Solar Battery Price and Payback Time
With rising electricity prices more people want to find out about the solar battery price in Sydney and NSW. They want to know if solar batteries are worth the cost.
A lot of articles have been written on this, and often conclude that a solar battery is a marginal investment.
Some state a payback time of 10 years or more. This can be true depending on the type of battery, the battery size, and if you are adding to an existing solar power system. Many people read this and think solar batteries are not worth it.
Here we look at the solar battery price and show why solar batteries are worth it – and work out the solar and battery payback time.
Cost Per kWh
Current Solar Battery Price in Sydney
A solar battery price is usually expressed as $ per kWh (kilo-watt hour) (kWh) and is between $900 to $2,000 per kWh. Our 10.2kWH Sofar battery with a 6.64kWh solar system is $12,888. The battery cost by itself is $990/kWh including the hybrid inverter needed to connect the battery to the solar system.
The 13.5kWh Tesla Powerwall battery with a built-in inverter is $1200/kWh.
The Sungrow SBR 9.6kWh solar battery is $1227/kWh including the 5kW hybrid inverter required for it.
Several factors effect battery pricing and we look at these in more details later.
Solar Battery Price and Payback Time Simplified
We are going to examine clearly and simply the solar battery price and payback time when the battery is purchased as a package with a solar system.
When buying the battery and the solar system together, it is single is a single investment. The payback on this investment needs to be measured by the total savings generated by the solar and battery together.
More people than ever who do not have solar, or have a small, older solar system, want to buy a battery with a new solar system and want to know the price. More importantly people want to know if buying a solar battery and solar system is worth it and what their payback time is.
What is the Payback Time?
Solar & Sofar Battery for $12,888 - Payback Time 4 Years
Our package of a 6.64kW solar system with a 10.2kWH Sofar battery costs $12,888 and the estimated payback time is under 4 years.
Yes, correct – under 4 years. The SolarBright selling price for this sized battery package in Sydney in August 2023 is $12,888 including a standard single storey installation. (Please note this price will change in the future, and this price here does not constitute an offer to sell the package at this price after August 2023). Check our latest battery special offers HERE.
Yes, there are assumptions made in calculating this solar battery price payback – these are fully detailed below.
Let’s look at the numbers.
$13,888 Special - Our Best Ever Solar and Battery Deal
9.6kWh Sungrow Solar Battery and Premium 6.6kW Solar System Special Deal
$18,290 Savings in 10 years
Working Out the Solar & Battery Payback Time.
These figures are for the 10.2kWh Sofar solar battery with the 6.64kW Max Power solar system purchased for $12,888. We take the battery and solar together as a single investment.
In total the solar and battery generate yearly savings of $3,265.68 for the household. Thus the estimated payback time is just3.95 years.
Assuming a degradation factor 2.25% per year the battery will generate an estimated $18,290 in savings over 10 years (after paying for itself).
The battery warranty is 10-years. If the useful economic life of the battery is 13-years your total savings are estimated at $26,268. These estimated savings do not consider any rises in the price of electricity.
Assumptions for Calculating payback
System Estimated Production and Electricity Costs
Here are the assumptions behind the solar battery & solar system payback time calculations:
| CEC Zone 2 Daily Production Factor/kW of Solar System | 3.9kWh |
|---|---|
| Solar System Size kW | 6.64kW |
| Average Daily Production (CEC prod. Factor x 6.64kW) | 25.896kWh |
| Estimated Yearly Production | 9452.04kWh |
| Battery Cycles Per Day | 1 |
| Electricity Cost/kWh | $0.36 |
| Feed in Tariff | $0.07 |
Electricity Usage Assumptions
In this scenario we have assumed the household will use 95% of the power produced per annum at $0.36/kWh and the other 5% will be exported to the grid getting $0.07/kWh. We calculate the annual savings generated by the solar and battery system as follows:
| Usage Assumptions | % of Production | kilowatt-hours (kWh) | $ Value per Year |
|---|---|---|---|
| % Per Year Consumed | 95% | 8979.438 | $3,232.60 |
| % Per Year Exported | 5% | 472.602 | $33.08 |
| Total Per year | 100% | 9,452.04 | $3,265.68 |
Factors that will Affect the Price of Solar Batteries
The cost of a solar battery is usually expressed as $ per kWh of storage capacity. The cost per kWh is affected by several key factors. Looking at these factors can help homeowners make informed decisions when considering the installation of solar battery storage.
Battery Capacity: The size of the battery, measured in kilowatt-hours (kWh), directly affects its cost. Larger capacity batteries can store more energy and provide more power for night time use. Therefore, higher capacity batteries typically come with a higher price tag.
Location: Where you are located also influence the price. Batteries are more expensive in regional areas reflecting higher transport costs and higher installation costs.
Brand and Manufacturer: Reputable and established brands often come with a premium price due to their reliability and performance. Lesser-known brands might offer more affordable options. Battery buyers should consider warranty periods and supplier reviews before deciding.
Installation Costs: The installation process involves labour and equipment. A more complex installation, such as the integration with existing solar panels and the electrical system, can influence the overall cost. Also consider your battery and solar supplier. Are they a reputable installer with a long history, or a flash in the pan two men in a van outfit who will be cheaper.
Incentives and Rebates: Government incentives, subsidies, and rebates play a crucial role in reducing the upfront cost of solar battery systems. These incentives can vary over time and impact the final price for consumers. Some state governments have battery incentives in place however there is no federal government program equivalent to the scheme for solar panels. Also, manufacturers may provide incentive to buy their solar battery. At the time of writing (Aug 2023) Tesla have a $750 rebate on all Tesla installs before Dec 31 2023.
The Future
Will Battery Prices come Down?
While it is hard to predict the exact future of solar battery pricing, lets look at what is happening to the cost of battery raw material – lithium. The cost of lithium will influence the future price of solar batteries.
As world demand for electric vehicles is soars, in June 2023 lithium producers warned that future supply may not meet demand.
Reuters reports in the linked article: “Albemarle (ALB.N), the world’s largest lithium producer… expects global lithium demand to exceed supply by 500,000 metric tons in 2030. Various consultancies and other producers have slightly different projections, but all warn of a looming shortage.”
looking at the lithium ore price chart we see currently lithium prices have come down from peaks seen in 2022, and this is being reflected in some solar battery prices. If the predicted shortages come into play, we will see battery prices climbing.
Solar Battery Conclusion
Yes, we admit we have a vested interest in selling solar panels and solar batteries. This what we do to save our customers thousands of dollars off their power bills. We also have a vested interest in giving our customers straight forward, no-nonsense advice. That is the basis of our 15-years of success in solar.
We currently have battery pricing down to as low as $990/kWh. We see the payback time on the Sofar 10.2kWh battery with the 6.64kW solar come in at just under 4 years.
Given the fact electricity costs in Australia are expected to continue to rise, and lithium producers are expecting global shortages to affect pricing, we conclude now is a goodtime to invest in a solar and battery.
The solar and battery package we looked at generates estimated savings of $3,266 per year. Waiting 18 months for battery prices to falls means you forego $4,899 in savings. We cannot foresee battery prices falling enough to make up for the loss while waiting.
Disclaimer:
The prices mentioned in this article are correct as of August 2023. The pricing of the battery and solar package may change over time. The battery and solar prices shown in this article are not to be construed as on offer to sell at these prices at any date after the publication of this article.