Home batteries: What you need to know before you buy

Electricity bills in Australia are rising, and many households are feeling the strain. Meanwhile, more frequent extreme weather has made power outages a growing concern, with blackouts sometimes lasting hours or even days. 

Australia leads the world in rooftop solar, with over 3.6 million homes installing solar PV to cut grid dependence. But much of that solar is exported when demand is low. A home battery stores this energy for use later—typically at night—when grid electricity costs more. 

Energy use habits are also shifting. Instead of just cutting daytime costs, more people are actively managing their electricity, using time-of-use tariffs and smart systems. With rebates, loans and VPP trials now available, batteries are becoming accessible to more households. 

This guide explains how home batteries work, how to choose one, what they cost, and how to maximise their value. 

What is a home battery system? 

A home battery is a rechargeable device that stores electricity so you can use it later. This energy might come from your solar panels, or from the electricity grid when prices are lower. Then, during high-demand periods, your battery supplies power to your home, reducing your need to draw from the grid. 

For homes with solar panels, batteries store excess daytime power that would otherwise go to the grid. This suits households that use most electricity after sunset. Most modern systems can be retrofitted, though older setups may need new inverters. 

Home batteries can be set up in different ways: 

• Grid-connected systems are the most common. These work alongside the electricity grid, solar panels and your household circuits. 
• Hybrid systems combine battery storage with solar and grid backup in a more integrated setup. 
• Off-grid systems are used in remote areas where no connection to the main electricity grid is available. These rely entirely on solar and storage and need careful design to avoid running out of power. 

There’s also an important distinction between a full energy storage system (ESS), which is ranges from 5kWh and upwards, is hardwired and designed to power your home day and night, and a battery backup, which is typically a smaller standalone storage system (1-5kWh) only intended to provide limited electricity during blackouts. 

There are several types of battery chemistry, but lithium-based batteries are the most widely used for home energy storage. It's compact, relatively efficient, and widely supported by installers and manufacturers.  

Common energy storage battery chemistries 

• Lithium Iron Phosphate (LFP): Long-lasting (10–15 years), safe, widely used in EVs and home batteries. 
• Ternary Lithium (e.g., NMC, NCA): Higher energy density, good for tight spaces, but shorter lifespan. 
• Lithium Titanate (LTO): Very durable and fast-charging, but costly—mainly used in commercial systems. 
• Flow Batteries (e.g., vanadium, zinc-bromine): Scalable and long-lasting, but lower efficiency. 
• Salt (Sodium) Batteries: Emerging, promising for low cost and environmental impact. 

Benefits of installing a battery for your home 

The biggest advantage of a home battery is the ability to use your solar energy when you actually need it. Instead of exporting excess solar to the grid during the day for a small feed-in tariff, you can use it in the evening when power from the grid is more expensive. This shift can save hundreds of dollars a year, depending on your electricity plan. 

Another benefit is greater energy independence. You become less reliant on energy retailers and more in control of when and how you use power. For people who value self-sufficiency, or who live in areas with regular blackouts, this peace of mind can be a big selling point. 

With the right system, your home battery can also power essential appliances during a blackout. That could include lighting, refrigeration, internet, or even medical devices. But not all battery systems offer backup functionality by default – you often need a separate backup circuit installed, and your battery needs enough capacity to cover your needs during an outage. 

There are also benefits that extend beyond your household. By using stored solar during peak periods, you help reduce demand on the grid. This can lower the need for expensive, polluting gas-fired peaker plants and reduce the need for costly infrastructure upgrades. This supports a more reliable and sustainable electricity network for everyone. 

Some households can even get paid to share their stored energy with the grid through Virtual Power Plants (VPPs). These programs allow batteries in different homes to be remotely coordinated, creating a virtual energy resource that can help stabilise the electricity system during high-demand events. Participants receive financial incentives, and in some cases, upfront discounts on battery installation. 

Is an energy storage system or backup battery right for your home? 

Not every home will benefit equally from a battery system, so it’s worth weighing up your situation before taking the plunge. Start by asking yourself: 

• Do you already have rooftop solar? Batteries work best when paired with solar panels. 
• When do you use most of your power? If you’re home in the evening and run appliances at night, a battery could save you more. 
• Are blackouts common in your area? If so, a battery with backup can keep essentials running. 
• How much energy do you need to get through a blackout? To help you work this out, the SunSPOT tool created by UNSW with support from the Australian government, is a good place to start. 
• Are you on a time-of-use electricity plan? Batteries can help you avoid high peak rates. 
• Are there government rebates or trial programs in your area? These can reduce the upfront cost and improve payback. 

You should also think about your long-term plans. If you expect to buy an EV, install more solar, or electrify your heating and cooking, a larger battery might make more sense. Also, if you are purchasing an EV with V2G or V2H functionality, you may want to consider a module-based battery that integrates this capability. 

How much does a home battery cost in Australia? 

