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July 2, 2025 14 mins

Australians have enthusiastically embraced rooftop solar panels. Now the government has introduced a A$2.3 billion rebate plan to get more people to install batteries at their homes, to store all of that solar power to smooth out supply at times of peak demand. This week on the podcast, Rebecca Jones talks to energy reporter Keira Wright about why the government wants more batteries, how much people stand to save under the rebate scheme, and what it all means for the country’s power supply.

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Speaker 1 (00:01):
A multi billion dollar home battery scheme kicks off today,
promising cheaper power. The problem at the moment is the
upfront costs of a battery is too high for too
many people. We're going to fix that to the sixty
seventy eighty percent of the cost is being subsidized, so
it's making a lot of sense for people to come
back and get themselves a battery. Walk around your neighborhood

(00:23):
and look up. What do you see? Solar panels? Lots
of them. The Australian government has just made it a
lot cheaper to store the energy we're collecting on our roofs.
But will this really bring Australia closer to its net
zero goals? And will it make our wallets happier? Hello,
I'm Rebecca Jones and welcome to the Bloomberg Australia Podcast.

(00:46):
I love a sunburnt country, well we all do, and
it does help explain why Australian households lead the world
in solar rooftop installations, but why many of us are
generating solar power far fewer it But that could soon change.
The government has just announced a two point three billion
dollar plan to slash the cost of installing home batteries,

(01:10):
and that's part of a bigger push to have renewable
supply eighty two percent of Australia's electricity by the end
of the decade. To discuss that and what this new
plan means for power bills and Australia's brought a climate goals,
I'm delighted to be joined today by Bloomberg's energy reporter
Kira Right, who's based in our Sydney newsroom. Kira, welcome

(01:31):
to the podcast.

Speaker 2 (01:33):
Thanks for having me back.

Speaker 1 (01:34):
First off, can you tell me why it is so
important to the government that households like yours, like mine
have batteries. What problems are they trying to solve?

Speaker 2 (01:45):
That's really the million dollar question here, Beck, or rather
in this case, they're two point three three.

Speaker 1 (01:50):
Billion dollar dollar question. That's it.

Speaker 2 (01:53):
So to answer it, I'm afraid you're going to need
to indulge me very quickly, just to give it a
little bit of a lesson on how Australia power grid operates. So,
Australia's energy grid was built to run on coal power plants,
but many of those are now forty or even fifty
years old, and this age means that they often have
issues and they are prone to break down by itself.

(02:16):
This isn't super unique. But you also need to keep
in mind that over the past decade or so, Australia's
power mix has undergone a pretty monumental shift. So in
present times the country has a huge amount of rooftop solar.
In fact, more than one in three households across the
country actually have rooftop solar panels, and most analysts estimate

(02:38):
that's actually the highest rate in the entire world. So
now that's obviously great news when you know we're talking
about working towards net zero, but it's also created a problem.
Our power grid is built to run on coal power
plants and it can't yet handle the huge amount of
rooftop solar that we now have. I promise I am
getting to your original question and to get back there.

(03:00):
This is where batteries come in. They can allow households
to store cheap solar and use it later, and that
helps to flatten some really volatile price wings and ease
the strain on the grid, which I think we're going
to discuss a little bit later.

Speaker 1 (03:14):
Australians love solar panels, don't they. But indeed, uptake of
batteries has really lagged. What has been holding it back? Kira?

Speaker 2 (03:25):
It is an interesting question because, as you point out,
Ossie's love rooftop solar panels. So, as I mentioned earlier
in twenty twenty four, one in three Ossie households had
rooftop solar, but only one in every forty of those
actually had a way of storing the excess energy that
they generated from those solar panels. So you know, things

(03:47):
like a battery, right, And if we're talking about the
barriers as to why people haven't really taken up the
call to install batteries, the number one biggest barrier just
has to be costs. So you know, home batteries they
can cost over ten thousand dollars and until now federal
support has been pretty minimal. You know, some states like

(04:09):
South Australia and Victoria they offer rebates, but it's quite
patchy across the whole country as a whole. There's also
been a lot of uncertainty about payback periods, so many
households they just haven't been sure if the savings would
justify the upfront cost in the long run. Essentially, though,
this rebate, what it means is that hooking up a
battery to your solar panels, it will become slightly more affordable.

(04:32):
And the hope here is that it will increase the
number of people who then decide to go ahead and
take the plunge and make this investment.

