For most households, having a battery fitted will cut the cost of electricity by between 30 and 70 percent. For example, if we typically spend around $2,000 a year, a battery would save us between $600 and $1,400 annually.

Normally, without a battery, we just use around 30 to 40 percent of the solar we generate onsite. The rest is fed back onto the grid at those miserly feed-in tariffs. With the addition of a battery, we can lift our self-consumption up to 60 or 80 percent. That’s to say that we’re using loads more of our free sunlight ourselves rather than selling it back for pennies.

Now, as for the price — a quality 10kwh battery system will start around about $7,000 prior to installation. But here’s the silver lining: as of July 2025, the Federal Battery Rebate will help shave off the upfront expense by about $330 per usable kilowatt-hour. That rebate accounts for a lot and means we can look forward to our investment breaking even sooner.

There’s More Than Just Bill Savings

Here’s something that perhaps we might not have thought of: there are energy firms that have Virtual Power Plant (VPP) programs. When we join one, we permit them to use our stored power from our battery in times of high demand, and we get credit or pay in exchange. It’s just one way of making our battery do even more for us.

Some homes or small enterprises also face demand charges, which are fees based on their maximum electricity usage. Batteries can reduce those peaks, and that saves money as well.

And while it might not directly save us cash, having backup power during blackouts is a huge bonus. If our area gets outages, a battery can keep the fridge running or the lights on when the grid goes down. That peace of mind is worth a lot.

What Affects How Much We’ll Save?

Our savings are reduced to a few factors. If most of our usage of electricity is during the day when our solar panels are producing energy, then a battery will not pay much. But if our peak energy usage is later at night or early morning, a battery can truly be lucrative.

Our solar system’s size is also counted. Bigger solar systems produce more excess energy to store for the future. On the other hand, if our solar arrangement is just enough to fulfill our daylight needs, we might not have much in reserve to store.

The size of our battery is key as well. A bigger battery holds more energy but costs more upfront. The trick is to find the right size to fit our household’s needs without paying for more than we’ll use.

Electricity rates are another consideration. If our supplier charges a lot during peak hours and pays hardly anything for feed-in, then the gain from storing our solar power and using it later becomes substantially higher.

Lastly, never overlook the government incentives, such as the Federal Battery Rebate, which make the entire package cheaper.

A Real-Life Example

Let’s take an example. Let our house use around 20kWh of electricity a day, and our 5kW solar system provides around 20 to 25kWh per day in summer.

Without a battery, we can consume 7kWh of solar in the daytime and export the remainder with a limited feed-in credit. But with a 10kWh battery, we can store all of the surplus solar and consume it in the evening.

That would reduce our grid electricity usage from 13kWh to approximately 5kWh daily. At 35 cents per kilowatt-hour, that’s approximately $2.80 per day saved, or approximately $1,000 a year.

If we’re paying about $10,000 to have the battery system installed, but we qualify for the $3,300 Federal Battery Rebate, then our net cost is about $6,700. Based on our annual savings, our payback period is about six or seven years. Then we’re receiving free electricity from our battery for the rest of its lifespan.

What Else Ought We to Remember?

Battery efficiency isn’t perfect — we lose about 10 percent of our energy during charging and discharging. Also, batteries don’t last forever. Most lithium-ion batteries will perform well for 10 to 15 years before their capacity starts to drop.

Installation fees can depend on what solar setup we already have and how hard the work is. Although batteries require very little maintenance, it’s always a good idea to get them inspected occasionally in order to keep them running properly.

How to Make Sure We Get the Most Out of Our Battery

To get the biggest savings, it’s helpful to have an idea of how much electricity we use at different times and how much solar our panels generate over a year. The right size battery is important — too small and we’ll continue to buy lots of grid power; too big and we’re paying for unused capacity.

If our electricity contract is more expensive during the peak hours, a battery will be worth it. And if we can enroll in a Virtual Power Plant scheme, we might even get paid by selling off our stored electricity from our battery.

There are even smart-controlled batteries that charge and discharge automatically when it is best, making our savings as effortless as possible.