The first evening after having his home batteries installed, Michael Chard watched the price of electricity rise with a sense of wonder and excitement.
- The solar industry has seen rising home battery sales
- This is credited to a “perfect storm” of high power prices, blackouts, environmental concerns, and “lost faith in the grid”
- Some households are getting multiple batteries to make money “day trading” electricity
“I was ecstatic,” he said. “I’m thinking, ‘If I have this every day I don’t have to work anymore’.”
Over a few hours, the wholesale price of electricity on the National Electricity Market (NEM) crept from below $1 per kilowatt-hour to above $17 per kWh.
While his Brisbane neighbours were buying electricity to heat their homes and cook their evening meals, Michael was selling.
“Every 10 minutes I saw the money going up in $3 to $4 intervals,” he said. “By the end of the evening I’d made $101.”
Home battery sales are rising with energy prices, and some home owners are adding multiple systems to make more money selling back to the grid when prices are high.
Michael, who works in rubbish collection and owns an 800-square-metre suburban block, had his sixth home battery installed last week.
The amounts earned aren’t huge, but experts see it as a sign of what’s to come, as the transition to renewables accelerates, generation is decentralised, and potentially millions of homes become miniature power plants.
In the industry, the phrase being used to describe this future of electricity trading is “the internet of energy”.
Here’s how it works.
A ‘perfect storm’ for battery sales
Home battery sales have shot up in the past year.
Solar energy consultants SunWiz — who publish an authoritative annual report on national battery uptake — have been tracking the proportion of households connecting batteries to the grid.
Historically, about 5-10 per cent of households installing solar have added a battery system as well.
Then, in mid-2021, it jumped to 20 per cent and has stayed high since.
“We might end up hitting approximately 50,000 installations of home energy storage systems in 2022, compared with about 30,000 in previous years,” SunWiz founder Warwick Johnston said.
Natural Solar, one of Australia’s biggest home battery installation companies, has also seen strong growth in demand.
In June 2020, it sold 81 residential batteries. In June 2022, it sold 504.
“The percentage of customers who buy solar and batteries is increasing rapidly,” Natural Solar chief executive Chris Williams said
“I think, in the next five years, we could see 1 to 2 million batteries, if not more, installed across the country,” he said.
That’s a big claim, but other installers are similarly confident.
RedEarth Energy — a Brisbane company that makes and installs home batteries — had its busiest day two weeks ago, when it sold a million dollars worth of equipment, its chief executive, Charlie Walker, said.
For the past few years, it was thought that battery sales would go up when the price of installing a new system significantly fell.
The price hasn’t fallen, but sales are going up. What’s going on?
Several different factors appears to have subtly but decisively tipped consumer sentiment, experts say.
Russia’s invasion of Ukraine has seen gas prices soar and Australian households paying more for electricity.
Faced with the threat of blackouts and more volatility, households have bought batteries to reduce their reliance on the grid, the head of ANU’s battery storage and grid integration program, Lachlan Blackhall, said.
This wasn’t a purely financial decision, he added.
“Many people in the community are aware of climate change and keen to be part of the solution,” he explained. “There’s a desire for self sufficiency and resilience.”
Mr Johnston agreed the decision to get batteries was not always financial, but often emotional.
Impatience with high battery prices might also be a factor, he added.
“People have been waiting for battery prices to come down for a long time. They’re saying, ‘Let’s just do it now.'”
Mr Williams credited the uptake to the decline in solar feed-in tariffs around mid-2021, which meant solar owners were getting less money exporting to the grid in the daytime.
“The tipping point for me was when customers lost faith in the grid,” he said.
“Customers have invested all this money in solar systems to sell electricity to the grid when they’re at work, and suddenly they’re getting nothing for it.”
These customers have responded by using more of the solar energy they generate, or only selling it in the evening, when prices are higher.
Either way, the solution has been to get a battery.
How battery owners make money, sometimes
During this winter’s energy crisis, wholesale prices have been as low as a few cents per kWh during off-peak times — late at night or the middle of the day — and have risen as high as $17 per kWh in the early evening.
These aren’t the prices most household are paying, due to their agreements with energy retailers, which buy at wholesale prices from the NEM and charge another amount to customers.
Some retailers, however, are now offering households the opportunity to buy and sell at wholesale prices, in return for a monthly subscription fee.
The largest of these is Amber Electric, which says customers with both solar and batteries have earned significantly more than those with just solar this winter.