Battery prices have come down in recent years, but they’re still a big investment. According to Solar Choice, prices in May 2025 are typically: 

• 3-7kWh systems: $5,000 to $8,000 
• 8-12kWh systems: $9,000 to $13,000 
• 13-18kWh systems: $14,000 to $20,000 

Of course, this differs according to battery type and other installation considerations. Installation usually adds another $2,000 to $4,000, depending on your home setup and whether electrical upgrades are needed. Always ask for a detailed quote that lists every component and step of the install. 

Payback time depends on how much solar you generate, your electricity usage patterns, and how much support you get from rebates or VPPs. In the right conditions, households can see savings within 7 to 10 years. But for some, especially those with low usage or fixed-rate tariffs, the economics may be less attractive. 

Choosing the right battery system for your home 

Not all batteries are the same. Here’s a list of main home battery features to consider: 

• Capacity (kWh): How much energy a battery stores. A typical household might need 10 to 13kWh. If you want to buy and sell energy via a VPP, bigger is probably better. 
• Power output (kW): How fast the battery can deliver energy. Higher output supports more appliances at once. 
• Usable vs nominal capacity: Always check how much of the total capacity is usable (a buffer is typically built in to protect battery health.) 
• Cycle life and warranty: Look for systems rated for 5000 cycles or more and warranties of 10 years. 
• Backup support: If you want blackout protection, confirm the system includes it. 
• AC or DC system: DC-coupled systems link the battery to the solar panels before converting the energy to AC. This setup is more efficient and suits new solar-plus-battery installs but may need extra equipment. AC-coupled systems work well with existing solar, connecting the battery after energy is converted. They're easier to retrofit but slightly less efficient due to extra conversions. 
• Integrated vs modular: Some systems are fixed-size, others let you add more later. This might be important if you have space to add more capacity down the track. 

Well-known brands in Australia include the Tesla Powerwall, Sonnen, BYD, Alpha ESS, and Sigenergy. Each offers different features, pricing and local support options, so read reviews and compare warranty conditions carefully. 

Installation considerations for home batteries in Australia 

Where your battery goes matters. Most are installed in a garage or on a shaded external wall. They should be kept out of direct sun and away from water, with good airflow and safety clearances. 

Your home’s electrical system can also affect your options. If you have a three-phase supply, you might need a different inverter or multiple battery units to get full performance. 

Only use an SAA-accredited installer. This ensures your battery is installed to Australian standards and qualifies for rebates and warranties. The installer will also provide the correct paperwork for your energy provider and local distributor. 

Don’t forget to ask about future-proofing your system. If you think you might want to add more solar or a second battery later, mention this upfront. 

How to get the most out of your home battery 

Once your battery is up and running, smart management is key. Most systems include apps that let you track solar generation, usage, and battery status in real time. 

• Shift energy-hungry tasks like laundry and dishwashing to the daytime. 
• Adjust settings seasonally, as solar output drops in winter. 
• If required, only top up your battery overnight if your plan has off-peak grid pricing. 
• Ensure your battery has the correct settings to use during a blackout
• Join a VPP to earn credits or payments. 
• Keep an eye on software updates, as some brands add new features remotely. 

Talk to your installer about setting your system to charge in the cheapest way possible, or to prioritise backup readiness if outages are likely. 

Battery rebates, incentives and financing 

While many homeowners may have been holding back from buying a battery due to the high upfront cost, the good news there are now several state and federal programs to help reduce costs: 

• Cheaper Home Batteries program: This federal home battery rebate is available from 1 July, 2025 and discounts both on-grid and off-grid home batteries by around 30 per cent. The rebate is provided through your battery retailer or installer. 
• State, territory and local government home battery schemes: There are numerous other government incentives and schemes to help with the installation of home batteries. Find out more here. 

You can also explore green loans, or bundle a battery with a new or expanded solar system to improve overall value.

Common home battery pitfalls and how to avoid them 

While there are numerous benefits to be had in installing a home battery, there are also some pitfalls to dodge. Avoid these traps: 

• Getting a battery that is too small: You’ll still need a lot of grid power. 
• Getting a battery that is too big: You might not use it enough to make it pay. 
• Employing an non-SAA-accredited installer: A poor job can void your warranty and be dangerous. 
• Connecting the battery to the wrong circuits: If you want power in a blackout, make sure the right circuits are covered. 
• Misunderstood tariffs: Understand your energy plan before you commit. 

Good advice from a trusted installer or energy advisor can save you from costly mistakes. 

Final thoughts: Is a home battery system worth it? 

Home batteries are a smart way to make better use of your solar, reduce electricity bills, and gain peace of mind during outages. But they’re not for everyone. 

If you use most of your power in the evening, have regular blackouts, or are on a time-of-use plan, a battery might pay off sooner than you think. But even for others, the non-financial benefits, like energy independence or emissions reductions, might still make it worthwhile. 

If you're considering installing a home battery, start by: 

• Looking at your solar production and daily usage
• Getting a few quotes from experienced installers
• Checking rebates and local support programs
• Thinking ahead to future energy needs 

Battery technology is improving quickly. Installing one now could future-proof your home and keep you ahead of the curve as Australia’s energy system continues to change.