Solar batteries are becoming more affordable for consumers. Since entering the market over three decades ago, they have consistently decreased in price. A solar battery’s price is dictated by factors such as type, size, materials, and brand. Technological advancement and growing market competition are helping drive prices down.
While decreasing over the long term, solar batteries have experienced short-term price spikes – usually due to unforeseen increased demand or material shortages.
It is likely that solar batteries will continue to decrease in price over the long term. However, waiting to purchase until the price of batteries drops will result in you missing out on potential financial savings right now. Thousands of Australians are making savings on their energy bills today with a solar battery, regardless of the purchase price.
Deciding when solar batteries are affordable depends on your individual circumstances and budget. For many people, solar batteries are affordable today because they pay for themselves with the savings you make on your energy bill. And if you can pay for them over time, even better. Knowing the market trends, which we will outline below, will also assist you in making an educated decision about when to purchase a solar battery for your home or business.
Demand for solar batteries
While solar battery prices have remained stable, demand for batteries has continued to rise. The key cause of this is Australian energy retailers raising electricity costs. In the last year, prices have risen between 23-31% for households and businesses. As a result, consumers are flocking to solar batteries to save money and reduce their reliance on the grid. Data shows that installation of solar batteries rose 55% from 2021 to 2022.
Are solar batteries worth it?
Solar batteries are worth their price tag. While projections show that solar battery prices are expected to drop, waiting means missing out on savings. Solar batteries have the potential to save you money as soon as they are installed and operational.
The most cost effective way to purchase a battery is to have it installed as part of a complete solar + battery system. That way, you only have one set of installation costs and a hybrid inverter that can seamlessly control both your solar panels and your battery. You’ll also be able to monitor your system with ease to help you adapt your energy habits and make even more savings.
A solar battery will reduce your reliance on the grid and make a big difference to your energy bills, without you having to lift a finger. But if you want to be even more savvy with your energy, you can switch tariffs and use your battery to load shift so you only buy energy from the grid when your tariff is at its lowest.
With the continual decline of solar feed-in tariffs, solar batteries are the best option to take advantage of extra solar generation. With a battery, you can also join virtual power plants (VPPs) and earn more money on your investment.
What affects the cost of a solar battery?
A range of different elements affect the total cost of a solar battery. Some factors relate to the battery itself, whereas other costs are less direct. Being aware of how these cost factors match your needs will help you make an informed decision.
For an in-depth look, read our article about solar panel and battery costs.
Battery type
Battery type affects cost based on the materials used and the characteristics of the battery. When certain types of batteries use scarce or expensive materials, this increases manufacturing costs. As a result, these batteries have higher price tags. Makes sense, right?
In a similar vein, battery types with greater efficiency or longevity have higher price tags. However, these batteries tend to provide better long-term financial returns. Higher efficiency means losing less power, and longevity means getting more use out of your battery. It’s important to factor in returns when considering costs.
The three main types of solar batteries in use are lithium-ion batteries, lead-acid batteries, and flow batteries. These types have different chemical compositions, resulting in distinct characteristics.
- Lithium-ion batteries are the most popular among these options because of their efficiency, durability, and safety. Lithium Iron Phosphate, or LiFePO4, are the leaders of the pack when it comes to lithium-ion batteries.
- Lead-acid batteries are the most affordable option, but they require more maintenance and do not last as long.
- Flow batteries are a relatively new technology with high efficiency and an impressive lifespan. Unfortunately, they are expensive.
Battery size
A solar battery’s size determines its capacity to store power. Batteries are made up of a collection of devices called cells. Each cell has a certain capacity for power storage. A battery with a higher amount of cells or larger cells is able to store more power. As a result, larger batteries fetch a higher price.
Read our article explaining what solar battery size you need.
Additional components
In order to supply electricity to the home, a solar battery must include an inverter. This converts direct current (DC) electricity in a battery to alternating current (AC) electricity used by the household.
If you have an existing solar system with a hybrid inverter, then you can retrofit your battery into your system without having to pay for an additional inverter. If not, you will need to pay for a compatible battery inverter. Even if you have ‘battery-ready’ solar system, you will need a battery inverter if you don’t have a hybrid inverter. If you are purchasing a complete solar + battery system (the most economical option) then you will ideally have a hybrid inverter included in this package to control both your solar panels and your battery.