“We’ve had quite a few customers who have been earning more than $200 per month from their systems,” Amber co-chief executive Chris Thompson said.
The company’s 4,000 customers with solar and/or batteries have earned $300,000 from exporting to the grid in May and June this year.
Meanwhile, customers with neither had higher-than-usual bills.
About 280 customers are taking part in a program where Amber controls their battery, charging and discharging according to the predicted movement of wholesale prices.
If cloudy weather is on the way, for instance, solar generation will be lower, which will see the price of electricity rise. Amber then charges the home battery with cheap electricity to later sell back to the grid.
Adam Sloan from the Central Coast is one of these customers.
He says he’s made $220 in two months selling power generated by a 17-kW rooftop solar system, and stored by two home batteries, with a combined capacity of 27 kWh.
“One night in particular they discharged and I made $87 in credit,” he said.
If he includes the cost of the electricity he hasn’t had to buy, he calculates that, over two months, he is up by about $400.
“With programs like these, it helps with the return-on-investment conversation,” he said.
“I’m considering adding a third battery, when we get our second EV [electric vehicle]”
‘Gamifying’ household electricity trades
These earnings may help justify getting a battery, but won’t pay it off any time soon.
A standard battery system of at least 10kWh costs more than $10,000, and this outlay can take 5-10 years to see a return on investment, depending on the price of electricity in that time.
Most of these savings come from avoiding power bills, rather than through selling electricity back to the grid.
Michael Chard in Brisbane, for instance, no longer pays $1,000 per quarter for electricity to power his home.
“Now that electricity’s gone up to more than 12 per cent from July 1, I hope to see more of those savings,” he said.
However, for many battery owners, the amount earned was less important than the fact they were getting money for seemingly nothing, RedEarth’s head of special projects, Matt McKee, said.
“What we find is it’s actually the game of it all,” he said.
He sees a future in which a household’s relationship with electricity is very different to what it is now.
Instead of it being an essential utility with a fairly constant quarterly bill — like water — it will become an asset that can be generated, stored and traded throughout the day.
The process of trading within this “internet of energy” will be “gamified”, Mr McKee said, with households able to compete to make the most money from their “personal power plants”.
To an extent, this is already happening, with RedEarth and Amber customers having access to dashboards that show wholesale prices on the NEM, and the amount of electricity their household has generated, consumed, bought and sold over the day.
So will we become a nation of energy day traders, anxiously scanning the skies and optimising our power bills?
Probably not, said Professor Blackhall.
“I don’t see many customers willing to be involved in the trading of electricity,” he said.
“People want to be able to come home and turn the lights on and cook dinner.”
However, these services are a sign of what’s to come: “In the next 20-30 years we’re going to see a significant uptake of distributed energy resources.”
Ultimately, he added, that will mean cheaper power for everyone.
“This transition to renewables and storage is, far and away, the lowest-cost energy system,” Professor Blackhall said.
Solar haves and have-nots
But there’s a catch: This uptake will not be even.
Stories of some Australians earning money from high power prices while others fear debt, shows there’s a widening gap between those with solar and batteries and those without.
This inequality is exacerbated by another factor: housing affordability.
People who are renting, or living in townhouses or apartments, are typically unable to have solar or batteries installed, and are locked out of the power bill savings that flow from this.
Last year, the CSIRO predicted that up to half of households in the NEM would have rooftop solar by 2050, and more than half of these would have batteries, under the most-progressive uptake scenario.
That’s a lot of households with batteries and solar, and equally a lot with neither.
And a good number of these households will be renting.
A 2018 EnergyLab report found owner-occupiers were seven times more likely to have solar on their roof than renters.
In the years since, this gap has widened, said the report’s author, EnergyLab co-founder James Tilbury.
“I haven’t seen any policies to close the gap,” he said.
“It’s not just a matter of having money. If you’re renting, it becomes harder to install these new energy assets.”
Adam Sloan says he sometimes cops abuse on Twitter when he posts about selling power to the grid.
That’s technically true, but it’s not battery owners’ fault that power is so expensive.
In fact, prices would be higher without Adam and others making their batteries available to export to the grid and help stabilise supply.
Michael Chard is also aware of this inequality of uptake — despite his example, his parents refuse to get solar.
“Because they’re old-school,” he said. “Instead, they come to my place and enjoy the heating and everything because they say it’s free power.”