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Are Solar Batteries Worth the Cost In NZ?

By Aniket Bhor on in Solar Battery Information

Are Solar Batteries Worth the Cost In NZ?

Solar batteries are generally classified as a ‘solar accessory’, meaning they are an optional component of any system. And yet, in New Zealand, they nearly cross the line between ‘optional’ and ‘essential’. Let us discuss what makes solar batteries important, and if they are worth the added system cost.

Why Do You Need Solar Batteries?

Solar batteries are important for two main reasons:

1. Energy During Nights and Cloudy Days

The biggest, and perhaps only serious limitation of solar power is its intermittent nature. In that sense, solar panels are somewhat like humans - they don’t work at night, and they don’t feel like working on dull, cloudy days - when they generate a measly 10-25% of their rated output.

To make things worse, the periods of the day when your power consumption rises are the same periods when your solar panels are inactive. You come home from work and switch on the TV, lights, microwave, etc., and your panels have signed off for the day.

Similarly, the most conducive hours for solar are also those when you need minimum power. Your panels are generating maximum power in the afternoons, when a lonely refrigerator is often the only appliance running.

Here’s a graph showing this mismatch:

solar power generation vs energy consumption graph
That said, many utility companies in the country allow you to sell your excess solar power to them. Although the buy-back rates of solar power and retail rates are usually different, the availability of this policy means you can still enjoy substantial savings from solar - even without installing batteries.

But in New Zealand, bill savings were never the primary reason for the growing demand for batteries. Let’s find out why batteries are becoming so popular.

2. Energy During Power Outages

According to our solar calculator, installing batteries with solar panels drops the ROI of the system from 12% to 8%. In simpler words, adding a battery reduces your savings. And yet, demand for solar batteries has shot up through the roof.

The Tesla Powerwall, for instance, has regularly faced supply shortages. Study shows that the solar battery market is poised to reach an astounding USD 540 million by 2030, from just 148 million in 2021. In New Zealand, even grid-scale battery projects are taking off.

Obviously, most battery customers don’t seem to care about reduced savings. The reason? Batteries can be an excellent weapon against power outages - especially those caused by extreme weather events. 

Recently, the cyclone Gabrielle that wreaked havoc in the country left over 200,000 people without power - some of them for days. Homeowners that had solar batteries installed were able to keep the appliances in their homes running even through the disaster.

This resilience provided by batteries is usually the most important motivation for homeowners to install solar batteries.

How Much Do Solar Batteries Cost?

Solar batteries come in a variety of shapes and sizes, and therefore varying prices. Kiwis have dozens of battery models to choose from, and a typical solar battery in NZ can cost anywhere from $10,000-$20,000.

That said, the price you will pay for a solar battery will depend on several factors. Let’s take a look at the factors that decide the cost of a battery:

Size/Capacity of the Battery

This is an obvious factor - a bigger battery equals a higher price. Batteries are usually rated for their energy storage capacity in kWh. You can choose between batteries that are smaller than 1 kWh and those that are over 20 kWh in capacity. The size you need will depend on the size of your house, your energy consumption pattern, etc.

An average Kiwi home needs over 20 kWh of energy per day, and usually half or more of it is used during the evenings and mornings. This makes a 10-15 kWh battery system suitable for most homes. You can check the size of battery that your home needs on our solar calculator.

Battery Chemistry

Until a few years ago, lead-acid batteries dominated the energy storage market. However, thanks to some obvious advantages, lithium batteries have become mainstream over the past decade. Lead-acid batteries are significantly cheaper than lithium-ion batteries, but most installers recommend lithium chemistries for their long life and maintenance-free operation.

But wait, that’s not all. Even lithium batteries can have different chemistries. The more traditional Li-ion batteries use the Nickel-Manganese-Cobalt (Li-NMC) chemistry - a tried and tested technology. Some modern battery makers are shifting to the Lithium Iron Phosphate chemistry (LFP), which is safer, and lasts even longer than NMC batteries.

Batteries from high-quality brands that use LFP chemistry can cost slightly higher than NMC batteries from comparable brands.

Specs and Features

One can say that modern batteries are a lot more than just batteries. A battery constitutes of cells that can convert electrical energy into chemical and vice-versa. However, modern battery systems include plenty of electronics that grant smart features to the product. 

For instance, nearly all name-brand solar batteries allow remote monitoring via smartphones. Homeowners can check the status of the battery and sometimes even control its parameters from the comfort of their sofas. Some batteries even have smart sensing software that can prefer one type of load over the other to conserve energy during a blackout.

The design of a battery is another aspect that can affect the pricing. Older batteries simply had two projecting terminals where you’d need to crimp cables, attach lugs and then connect while bracing yourself against sparks. Instead, modern batteries offer a plug-and-play design, where you can connect the battery to your home or to an appliance as easily as plugging in your laptop charger.

Conclusion: Are Solar Batteries Worth Buying?

Solar batteries have been around for a long time now. Most solar batteries in the past have been installed on off-grid homes or cabins, where grid power is non-existent. The cost of batteries has deterred most grid-connected homeowners from giving them a shot; but that is changing rapidly. 

The dropping costs of both battery and solar equipment are making the tech popular among homeowners everywhere. Yes, adding a battery system to your solar panels does increase the pricing, but in most cases, the increased cost is worth it. 

The main reason for this is the remarkable resilience it provides from power cuts - a desirable thing in a world that becomes increasingly warmer, and thus increasingly unpredictable.

Showing 4 comments

Posted by Kristy on 16th May 2024 09:04:44

Hi Simon, I guess the benefit of solar batteries is more to be able to use stored power during 'peak demand' times when power is at its highest price, rather than using the battery power in the middle of the night when there is off-peak power prices. Peak demand times are normally in the morning from 7am to 10am then in the evening 4pm to 8pm. Generally the goal is to size a solar array that is large enough to generate as close to 13.5kWh of solar everyday, even in winter to be able to utilise the battery. Other ways to utlise the battery is by taking advantage of the 'free hours of power' schemes which many retailers have. Contact Energy have 3 hours of free power during the middle of the night, which the battery will be able to fully charge in this time, giving you 13.5kWh that you can use at times of the day when energy is more expensive. If you are off-setting power that would normally cost you 30 cents, this arrangement alone (i.e. not taking into account storing solar), would save you $4.05 every day or $1,478 each year. Any solar that you manage to store and then use during peak power time will equal even greater savings.

Posted by Simon on 15th May 2024 15:26:58

I calculated the return on a $16,000 installed Tesla Powerwall. Even if I could get 10kWh out of it each day (unlikely in winter) from my 10 kW solar rig (so one hours charging), it would only make $1.20 a day at my 12cents/kWh night rate. So about $400 a year. So 40 years to pay it back.

Posted by Kristy on 11th Jul 2023 13:35:34

Hi MB, I agree with you, SEANZ has asked policymakers countless times to change the way 3 phase properties are metered, to what is known as instantaneous net metering for 3 phase homes. We do hope they will listen one day, and as you said, maybe once more properties go to 3 phase, there will be more voices that the policymakers can't ignore. See more here: https://www.seanz.org.nz/unlocking_distributed_generation

Posted by MB on 11th Jul 2023 13:18:20

Unfortunately NZ uses a different metering standard than most of the rest of the world which makes it financially unviable to install a battery on a 3-phase property. I expect the proportion of 3 phase homes will increase as the popularity of EV's continues to grow so it seems mad that our legislation discourages 3-phase owners from investing in battery systems.

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