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Solar, battery demand set to surge as energy prices soar, survey finds

Peter Hannam

Soaring prices of electricity and gas are prompting many more people to consider adding solar panels and batteries to give them greater control over costs, a consumer survey has found.

The study, involving almost 2500 households conducted by UMR Research for Energy Consumers Australia and KPMG, found about 34 per cent were considering adopting solar panels within the next five year compared with the 15 per cent now owing photovoltaics.

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The interest jump for batteries was even greater, with 27 per cent examining adding batteries compared with just five per cent owning storage.

"Their overall assessment is that they are not happy with the value they are getting from energy prices and the energy sector," Rosemary Sinclair, chief executive of ECA, said. "Consumers now have an option which is to take matters into their own hands, and invest in assets that give them independence."

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The survey should serve as a warning shot for energy companies that consumers aren't willing to cop increasing fuel bill when tumbling prices for solar panels and now batteries offer them alternatives. 

"Even Joe Blogs out there looking at ever-increasing energy bills is becoming less and less convinced by the conservative [argument] that we'll get your energy prices down," said Ben Larsson, a project manager who installed a 2-kilowatt solar PV unit in 2010 and added another 2.5 KW last year.

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"People are getting the sense of 'Right, I want to an option to have get some control over my energy consumption, and I'm starting to need to because it's becoming that expensive,'" he said.

Hip-pocket pressure

The ECA was set up two years ago by states and the federal government to give consumers a greater voice in an industry increasingly dominated by just three big generator-retailers: AGL, EnergyAustralia and Origin Energy.

 The survey found financial rather than environmental interests were the foremost drivers in consumers seeking solar PV. (See table below.)

The research was conducted last May before a series of grid issues, including the super storms that took out a major South Australian transmission line and triggered a state-wide blackout.

How those outages might contribute to greater consumer demand for solar and storage was "a very interesting question", Ms Sinclair said.

While not among the top motivations for shifting to solar, consumers were aware of the environmental aspect of the change including the need to decarbonise the economy, she said.

"People understand that there is a transition underway and their concern is that the transition costs as little as necessary," she said. 

Just add batteries

Mr Larsson said his first panels, aided by a generous NSW feed-in tariff at 60 cents per kilowatt hour exported to the grid, paid themselves off in just "four and a bit years".

Even with the voluntary feed-in tariffs now offered by retailers slashed to just 6-8.4 cents in NSW, the pay-off period for solar remains about five years. That's because PV prices have dropped as much as 70 per cent since he bought his first panels, Mr Larsson said. 

While batteries are not yet justified by financial criteria alone, even that mark could be crossed over the next 12-15 months as global competition in storage intensifies, the Randwick resident said.

(See survey responses for storage below.)

"People are starting to come to the conclusion we're no longer helpless and at the whim of the three big retailers, and whatever they throw at [us] in terms of an energy rate," he said.

Bruce Mountain, an energy economist with CME Australia, predicts consumers will switch to solar PV and batteries much faster than regulators predict.

He said Tesla's new 13.5-kilowatt-hour Powerwall 2, costing about $8800 before installation, offered a lower battery price per capacity than the Australian Energy Market Operator had predicted for 2040.

That meant residents in cities such as Adelaide - where power prices have doubled in the past eight years - were now be better off with panels and storage. A similar result was likely for Sydney and Melbourne, he said.

The impact on demand for electricity from utilities could be significant since a household with solar PV typically cut power usage from the grid by about a third. Adding a battery, however, slashed grid purchases by about 95 per cent, he said.

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