Prices of solar batteries have been falling steadily over the years. While they are now more accessible, the general view is that they are still a tad high. For example, it will cost between $3,300 to $13,500 to install a solar battery system that’ll power a residential house.
Many solar installations are without solar batteries as many people feel that batteries are too expensive. With the feed-in tariffs, some even feel that they have no need for storing electricity in batteries.
However, solar batteries are not as expensive as before. Also, feed-in tariff values are diminishing day by day, such that storing excess electricity in batteries for later use may make more financial sense.
In this article, we’ll look at the cost of different solar batteries in 2022 to help you find one that’ll suit your budget and needs.
We’ll also discuss why solar batteries cost as they do and why they may be worth it despite being relatively pricey.
Let’s get started!
How much do solar batteries cost in 2022?
The cost of solar batteries varies greatly depending on the type of battery, the storage capacity, and performance ratings. However, most residential solar battery installation costs range from $3,000 to $13,500.
Below is a price comparison chart for some of the best solar batteries.
Even when looking at the cost of solar batteries, you should also have an eye on performance ratings. This is because you wouldn’t want a cost-friendly battery with an abysmal performance.
In fact, solar battery costs are informed by the performance ratings. That is, generally, the higher the performance of a solar battery, the more expensive it’ll be.
Some of the performance ratings to look out for when comparing solar battery costs are:
- Continuous Power Rating. It’s the amount of electricity that the battery can output continuously. It tells you how many appliances it can power at the same time.
- Depth of Discharge (DoD). Drawing 100% of a battery’s charge will shorten its lifespan. The Depth of Discharge (DoD) is the percentage of battery power that can be discharged without affecting its future performance. So, the higher the DoD rating of a battery, the more of its charge you can draw at a time without harming it.
- Round Trip Efficiency. This is the percentage of electricity stored that can be discharged. It is a measure of electrical losses when charging and discharging. The higher a battery’s round trip efficiency, the more of its stored electricity can be discharged as useable electricity.
What makes up the price of a solar battery?
Solar batteries are generally expensive because of what goes into them. The materials needed to make the electrodes that store and release energy are quite expensive. However, the price you’re quoted for a solar battery will depend on many factors ranging from its chemical composition to its capacity.
Typically, the factors that determine the cost of a battery installation are:
- Chemical composition
- Storage capacity
- Number of batteries
- Critical load panel
- Installation cost
1. Chemical composition
Batteries are classified based on their chemical composition. So, when we talk of “types of solar batteries”, we look at different solar batteries based on their chemical materials and how they are made.
The most common ones are lead-acid batteries and lithium-ion batteries. Generally, lithium-ion batteries are more efficient and have a longer lifespan, so they are more expensive than lead-acid batteries.
Lead-acid batteries
These batteries use a negative electrode made of porous lead and a positive electrode of lead oxide, both immersed in an electrolytic solution of sulfuric acid and water. They were first invented in 1859, so they’ve been in the market for a long time. Lead-acid batteries are the most commonly used type for rechargeable applications.
The biggest advantage of lead-acid batteries is the relatively low cost. However, they have lower round trip efficiency, meaning they waste more power when charging and discharging.
They also have lower DoD, meaning they need to be charged often. Since constant charging and discharging degrades a battery capacity, lead-acid batteries have a shorter service time.
Lithium-ion batteries
First introduced in 1991, Lithium-ion batteries are a more recent innovation in rechargeable battery technology. In this battery type, lithium ions move from the positive electrode to the negative electrode when charging and back when discharging.
They are more efficient than lead-acid batteries because they have higher depth of discharge (DoD) and round trip efficiency. They also require less maintenance than lead-acid batteries. As a result, they are more expensive.
There are two types of lithium-ion batteries – nickel manganese cobalt (NMC) and lithium iron phosphate (LFP). Generally, the NMCs are slightly cheaper than the LFPs.
2. Storage capacity
The battery capacity is how much energy it can store. Energy is measured in kilowatt-hour (kWh). The higher the battery rating in this regard, the more expensive it’ll be. That is, a 10kWh battery will cost more than a 5kWh battery.
3. Number of batteries needed
The more solar batteries you install, the more your energy storage cost. Energy usage differs from household to household. If your energy consumption is high, you may need to install more than one battery because one may not hold enough stored energy to cover your needs.
The number of batteries you’ll need depend on:
- Your energy usage
- The storage capacity of the batteries
- How many appliances the batteries will power
With 13.5 kilowatt-hours (kWh) stolage capacity, just one of the Tesla Powerwall 2 is robust enough to cover the energy needs of many households.
4. Critical load panel
A battery system that will power an entire home will be cost-prohibitive because it’ll require installing multiple batteries. So, the most common thing is to have the battery power only essential circuits.
This involves installing a sub-panel and channelling the most important things in your house to it so that in case of a power outage, only those things are powered by the battery.
