The New South Wales government’s Peak Demand Reduction Scheme (PDRS) is introducing changes that could have a big impact on your household’s bottom line.
One aspect of the scheme is a financial incentive on the purchase of a home battery from 1 November 2024.
While the introduction of a new battery incentive program is a positive step, there are compelling reasons to consider a solar battery installation sooner rather than later.
Reduced feed-in tariffs and increased costs
First, from 1 July 2024, the feed-in tariff for exported solar energy in NSW will be reduced. This means the amount you earn for feeding excess solar energy back to the grid will decrease (NSW pricing regulator IPART has set a benchmark range for electricity retailers of between 4.9 to 6.3c/kWh; down from 7.7c/kWh to 9.4c/kWh in 2023-24). Compared to what you’re being charged for your energy by your provider (typically 30c-50c/kWh), this is a bit insulting.
Second, the impending ‘solar tax’ will further reduce the financial benefits of solar alone. While details are not yet clear, there will soon be a financial implication for sending surplus power into the grid in the middle of the day.
A battery allows you to store your generated solar energy for later, maximising your self-consumption and minimising the impact of a solar tax.
Combatting grid instability
The increasing reliance on renewable energy sources like solar is causing some challenges for the electricity grid. Solar panels generate power during the day, but peak energy demand often occurs in the late afternoon/evening when panels are producing very little power, if any.
Batteries can help bridge this gap by storing excess solar energy during the day and discharging it when needed. This can reduce your household or business’s vulnerability to grid instability.
Taking control
Installing a home battery empowers you to take control of your electricity bills now. By storing your own solar energy, you can reduce your reliance on the grid, particularly during peak times when electricity prices are often highest.
This translates to significant cost savings on your energy bill over time, not to mention reducing your reliance on the grid.
Benefits of buying now
Owning a battery now offers several advantages. You will be able to lock in current prices before increased demand after 1 November likely puts upward pressure on prices.
Additionally, securing your preferred battery model now avoids potential stock shortages later in the year.
Most importantly, you’ll start saving on your electricity bill from the day your battery is installed, with a typical 12.8kWh system offering potential savings of around $100 every month.
While there is perceived logic in waiting for the NSW battery incentive to commence, the changing energy landscape means there are advantages to acting now. The potential savings alone of installing a battery is significant. Plus, you protect yourself from the possible risk of battery price increases, increased installer rates or lack of stock when the incentive comes into effect later in the year. You can always choose to install a second battery with the help of the incentive when it becomes available.
