Are Solar Batteries Worth It? How to Work It Out
A battery is worth it when the money it saves each year, over the years it will actually last, is more than it costs you after the discount. Here is how to test that with your own numbers instead of a salesperson's.
A home battery is worth it when the money it saves you each year, multiplied by the number of years it will actually perform, is more than it costs you after the government discount. Whether that is true for you depends on four numbers that sit on your own bill: how much power you use after the sun goes down, what you pay for grid power, what your retailer pays you for exported solar, and how much solar you have spare to charge the battery.
This guide shows how to put those four numbers together. It does not quote a payback period, because a payback figure that ignores your usage and your tariff is meaningless.
How a battery actually saves you money
Without a battery, solar you do not use at the time it is generated goes to the grid. Your retailer pays you a feed-in tariff for it, which is usually a small fraction of what you pay to import power. Later that evening you buy power back from the grid at the full import rate.
A battery captures the solar you would have exported and gives it back to you in the evening. Each kilowatt-hour it delivers saves you the import rate, but costs you the feed-in tariff you would otherwise have earned on it. The saving per kilowatt-hour is the gap between those two rates, adjusted slightly for losses.
That gap is the single most important number. When feed-in tariffs were high, batteries rarely made sense because exporting paid nearly as well as storing. As feed-in tariffs have fallen, and some networks have started charging for exports at busy times, the gap has widened.
The four inputs you need
| Input | Where to find it | Why it matters |
|---|---|---|
| Evening and overnight usage (kWh per day) | Your smart meter interval data, from your retailer or distributor’s customer portal | Sets the most the battery can usefully deliver each day |
| Spare solar (kWh per day) | Your solar exports on the same data, or your bill’s “exported” line divided by days | Sets the most the battery can charge from solar each day |
| Import rate (c/kWh) | Your bill or your plan’s fact sheet. On a time-of-use plan, use the evening peak rate | What each stored kWh saves you |
| Feed-in tariff (c/kWh) | Your bill or plan fact sheet | What each stored kWh costs you in lost export income |
Two more come from the battery quote: the usable capacity (kWh, not the headline “nominal” figure) and the price after the discount. The warranty document gives a third: the number of years and the total energy throughput the battery is warranted for.
Step 1: Work out how much the battery can shift each day
The energy a battery shifts on a typical day is the smallest of three numbers:
- Its usable capacity.
- Your evening and overnight usage.
- The solar you have spare to charge it.
Do this for summer and winter separately. In winter your spare solar shrinks and your evening usage often rises, so a battery that fills every day in January may only half fill in July. An average of the two seasons is a reasonable annual figure.
Step 2: Work out the saving on each kilowatt-hour
Batteries lose some energy charging and discharging. The round-trip efficiency, which is the share of the energy put in that comes back out, is listed on the battery’s specification sheet. To deliver 1 kWh in the evening you give up slightly more than 1 kWh of exports.
Saving per kWh = import rate − (feed-in tariff ÷ round-trip efficiency)
For example, with made-up round numbers chosen only to show the arithmetic: an import rate of 30c, a feed-in tariff of 5c and an efficiency of 90% give 30 − (5 ÷ 0.9) = about 24.4c saved per kWh delivered. Put in your own rates.
Step 3: Turn that into an annual saving
Annual saving = kWh shifted per day × saving per kWh × 365
Then adjust it honestly:
- Take off the days it will not fill. Cloudy spells and winter reduce charging.
- Take off degradation. Capacity falls over the years; warranties typically guarantee a minimum share of original capacity at the end of the warranty period. Averaging the saving over the life of the battery rather than using year one is more realistic.
- Add virtual power plant income only if you have a contract for it, and only for the length of that contract.
- Check your tariff will still suit you. Some battery owners move to a time-of-use plan, which changes the import rate you are saving.
Step 4: Compare the saving with the net cost and the warranty
Simple payback (years) = battery price after discounts ÷ annual saving
Now compare that with the warranty:
- Payback well inside the warranty period: the battery is likely to pay for itself if it performs as warranted.
- Payback close to the warranty period: marginal. Any drop in performance, change in tariffs or failure outside warranty wipes out the return.
