What are the realities of using home battery storage in 2016, how do they work and what will they mean for anyone who chooses not to buy them?

The announcement from Elon Musk’s Tesla about their new battery storage system last year generated a lot of media hype, as it was no doubt designed to. Many green energy pundits claimed the battery system was the breakthrough that would lead to a shift in the energy market from centralised polluting generation systems and costly distribution networks to personalised, sustainable energy for everyone. Others argued that the Tesla system was no more efficient or cost effective than existing options, and that perhaps people (especially in countries where electricity is cheap) would prefer not to own their own energy infrastructure but rather pay someone else to look after their energy supply.

Related: 69 ways to make your home more energy efficient

What’s changed in solar and battery storage

Photovoltaic electricity generation, better known as “solar power” has been around since the mid-1950s and used in remote locations and in the space program since just after that. Storage of electricity in batteries has also been around since about the same time, using lead acid or other standard battery technology to store electricity for times the sun doesn’t shine.

The new Tesla batteries are a Lithium based technology, commonly used at small scales in electronics, but scaled up to capture enough electricity to provide energy to homes. The product is scalable, so you could buy multiple batteries if you had greater power requirements. The basic model of the Tesla Powerwall provides 7kWh of electricity, which is about half what the average Australian home uses in a day, which reportedly works out to be 15.9 kWh (2014).

Electricity could also be drawn from the grid during off peak periods, and then stored in the batteries for peak periods. This gives Australians another avenue again to save money, even if it isn’t a 100% renewable option.

Could we have energy neutral homes in Australia?

An average home could be quite self-sufficient with three of these batteries in combination with solar panels. The batteries and generation equipment has a limited lifespan, so they will need to be replaced periodically (roughly every 10 years, in the case of the Tesla products)

Thinking about your next energy bill? Compare here to make sure you’re on the best deal

What about those who can’t disconnect from the grid?

For people who are unable to install their own solar/battery combos (for example renters, and people in higher density housing such as apartment blocks) and those unwilling to invest, what does all this mean for their electricity supply? Electricity providers have to pay for their own network upkeep and replace ageing components just as those who choose to do it themselves. These costs are usually recouped through the sale of electricity to customers, and supply charges on each bill. Usually the service fees are fixed, based on the number of customers buying electricity, so the burden is spread evenly over the service area.

With fewer people plugged into the system, the network costs to the generators and providers stay the same, because the network doesn’t get smaller if random properties disconnect. This means the amount each customer has to pay for distribution system upkeep and maintenance could increase. This may be through increased service charges, or via a higher price per kWh for the electricity itself.

This is based on the assumption that some people will go completely off the grid. However, many will continue to stay connected to their existing electricity provider, and simply supplement their existing setup with batteries – reducing their bills, but still paying network fees.

While the option for people to go “off grid” and take charge of your own electricity needs will appeal to some, being responsible for the supply infrastructure means there’s not likely to be anyone to call if problems arise – unlike the 24 hour service for most grid electricity services. The upfront cost is also off-putting for some people, but the likely increases to cover those dropping out of the system may mean that prices rise for those who are unable or unwilling to make the leap to electricity self-sufficiency.

Author comparethemarket.com.au

Launched in September of 2012, Comparethemarket.com.au – operated by Compare the Market Pty Ltd (CTM) – has teamed up with a range of Australia’s insurance providers so you can compare some of the latest deals, in one place, side-by-side. The team behind comparethemarket.com.au have experience in insurance, comparison, customer service and digital. If this was a stuffy corporate monologue, we’d tell you that we’re a bunch of subject matter experts specialising in User Experience, Customer Insights & Online Strategies. But to be honest, it’s just as accurate (and a whole lot easier) to say that we’re a bunch of people who want to make your experience with online comparison better. We pride ourselves on the fact that we’re forward-thinking, that we share an entrepreneurial spirit, and the fact that we like to have a bit of a laugh too. We’re all a bit too addicted to chocolate, but no one’s perfect, really.

More posts by comparethemarket.com.au

On this website you can compare quotes and purchase products from participating brands for health insurance, car insurance, travel insurance, life and income protection insurance, home and contents insurance, energy plans, roadside assistance products, home loans and credit cards.

We do not compare all products in the market and at times not all brands may be available. Visit each product page, as well as our Website Terms of Use, Financial Services Guide (Car, Home and Travel Insurance Products), Financial Services Guide (Life Insurance Products) and Credit Guide for detail about who we compare, how we make money and how our comparison service works for each product.

The Compare The Market website and trading name are owned by Compare The Market Pty Ltd ACN 117 323 378.