Installation cost
A solar battery installer often charges more to install multiple solar batteries or more complex battery systems. They may also factor in market competition and their own brand value in their pricing.
At Plico, we do things a little differently. Plico members pay no big upfront costs and just one low weekly fee. This includes the cost of installation, as well as servicing for 10 years.
Brand
The brand of solar batteries has a noticeable impact on their price. Certain brands may have a higher price tag based on prestige or reputation. While batteries at a premium price are often high-quality products, you can sometimes find cheaper alternatives that are just as good (or even better!)
Subsidies
Certain states in Australia have subsidies or incentives for solar batteries. These often mitigate some of the solar battery costs. Currently, only Victoria and the Northern Territory have battery-specific incentives in place.
West Aussies can find out more information in our article on the solar rebate for WA.
Solar battery price trends
Solar battery prices have gradually lowered over time, despite trends varying based on battery size. Observing how battery prices have changed provides a useful guide for future price trends.
Last five years
Solar battery prices have remained relatively stable in the last five years. Despite slight increases and decreases, prices have averaged out over this time period.
One thing worth noting is that inflation rates have risen significantly in Australia within the last five years. By staying at a similar price point during this time, solar batteries in Australia have technically become more affordable. And that’s good news for anyone looking for 24/7 solar savings.
Last ten years
Over the last decade, the average price of a lithium-ion battery has dropped over 40%. This includes lithium-ion batteries used for household solar. Prices were dropping consistently year-to-year before plateauing within the last five years. Many of the larger price drops over the last decade can be linked to significant product releases or scientific breakthroughs.
Since entering the market
In 1991, Sony created the first rechargeable solar battery that could be utilised by a homeowner (albeit a wealthy one). To give an idea of cost, around this time a battery with one kilowatt-hour (kWh) capacity cost approximately $7,500 USD. Nowadays, a battery with the same capacity can have a 90% lower cost. That’s a huge price decrease in the short span of 30 years.
Will solar batteries continue to decrease in price?
Based on existing trends, solar batteries are likely to decrease in price over the next few years. A number of factors can contribute to this price drop, including advancement in technology, which affects manufacturing. This might manifest as new production methods, making batteries cheaper. Alternatively, it could take the form of alternate chemical compositions for batteries. Different materials may be more inexpensive to source or result in more effective batteries. Solar battery producers can pass these savings on to consumers. Despite future advancements in technology, which apply to almost everything we purchase in our day to day lives, battery technology available today is cutting-edge. If you wait for the technology to improve, you’ll be missing out on potential savings today.
Another aspect to consider is competition within the solar battery market. More companies are entering the solar battery space. To remain competitive, solar battery manufacturers must keep their prices fair. Naturally, brand perception and marketing affect the prices a company can charge.
However, the most interesting development is the rise in electrical vehicle (EV) batteries. While originally designed for vehicles, they are capable of being repurposed for solar systems. This creates market competition from a new source.
Projections
Projections show that solar battery prices will continue to drop. A 2021 study by Ziegler and Trancik examined the rate of cost decline and technology improvement for lithium-ion batteries since their inception. One projection suggested that the average lithium-ion battery may cost as little as $50 USD per kilowatt hour by 2030. This will make them accessible to more people than ever. However, if you wait until 2030 you will miss out on seven years of savings!
Can I add a battery to my existing solar system?
Yes, you can add a battery to your existing solar system. While it’s always more cost effective to install a battery when you get solar, retrofitting a solar battery is a relatively straightforward process. By examining your existing solar system, Plico can easily incorporate a suitable solar battery and help you store your generated solar energy to use at night.
For most Australians, the biggest hurdle to attaining solar freedom is the upfront cost. With Plico, you can have an installed and monitored solar + battery system for as little as $33.90 a week. You can also add a solar battery to your existing system from just $19.90 a week.
Chat with one of our switched-on team members today to see what solar + battery system is the right fit for you. Have any questions? Simply fill out the form below.