Speaker 1 (04:41):
I actually got a quote. I've got an electric vehicle,
and you know, when I got it, we had a
charge up put in at home, and we got a
quote for a battery. It was about eighteen thousand dollars?
Was I being ripped off? Kira?

Speaker 2 (04:54):
Like?

Speaker 1 (04:55):
What do these batteries cost before the rebate? What are
people looking at? Because you say, you've got to think
about how long we're going to be living in the
houses that we're putting these batteries in. If the average
bossy is only living in one house or owning one
house for about you know, seven or eight years, is
it worth it? What are they costing us?

Speaker 2 (05:16):
I mean, that's right back. And for that reason, it's
actually really hard to kind of give you a conclusive answer,
I'm afraid, because there just really are so many variables
at play here that affect the cost of these batteries.
But I will say that without the rebate, a standard battery.
So something that's perhaps eleven point five to thirteen point

(05:37):
five killo what hours, that could cost you around thirteen
thousand to maybe eighteen thousand dollars. So your quote was
definitely on the higher end of things. But maybe it
was a really good battery, and you know, maybe it
had a really large capacity. And the hope is that
the bigger the battery, the more energy it can store,
and then the more money that you make in the

(06:00):
long term selling that electricity back to the grid. So
for a battery that costs you around thirteen to eighteen
thousand dollars without the rebate, with a thirty percent discount,
we're seeing people potentially save between four to maybe five
and a half thousand dollars for a standard battery. That

(06:20):
being said, of course, there are cheaper and smaller batteries
on the market which could be as cheap as six
and a half thousand dollars, and the rebate would make
those come down to about four and a half thousand
dollars all up. But as I mentioned, those batteries aren't
going to be as effective in terms of long term
savings because they can't hold as much energy. So then again, households.

(06:42):
Are you forced the kind of weigh up I guess
the cost and benefit of this upfront cost, because in
any case, you know, this is obviously a lot of
money upfront, and it's going to still remain out of
reach for a lot of Aussies who are doing it
pretty tough at the moment. I think that what the
rebate is hoping to do is to make batteries more
reachable for perhaps some of those folks that you know,

(07:04):
they have a little bit of savings, maybe they own
a house and they want to invest in reducing their
power bills in the long term. It is probably also
worth noting that anecdotally some folks have reported that their
solar batteries have actually saved them, you know, between a
couple of one hundred dollars in a year to over
one thousand dollars. So again, the amount of money that

(07:26):
people can save here really fluctuates quite wildly. In any case,
Another thing that's worth noting is that this subsidy will
taper off between now and twenty thirty. So the longer
folks wait, the less cash that they will get back.

Speaker 1 (07:40):
And when we come back, well, take a look at
what difference the plan will make to the bigger picture
for Australia's energy future. This is the Bloomberg Australia Podcast
and welcome back. You're listening to the Bloomberg Australia Podcast.
Here with me Rebecca Jones. Today I'm joined by Kira Right,

(08:02):
an energy report based in Bloomberg Sydney Newsroom. Kira, we've
covered off so far on what the plan is going
to mean for my hip pocket and yours if we
decide to get one of these batteries installed at home.
Now let's blow it out a little and have a
look at the bigger picture. We have seen big clean
energy announcements before from the Albanizi government. What is making

(08:24):
this one different, if at all, to what we've seen
in the past.

Speaker 2 (08:28):
We have, indeed and look to be completely honest, it's
yet to be seen how much of a difference this
specific policy will make in terms of shifting the needle.
What I will say though, is that this specific rebate
is perhaps one of the most significant ones we've seen
in the clean energy space that actually positions households to
directly benefit. So a lot of the announcements we've seen

(08:50):
in the past, there've been more about incentivizing companies and
you know, trying to generate capital to invest in renewable solutions.
But if this policy is successful and it works the
way that it's set out to work, it hopefully will
prompt a lot of folks to hook up batteries to
the solar panels, and it could be a really great
first step to modernizing our energy grid and setting it

(09:12):
up in a way that benefits citizens rather than big corporations.
On that note, some of the folks I've spoken to,
analysts and the liac kind have pointed out that we
do need more big, large grid scale batteries to really
make a tangible difference, and it is true this policy
doesn't really do much for that. It doesn't really do
much for their energy intensive industries that are trying to

(09:34):
manage the risks of the renewable transition. But that being said,
I think that the higher uptake of small scale batteries
would also send a strong market signal to investors, which
is absolutely crucial if we're going to decarbonize the most
emissions intensive parts of the grid. So, you know, those
energy intensive industries.