- Payback longer than the warranty: on the numbers alone it is unlikely to pay. Buy it for backup, independence or to support the grid, not to save money.
Also check the throughput warranty (total MWh the battery is guaranteed to deliver). If you plan to cycle it once a day, divide the throughput by your daily kWh to see how many years it covers. The warranty ends at whichever limit comes first.
What the Cheaper Home Batteries Program changes
Since 1 July 2025 the federal Cheaper Home Batteries Program has reduced the upfront price of eligible batteries installed with solar. The discount is delivered through small-scale technology certificates, like the solar panel rebate, and the installer normally takes it off the quoted price. The discount is smaller per kilowatt-hour for larger batteries and steps down each year to the end of 2030. The current rules, and how state programs sit on top, are in our solar rebates guide.
What the discount changes is the net cost in step 4, which is why the program has pulled payback periods in. It does not change the saving per kWh, so a household with little evening usage or no spare solar still will not get much out of a battery, however cheap.
Situations where a battery tends to pay better
- High evening usage: families at home in the evening, electric cooking, heat pumps or pool pumps running after dark.
- A low feed-in tariff and a high peak import rate. Check your plan’s fact sheet for both.
- A solar system that exports a lot of what it generates.
- A network tariff that charges for exports at busy times, which a battery helps you avoid.
- Access to a virtual power plant that pays for battery use on terms you are comfortable with.
Situations where it tends not to
- Low evening usage, or a household that is out most of the day and asleep early.
- A small solar system that rarely has spare output.
- A high feed-in tariff, so exporting pays nearly as well as storing.
- A battery sized well beyond your overnight usage “for the future”. Unused capacity is paid for but earns nothing.
Questions to ask before you sign
- What is the usable capacity, and what is the price per usable kWh after the discount?
- What does the warranty guarantee: years, throughput and end-of-warranty capacity? Who honours it if the installer closes?
- Is backup included, and which circuits does it cover?
- Is the installer accredited, and is the retailer a signatory to the New Energy Tech Consumer Code? Both are conditions of some rebates.
- Is the battery capable of joining a virtual power plant, and am I obliged to join one?
- Will my network allow the full battery output to export, or is there an export limit?
Once you have a quote, compare your electricity plan too: the right battery on the wrong tariff can still leave money on the table. Our solar hub covers how solar plans and feed-in tariffs work, and the energy comparison hub covers how to compare the plan itself.
Frequently asked questions
Are solar batteries worth it in Australia?
For some households, yes. A battery earns its money by letting you use your own solar at night instead of buying grid power, so it pays best when your evening usage is high, your import rate is high, your feed-in tariff is low and you have spare solar to charge it most days. If any of those is missing, the payback stretches out, often past the warranty.
How long does a home battery take to pay for itself?
There is no single answer, because payback depends on the battery's price after the discount, how many kilowatt-hours it shifts each day, and the gap between your import rate and your feed-in tariff. Divide the net cost by the annual saving worked out in this guide, then check the result against the battery's warranty. If payback is longer than the warranty, treat the battery as a lifestyle or backup purchase rather than an investment.
What size battery do I need?
Size it to the energy you use between late afternoon and the next morning, capped by the solar you have spare on an average day. A battery bigger than your overnight usage sits partly empty, and one bigger than your spare solar never fills. Your smart meter interval data, which your retailer or distributor can provide, shows both.
Does a battery keep the power on in a blackout?
Only if the system is designed for it. Many batteries are installed without backup, and they switch off with the grid for safety. If backup matters to you, ask for it in writing: which circuits are backed up, how the changeover works, and what it adds to the price.
Is it better to add a battery or increase my solar system?
If you export a lot of solar at a low feed-in tariff, a battery lets you use more of it. If you import a lot during the day, more panels may be the cheaper fix. Look at your interval data: daytime imports point to more panels, evening imports with daytime exports point to a battery.
Can I get paid for joining a virtual power plant?
Some retailers and battery makers pay credits or a monthly amount for letting them draw on your battery during grid peaks. The payments vary widely and come with conditions, such as how much charge they can use. Count them in your sums only for the length of the contract you are offered.
