Why the Rise in Australian Residential Energy Storage?
A new report charts Australia’s rapid rise in residential battery storage adoption.
SunWiz, a market research firm covering Australia’s solar photovoltaic (PV) and storage markets, recently released its annual Australian Battery Market Report charting record growth in residential battery energy storage systems (BESS). The country added 47,100 installations totaling 589 megawatt-hours (MWh) in 2022, up 55% from 2021.
The 300 MW/450 MWh Victorian Big Battery project in Australia is one of the world’s largest battery storage sites. Image used courtesy of Neoen
The new installations bring Australia’s cumulative total to 180,000 ESSes since 2015, topping 1.92 gigawatt-hours (GWh). Comparatively, around 3 million homes have solar power, but one-third of battery installations are retrofitted to existing solar systems.
The record-breaking numbers spread across nearly all Australian states, except for South Australia, which has a population of over 1.8 million but only accounts for about 7% of the country’s total 26 million residents as of September 2022.
A historical chart of Australian battery storage installations since the mid-2010s. Image used courtesy of SunWiz
Increase in Ratio of Battery to PV Installations
Top-level numbers aside, a key finding of SunWiz’s report was the 15% ratio of ESS to PV installations, nearly double the 8% attachment rate in 2021. This metric translates to one ESS commissioned for every seven solar systems installed last year.
In total, 314,000 PV systems were registered in 2022. With the 15% attachment rate, that equates to 47,100 ESS installations. SunWiz’s report mentions that the considerable growth in ESS installations coinciding with contracted PV installations is tied to electricity prices and a global trend toward energy resilience.
SunWiz reports that the average residential battery storage capacity installed last year was 12.5 kilowatt-hours (kWh) per system. Most of those systems are grid-connected, though there’s also a significant volume of off-grid systems (typically providing larger individual capacity).
Part of this growth is tied to federal solar incentives, such as the small-scale technology certificate and feed-in tariff programs. Individual states offer several incentive programs as well.
On average, Australian states increased their battery installations by 57% in 2022. Image used courtesy of SunWiz
There are a few caveats to SunWiz’s data. Without a universal incentive program for ESS installations, the government relies on voluntary disclosures from installers. Nearly all solar installations are tracked due to government incentive programs. SunWiz’s battery storage estimates, though not complete, relied on data sources such as the Australian Energy Market Operator’s Distributed Energy Resource Register, the Clean Energy Regulator, service providers, manufacturers, and wholesalers, and SunWiz’s market connections.
Large-scale Battery Storage Developments
SunWiz’s report notes a few recent and upcoming market developments for large-scale storage. Mornington BESS, a 240 MW/480 MWh utility-scale project to power 40,000 homes in Victoria, is scheduled for completion this year. A massive 700 MW/2,800 MWh battery was approved last year to replace a coal power plant in New South Wales (NSW), serving 150,000 homes at peak output levels. The 500 MW/1,000 MWh Wallerawang Battery 9 project, also in NSW, secured approvals to build a BESS on-site of two coal-fired generating units decommissioned in 2014. Shell Energy recently acquired the development rights for the project.
And as EE Power covered earlier this year, the 200 MW/400 MWh Western Downs Battery project recently started construction in Queensland.
Australia is already home to some of the largest battery installations in the world. The Hornsdale Power Reserve was completed in 2017 with 100 MW/129 MWh of capacity, marking the largest lithium-ion battery in the world. It expanded in 2020 to add another 50 MW/64.5 MWh. For another example: The 300 MW/450 MWh Victorian Big Battery project came online in 2021, consisting of 210 Tesla Megapacks with enough power for 1 million homes. The developers unveiled a proposal last year to build a second battery west of the facility, boosting the capacity by up to 600 MW.
All of these projects support Australia’s national renewable energy transition plan, aiming to reduce greenhouse gas emissions by 43% from 2005 levels by 2030—up from 21.6% as of June 2022—and reach “net-zero” status by 2050.
Data compiled by OpenNEM shows that renewables accounted for 35.9% of the country’s electricity generation between April 2022 and today, while fossil fuels claimed 64% (rooftop solar claims 9.6%, utility solar is 5.8%, wind is 12.6%, and hydro is 7.9%).
Share of energy generation in Australia by source. Image used courtesy of OpenNEM
Overall, SunWiz’s findings highlight a strong market consistent with global trends.
Comparatively, in the United States, the Energy Information Administration (EIA) projects utility-scale battery storage capacity to jump significantly to 30 GW by 2025—up from 7.8 GW as of October 2022.
America’s large-scale battery adoption is a few years behind Australia, though. Pre-2020, the country’s largest BESS project was just 40 MW. But California’s 250 MW Gateway Energy Storage System kicked off a broader market in the following years, bolstered by Florida’s 409 MW Manatee Energy Storage site. Around two dozen other projects are scheduled to be completed by 2025, with some as high as 650 MW.