SunWiz report finds residential storage growing at over 20% annually. Continued expansion expected with C&I battery segment demonstrating an encouraging upside. 

Solar battery installations continued to accelerate in Australia in 2023. In fact, it was a “record setting year”, enthused SunWiz in its latest “Australian Battery Market Report”. The analysis found that residential battery installations topped 57,000 in 2023 – strong growth of 21% over the previous year.

In terms capacity, the new home energy storage systems installed for the year came in at 656MWh. That brings the installed residential battery capacity to 2,770MWh.

The report was released on Tuesday April 9 and is available here. SunWiz has been tracking battery installations in Australia, across all market segments, since 2015.

The 2023 result is encouraging and demonstrates that the value of distributed batteries is being recognised by a growing number of homeowners and small businesses. It also shows that solar and battery retailers are being increasingly effective in conveying these benefits to customers.

“The economic value of batteries is also increasing as the gap widens between what power companies charge for electricity and what they pay for Australian homeowners’ excess solar energy,” said Warwick Johnston, the Managing Director of SunWiz. “Batteries also provide security against localised blackouts, which are increasing in frequency due to damaging extreme weather, due to climate change.”

Increasingly economic

Financial payback times for solar-plus-storage systems shortened for homeowners in 2023. The SunWiz analysis reveals that while at the start of 2023 a home solar and battery system for homeowners was 11 years, by the end of the year that had fallen to 8 years.

While the primary reason for the improvement was declining solar module prices, the development is an encouraging one. Crucially, it pushed payback within the industry-standard 10-year warranty period for a residential battery.

On a state-by-state basis, the Melbourne-based analyst found that South Australia has the quickest payback period for solar-plus-storage at 6.5 years, followed by Queensland (7.2 years), WA (7.5), NSW (9.2), and Victoria (9.4).

Across all market segments support for batteries from governments strengthened in 2023, reported SunWiz. However, in the residential segment some programs have been wound up. While the ACT Next Gen Battery Storage program came to an end in January 2023 – having reached the 5000-home target, it has been replaced by a loan program. Under the ACT’s Sustainable Household Scheme, that has a budget of $150 million, interest free loans of between $2000 and $15,000 are available. 

Victoria’s Solar Homes Program, NT’s Home and Business Battery Scheme, and Queensland’s Battery Booster Rebate remain open.

Three Virtual Power Plant (VPP) programs are currently accepting new applicants and include measures to support battery uptake. In NSW, the Smart Distributed Batteries Project pilot is open to applicatns, as is Phase 3 of the South Australian Virtual Power Plant. Victoria’s Virtual Power Plant project closed to new entrants at the end of 2022.

VPP uptake and interest remains modest, however. SunWiz observes that just 14% of distributed batteries were integrated into a VPP, with no “noteworthy acceleration of VPP uptake” being observed.

Pointing to the Queensland Household Energy Survey, low and falling interest in VPP integration was observed of homeowners. While only 28% of survey respondents showed an interest integrating their solar and battery into a VPP, those opposed rose in 2023 to 45%.

Business boost

The commercial and industrial (C&I) segment was a bright spot in the 2023 figures. AEMO recorded 402 MWh of batteries installed in at businesses for the year, as recorded in the Distributed Energy Resources Register.

While the C&I segment remains the smallest for battery deployment in Australia, accounting for approximately 10% of the cumulative installed capacity at the end of 2023, the analyst’s outlook is for 50% year-on-year growth in 2023.

Overall, SunWiz expects more than 5GWh of battery energy storage to be installed in 2024, representing almost a doubling on 2023 – although much of this depends on utiliy scale battery projects. Residential battery installations are expected to growth by more than 20%, to approximately 70,000 systems.

“Despite the massive year for grid-scale storage, home energy storage systems still remain the largest cumulative source of battery capacity, at least for the time being,” said Johnston.

Between 2015 and the end of 2023, more than 250,000 residential batteries have been installed in Australia. Currently, around 17% of residential solar installations are coupled with a battery – or one battery for every six solar systems. The figure is refered to as the battery-to-solar attachment rate. In Australia, the rate was 15% in 2022.

Looking internationally, new solar systems are being coupled with batteries in leading markets at unprecedented rates. BloombergNEF figures have the rate approaching 80% in Germany in 2023, and 70% in Italy.

With rooftop solar deployment showing few signs of slowing down, the need for distributed batteries throughout the network will continue to grow. While the slow progress with VPPs, and the weak public sentiment towards them, is not encouraging, increasing battery adoption by homes and businesses demonstrate that the benefits of batteries are increasingly being understood.

A free sample of the SunWiz report can be accessed here.