Half of all Australian households could adopt solar by 2018, finds the Climate Council

Already boasting the world’s highest level of residential solar penetration, Australia could soon see 50% of its households adopting solar+storage and moving off the grid by 2018, finds a report released this week by the Climate Council.

The non-profit Climate Council’s report found that storage capacity is set to grow 50-fold within a decade, and dramatic cost reductions –which have fallen at a rate of 14% every year between 2007 and 2014 – will accelerate, particularly as lithium-ion producers scale up production.

This perfect storm of affordable storage and cheaper solar will strike Australia first, where the nation already has solar penetration among 15% of homeowners. The Climate Council believes that rate can rise to 50% within three years.

The Climate Council report predicts that half of Australian households will adopt a AU$10,000 battery system with a payback on initial outlay of 10 years. The phasing out of FITs across Australia is convincing more and more homeowners to invest in battery storage technology in order to maximize the value of their solar array.

"Anyone who has PV on their roof knows they’re paid a fraction – maybe a tenth – of what it costs them to buy power off the grid," said Andrew Stock of the Climate Council. "If they have a tool, a battery, that can allow them to store the surplus power during the day and use it at night, it means they’re going to get greater control than they already have over their power bill."

This disruption to Australia’s traditional energy mix has already spooked some of the existing network operators, the report found, with some companies actively altering how they price power in an attempt to discourage the uptake of solar+storage – a move Stock called "perverse".

"Battery systems, coupled with PV, can actually help networks get much better use out of their assets by smoothing out the demand on the grid. That should mean that network companies don’t need to invest anywhere near as much at adding capacity in the future, and they get better use out of their existing capacity."

Compelling network operators to view solar+storage as an opportunity rather than as a threat is the biggest looming challenge ahead for solar and storage in Australia, Stock added. "If they see it only as a threat, that will put back Australia from potentially being a leader in the uptake for up to a decade."

Currently some 1.4 million homes in Australia have a solar array fitted, but the number of households with a supportive storage battery fitted is far lower, estimated at around just 500. However, as costs for batteries fall – the completion of Tesla’s gigafactory in Nevada is expected to accelerate cost reduction – this rate will rise dramatically, the report found, serving to boost solar deployment and the wider adoption of electric vehicles.

At the recent All Energy exhibition in Australia, the nation’s Minister for the Environment Greg Hunt hinted at the possible introduction of storage subsidies to help grease the wheels of what many are certain will become a multi-billion dollar industry in Australia.