary widely, depending on the energy storage capacity (in kilowatt-hours) and the type of solar inverter required.

How much does a home battery system cost?
The cost of a home battery system depends on the battery size or capacity, measured in kilowatt-hours (kWh), and the brand of solar or hybrid inverter used. Depending on battery type, installation location, backup power requirements, and the type of inverter used, the average cost of a home battery can range from $4,000 for a small 4kWh battery to $15,000 or more for a large 13kWh battery. Costs have been coming down slowly, but not as fast as many would like.

To put this into perspective, an average three-bedroom home uses about 20kWh of electricity per day. However, some of this energy is used during the day and can be powered directly by solar energy. With this in mind, a medium-sized 10kWh battery is usually enough to cover nighttime and nighttime hours. In reality, every home is different, and usage patterns can vary widely. For those who are more energy conscious and use efficient appliances, a smaller 5 to 6kWh battery may be suitable and can also provide enough backup power to support basic base loads such as lighting, computers and refrigerators.
Basic Battery Cost Guide
As a general guideline in Australia, the cost of installing a battery system is around $1000 per kWh, while in the US it is closer to $700 per kWh. For example, a Tesla Powerwall 2 with 13.5kWh of storage will cost around AU$14,500 fully installed, while a 9.8kWh LG RESU battery will cost close to $8000, plus a compatible hybrid inverter and additional costs for installation. Additional costs and switch upgrades may also be required, especially if dedicated circuits need to be backed up during a power outage. The location of the battery is also important, and some homes may need to install a dedicated case or cover to help protect the battery from extreme weather and direct sunlight, which can cause overheating and shutdowns. In some cases, the warranty may be voided if the battery is not installed in a semi-protected position.
Off-grid battery system
Off-grid systems require larger battery capacities (usually from 12kWh to 30kWh+) and dedicated off-grid inverters and other equipment, so off-grid costs are usually much higher. For more details and information, see our website Introduction to Off-Grid Solar Systems.

Do you need batteries?
Unless you have frequent power outages, the answer is usually no. For many, the cost of a battery system is too high, but that doesn't mean you can't take advantage of rooftop solar. For most homes, rooftop solar can reduce electricity bills by up to 60% or more, depending on the amount of energy you use during the day. For example, energy-intensive appliances such as dishwashers, air conditioners, and washing machines can run for free using solar energy during the day.

In most states, you'll get credits for any excess electricity fed back to the grid. Feed-in tariff (FiT) rates are typically around $0.10 per kWh, but have recently dropped to $0.06 in some states. That's a lot less than Australia's average electricity bill of $0.30 per kWh, so why it's worth using solar power to run appliances or heat hot water during the day.

The payback period or return on investment (ROI) for most battery systems is around 7-10 years. With that in mind, installing rooftop solar and running high-efficiency appliances or heating hot water during the day is often more cost-effective than storing excess energy in batteries. For some, however, the value and safety of having a reliable, sustainable power source easily outweighs the cost.

Are my solar system batteries ready?

Most existing solar systems can use additional inverters or one of the many AC-coupled batteries now available to increase energy storage. Some companies may advertise battery-ready systems that are similar to conventional grid-tied solar systems, but use hybrid inverters instead of conventional solar inverters. Hybrid inverters have built-in battery connections and controls, making it easier to add batteries in the future. The downside is that "battery ready" or hybrid inverters are typically 20-30% more expensive than standard solar inverters. Another problem is that due to the rapid development of battery technology, if you have a hybrid inverter installed and want a battery in a few years, it will be difficult to find a compatible battery.