What Financial Return Could Solar and a Home Battery Deliver in Australia in 2027?

Start with two separate investments

First calculate the financial return from solar panels alone. Then ask what the additional battery costs and how much additional annual saving it creates. Comparing the combined package only with doing nothing can hide an uneconomic battery add-on.

• Solar-only payback: net solar installation cost ÷ annual solar-related bill savings.
• Incremental battery payback: net additional battery cost ÷ additional annual bill savings and any other verified battery revenues, net of added expenses.
• Combined-system payback: entire net installation cost ÷ combined annual savings, useful but not sufficient for deciding if storage is worthwhile.

These are simple payback calculations. They are not investment returns, and they do not account for financing, discount rates, maintenance, replacement or future tariff changes.

Where the savings actually come from

Self-consumption: using rooftop solar directly avoids buying electricity at the applicable retail rate. Exports: excess solar can earn feed-in tariff credits, where offered. Storage: a battery shifts some otherwise-exported solar into later hours, reducing grid purchases, but it also sacrifices those export credits and loses some energy during charging and discharging.

Some households can also benefit from time-of-use tariff differences, demand-charge reduction or a virtual power plant (VPP). These benefits depend on actual contracts and usage, and should never be assumed without a tariff-specific calculation.

Illustrative Australian household: solar versus solar plus battery

But what did the battery add? The extra battery cost is A$8,000, and its additional modelled savings are A$600 per year. Its incremental simple payback is 13.3 years (A$8,000 ÷ A$600), before further costs, degradation and financing. In this fictional case, solar-only has the stronger financial case. A different home or tariff could produce a different result.

A more useful battery savings calculation

For a battery charged mostly from surplus rooftop solar, use this illustrative annual framework:

Annual battery benefit ≈ (battery energy delivered to home × avoided import price) − (solar energy diverted from export × forgone feed-in tariff) + verified VPP or tariff benefits − extra operating costs.

For example, if a battery delivers 2,000 kWh per year and avoids electricity purchases at 30 cents/kWh, that creates A$600 of gross avoided purchases. If charging used approximately 2,222 kWh of solar energy, assuming 90% round-trip efficiency, and this energy could otherwise have earned 5 cents/kWh in export credits, the foregone credit is about A$111. The illustrative net benefit is about A$489 per year, before maintenance, degradation and any additional revenues. Tariff rates and delivery volumes are assumptions, not market benchmarks.

What changes in 2027?

Australia's Small-scale Renewable Energy Scheme provides eligible rooftop solar installations with Small-scale Technology Certificates (STCs). The published solar deeming period declines from five years in 2026 to four years in 2027, which can reduce the certificate entitlement for an otherwise comparable new installation.

For eligible batteries under the Cheaper Home Batteries Program, the published battery STC factor is 5.7 for January–June 2027 and 5.2 for July–December 2027, compared with 6.8 for May–December 2026. Battery STC benefits also taper for capacity bands above 14 kWh. These are certificate factors, not dollar rebate amounts; actual benefits depend on program rules, usable capacity, installation timing and certificate value. Confirm the current schedule before signing.

State and territory support may exist, but availability, eligibility and stacking rules vary. Ask for every incentive to be separately itemised in your quotation.

Five factors that can make or break battery economics

• Evening electricity use: a household using more electricity after sunset may have more opportunities to use stored solar.
• Retail and feed-in tariffs: the spread between avoided imports and lost exports matters more than a headline feed-in rate alone.
• Right-sized storage: a larger battery may sit partly unused, producing diminishing returns.
• Efficiency, degradation and warranty: usable capacity and performance change over time; ask for the battery's warranty throughput and retained-capacity terms.
• Backup and VPP settings: holding battery charge in reserve for blackouts can reduce daily bill savings. VPP contracts can affect control, payment and availability of stored energy.

Questions to ask before buying

• What are the separate net prices for solar, battery, backup hardware and installation?
• What yearly consumption and half-hourly usage data were used in the forecast?
• What import tariff, feed-in tariff and price increases are assumed?
• How many kWh will the battery realistically discharge each year?
• Are efficiency, degradation, warranty limits and replacement costs included?
• Does the quote show solar-only, battery-only incremental and combined payback?
• Is the battery configured for blackout backup, and which circuits are protected?
• Which federal and state incentives have actually been applied?

Frequently asked questions