Speaker 1 (09:53):
That we just spoke about.

Speaker 2 (09:55):
Also, even the small scale adds up just look at
the amount of rooftop solar with Mobilize, which has fundamentally
transformed our energy system in a pretty short period of time.

Speaker 1 (10:05):
I want to pick up on something that you just
mentioned there and zoom in a little on Australia's energy
landscape more broadly, Kira, will these batteries smaller scale, larger scale?
Are they really going to help fix these wild power
price wings that we keep hearing about.

Speaker 2 (10:24):
Yeah, I mean that's the hope. The goal here is
to flatten the energy supply and demand curve, and how
that will work is that it will allow folks to
hold onto the excess energy which is generated when prices
are low, and then they'll be able to sell it
back to the grid when those prices rise again. So
in Australia we have this thing called a duck curve,

(10:45):
which is a super fun name for a chart that
sort of looks like a duck in which the price
of electricity it declines around midday when demand is low
and the sun is out, so there is ample opportunity
to generate electricity from the sun right and then in
the evening, right when you know, maybe people are heading home,

(11:07):
they're turning on the heater. They're cooking dinner, so demand's
really high. The sun is behind the clouds, it's setting,
which means that there isn't a lot of opportunity to
generate power from solar. There's a really big divergence in
the highs and lows in terms of power pricing in
one given day. So ideally these batteries will mean a

(11:28):
less volatile energy grid that won't need to rely so
much on expensive backup.

Speaker 1 (11:34):
So that is obviously good news for the power generators
and also the retailers tangentially, But what about the battery
makers themselves? Are there any that to stand to benefit
from this new law?

Speaker 2 (11:46):
Cara, Yeah, I think that probably the most recognizable company
that stands to fit from an influx of folks buying
batteries in Australia is probably Tesla. So Tesla sells the
very popular power or battery. We also have a couple
of Chinese companies that are very popular providers here in Australia.
Sun Grow and Byd are probably the two biggest. There

(12:09):
are also a couple of smaller providers that aren't listed.
It's interesting though, I guess when we're talking about winners
and losers because power traders also stand I suppose to
lose from this. If we're talking about volatility in power
prices being reduced, it means that there's less opportunity for

(12:29):
them to make money off the really wild highs and
lows of the power market.

Speaker 1 (12:35):
If we know traders at all, they would wager a
bit on two flies racing up a wall. I'm sure
they'll be fine. That's funny that they will be, Okay,
I agree, absolutely so to recap Kira. At the end
of the day, the federal government is looking to leverage
this already insane love affair that Australians have with solar panels.
Something that's also unique to us is how volatile our

(12:57):
wholesale energy market is. The hope with this new policy
is that by making the home batteries a little bit cheaper,
that'll mean that more of us will install them. It'll
also open the door to other cool ideas like virtual
power plants and so on. This is going to help
even out the volatility in the wholesale price market, but
also make the power supply for you and I a

(13:18):
little bit more stable too, which can only be a
good thing. Finally, I have to ask you, how does
this well intentioned plan by the federal government bode in
terms of our likelihood of hitting that eighty two percent
renewables target by the year twenty thirty, which is now
four and a half years away.

Speaker 2 (13:38):
Oh my gosh, that's terrifying. It's a big question back,
But what I will say is that we've still got
a long way to go to hit that target.

Speaker 1 (13:45):
Last year, just forty.

Speaker 2 (13:47):
Percent of the power generated in Australia came from renewables,
and that amount actually didn't change from twenty twenty three.
Now the government expects the amount of renewable generation to
reach forty five percent this year, but that's obviously still
a long way off from the eighty two percent that
we're hoping by twenty thirty. The government does hope that

(14:07):
that amount will grow by around three percent annually every
year until twenty thirty. But again, one thing is for
sure there, we probably will have to pick up our
game if we're going to hit that target.

Speaker 1 (14:19):
Kira, right, thank you for joining me, Thanks for having
me back. If you found today's conversation insightful, be sure
to follow the Bloomberg Australia Podcast wherever you listen and
check for more reading on the business of energy, including
the latest reporting from Kira Right on bloomberg dot com.
Today's episode is recorded on the traditional lands of the
Wilwondery and Gadigall people. It was produced by Paul Allen

(14:42):
and edited by Chris Burke and Ainsley Chandler. I'm Rebecca
Jones and I'll see you next week.
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