Greens launch $2.2 billion battery storage fund

The Australian Greens MPs

From July 1, 2019, the Greens will introduce a $2.2 billion battery storage fund providing household battery storage incentives of up to $7000 per battery (tapering down annually to July 1, 2023). Each quarter, $137.5 million will be made available for use from the fund.

Battery storage in Australia is taking off, with household battery storage uptake tripling in 2017 and expected to reach 33,000 in 2018. However, the Greens recognise the industry is still developing and this boost will improve access for households and help manufacturers reduce costs and increase production.

As the landscape and economics of battery storage are changing rapidly, the size of the grant will taper down annually and a review will be conducted halfway through the scheme to assess the size of the grant, taking into account battery prices in each state of the scheme, the resulting payback periods and the performance of the scheme. If any changes to the size of the grant in years 3 and 4 are required, 3 months advance notice will be provided.

The opportunities presented by the huge growth in distributed energy storage will be missed if the ‘behind the meter’ technology is unable to coordinate. The aggregation of home battery systems provides the opportunity to save consumers money while adding additional flexibility and security to the grid when required. To be eligible for the scheme, households will need to use qualified system providers installing battery systems that meet a set of minimum technical requirements, so batteries are safe and capable of (where technology permits) participating in a sophisticated distributed energy arrangement, such as a virtual power plant.

The goal of the scheme is to reduce the consumer’s effective payback period of batteries to as close to 3 years as possible, close to the best payback period for average solar PV systems in some parts of Australia. Guidelines will be developed to determine the precise level of subsidy provided to achieve this goal, having regard to:

  • The size of the desired battery storage system;
  • The cost of the desired battery storage system;
  • Which state the consumer is in.

10% of the funding cap each quarter will be set aside for low income households, who will be eligible to receive double the allocated grant in that year.

The scheme will work in harmony with state-based schemes by ‘topping up’ state based grants. For example, if a household receives the Victorian Labor subsidy of $4838 in 2019, they will still be eligible to receive up to $2162 from the Federal Government grant.

This policy will be fully costed by the Parliamentary Budget Office.

As stated by Adam Bandt MP, Greens climate change and energy spokesperson:

“We want to supercharge demand for batteries in households and businesses,” said Mr Bandt.

“Instead of a one-way street, our energy system needs to transform into a distributed, coordinated smart grid with battery storage at the heart of that transformation.

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“Two million Australians have already embraced solar. The next step is battery storage.

“70% of home owners with rooftop solar want batteries, but research indicates a lack of government incentives have inhibited the uptake of batteries. Instead of encouraging the uptake of batteries, the government is just spruiking coal.

“Our $2.2 billion plan will help households and businesses embrace and enjoy the benefits of battery storage and extra support will be given to low-income households to ensure they don’t miss out.

“Battery storage will help people reduce their energy bills while reducing demand on the network during peak times.

“Not only can distributed battery storage technology create virtual power plants, but they can almost double a household’s self-consumption from their solar panels.

“More battery storage will help Australia reach 100% renewables as soon as possible by keeping pollution and power prices down.”

Scheme design:

YEAR

GRANT

FUNDING CAP

1

Up to $7000

$550 million ($137.5M limit each quarter)

2

Up to $5950

$550 million ($137.5M limit each quarter)

REVIEW

REVIEW

REVIEW

3

Up to $5355

$550 million ($137.5M limit each quarter)

4

Up to $4820

$550 million ($137.5M limit each quarter)

TOTAL

N/A

$2.2 billion

Small Business:

Under the Greens’ scheme, small businesses will have access to loans up to $15,000 (tapering down to $9300 in 2023) administered by the CEFC to assist with the installation of battery storage. These loans will be repayable over a 10 year period.

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