The sub-panel (called critical load panel) does not cost much, but its installation is because of the electrical work involved. In all, it can add $1,000 – $2,000 to the cost of your battery system.
5. Installation cost
When purchasing a solar battery, you also have to factor in installation cost. These costs significantly increase the cost of the battery system.
Taking the Tesla Powerwall 2 as an example, the standalone unit costs $8,500, but Tesla now has its price at $10,500, covering the unit and its installation.
The time you install the batteries can also affect your overall costs. If installed when installing your solar panels, all the electrical work can be done together, and installation costs will be lower.
But if you’ve installed a solar system already, then a fresh round of electrical work is required for the installation of your battery, and this will raise labour costs. There is also the issue of getting fresh permits for the battery installation.
Are solar batteries cost-effective?
Solar batteries are relatively expensive, so including them in a solar system raises the cost of going solar. It’ll also make it take longer for solar savings to cover the cost of going solar.
Regardless, installing solar batteries are worth it and makes financial sense in many scenarios.
These include:
- When you are ineligible for feed-in tariff
- When the feed-in tariff rate is low
- When electricity rate is high
- When the size of your solar system is big
Solar batteries are cost-effective when you’re ineligible for feed-in tariff
If you are ineligible for solar feed-in tariffs, solar batteries will help save the excess electricity that your solar system produces from going to waste.
The feed-in tariff is the payment you receive for sending excess electricity produced by your solar system to the grid.
There’ll be times when your solar system will produce more than you consume. The feed-in tariff regime allows you to sell this excess electricity. Thus, feed-in tariffs allow your solar system to earn you a passive income.
Sadly, not everyone with a solar system is eligible for feed-in tariffs. You must meet some requirements for you to qualify for feed-in tariffs. The requirements usually vary from state to state.
For example, in South Australia, to be eligible for feed-in tariffs, you must consume less than 10MWh of electricity per year and have a maximum output of 10kVA (30kVA for three-phase homes).
If you cannot get the feed-in tariff, the only thing that will prevent the excess electricity that your solar system produces from going to waste is installing solar batteries. You can store the excess electricity in the batteries for use later when solar production is below consumption.
If the feed-in tariff rate is low, solar batteries are more valuable
With low feed-in tariffs, your excess solar production will not be valuable. But installing batteries makes your excess electricity valuable again.
Sadly, the feed-in tariff rate in Australia has been falling and is expected to fall even more in the future. For example, the minimum feed-in tariff in Victoria was 60 c/kWh in November 2009. By 2021, it fell to 10.2 cents per kWh, and in 2022, it fell further down to 6.7 c/kWh.
Since you may have to buy power from the grid when your solar production is low, it doesn’t make financial sense to send excess electricity to the grid when the feed-in tariff is very low. It’s better to store the excess electricity in solar batteries.
If electricity rates are high, using solar batteries is cheaper
If the rate of buying power from the grid is high, you’ll still be faced with high electricity bills even with your solar system. This is because you’ll be fed by the grid in off-peak periods when your solar production is lower than your consumption.
Installing solar batteries helps prevent this (high power bills when having a solar system). The excess power that your system produces in peak periods is stored in the batteries, so in off-peak periods, you can draw power from your batteries.
Will solar batteries get cheaper?
Solar batteries have significantly reduced in price over the years as battery technology has improved. So, solar batteries are expected to get cheaper because there will be more innovations.
With advances in battery technology, it is possible to make batteries smaller and lighter and produce them at lower costs. For example, the costs of lithium-ion batteries have steadily fallen since they hit the market. In 1991, a 1kWh lithium-ion battery cost $7,500, but by 2018 that has reduced to only $181.
There is potential to use retired EV batteries for other applications, including solar batteries. The promoters assure that retired EV batteries will work well in solar applications because all that is needed is energy storage – there is no mileage problem.
Considering the fact that retired EV batteries are cheap, recycling them into solar batteries will reduce the cost of solar batteries by 50%.
Our Guides to Solar Batteries and More
We have a series of unique guides to solar, solar finance, batteries and more, if you are looking to do more in-depth research into solar batteries check the below:
1. Best Solar Battery Products
The best solar battery products you need to know in 2022 are the Sonnen ECO 5, Discover 48V Lithium, Tesla Powerwall, Crown CR430 FLA, and FullRiver DC400-6 with a sealed AGM battery. These batteries are excellent for storing solar energy for later use.
2. What Are Solar Batteries? How Do They Work?
Solar panels can now produce electricity at a lower cost than traditional power stations burning coal and gas. However, fossil fuels can be used at any time, while solar panels are only productive during the day. To remove this limitation, solar panels can be equipped with battery systems, converting them into a 24/7 power source.
3. Do I Need a Solar Battery? Are They Worth It?
Solar panels can now produce electricity at a lower cost than traditional power stations burning coal and gas. However, fossil fuels can be used at any time, while solar panels are only productive during the day. To remove this limitation, solar panels can be equipped with battery systems, converting them into a 24/7 power source.
Next Steps…
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