Essay by Eric Worrall
“… A possibility to discuss is lowering the 50kWh threshold to 15kWh. …”
Australia’s $2.3 billion green energy program is funding oversized batteries and blowing out in cost
Published: December 8, 2025 12.07pm AEDT
Rohan Best
Senior Lecturer, Department of Economics, Macquarie University…
There has been a massive uptake. The Clean Energy Regulator, which administers the program, told The Conversation that around 146,000 batteries have been installed in just five months.
But digging into the data reveals some major concerns about the program – many of which I previously anticipated. The average size of the batteries installed under the program is roughly double what a regular household requires to meet its energy needs. And that has resulted in a major cost blowout.
…
In September, when the Clean Energy Regulator revealed 50,000 batteries had been installed in just two months, Minister for Climate Change and Energy Chris Bowen said:
This program is working in the suburbs, in the regions and in our cities. Australians are proving the naysayers and climate change deniers wrong – they want to be part of the clean energy future.
The average system size of battery installation is more than 22 kilowatt-hours, which can cost around A$18,000. The most common system size installation is roughly 19kWh.
…
Read more: https://theconversation.com/australias-2-3-billion-green-energy-program-is-funding-oversized-batteries-and-blowing-out-in-cost-271206
Currently, batteries above 100kWh are ineligible, and batteries above 50kWh only get a discount with respect to the first 50kWh. A possibility to discuss is lowering the 50kWh threshold to 15kWh.
…
I find Rohan’s apparent implicit use of average energy requirements interesting.
In subtropical Queensland, 15Kwh of battery capacity would be more than enough for our mild winters, and a fair chunk of Fall and Spring. But in Summer pretty much every day where I live is in the low to mid 80s with high humidity. Our 6Kw of home air conditioning hasn’t been switched off since mid November.
The reverse is true in Australia’s south, where lots of home heating is required to drive back the cold and damp of our southern winters. But even in Summer, southern cities can experience dramatic heatwaves in Summer, along with the occasional cold Summer day when home heating is required.
My point is Rohan is wrong about 10KWh 15KWh of battery capacity being enough. For a battery to be any use, it has to be able to handle at least expected seasonal peaks in demand, not just average demand.
I’ve seen University academics use average when they should be using peak before, with disastrous consequences.
There was a string of embarrassing public software disasters in the early 90s, when banks and other major institutions first started going online with automated telephone and dial up services. The disaster was caused by academic consultants called in to assist using average demand to calculate system capacity requirements rather than peak demand. Despite objections from senior programmers, the average demand narrative consistently prevailed, perhaps because it produced lower cost estimates.
The result was a string of launch day failures of high profile software projects, until companies learned through bitter experience to use peak demand to estimate hardware and software capacity requirements.
If Rohan’s apparent use of average capacity is typical, if that same academic mistake of using average demand rather than peak demand for capacity calculations has infiltrated Australia’s grid planning process, Australia is in for one hell of a ride.
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no one needs to be able to go 150 miles.
Especially not to climate change conferences.
Nor do the need to travel in extreme cold or extreme heat. Roughly room temperature will do nicely. Oh and when there’s no wind either. And on dry roads only.
Oh and don’t forget to leave all “accessories” turned off.
Oh and baggage? Passengers? Leave those behind.
The question is no sooner stated than the answer stares you right in the face: Transport subsidies! Every fall and spring, swap those 50-100 kWh and 10-15 kWh batteries twixt north and south (or south and north, since you guys are upside down).
Man, do I gotta do all the thinking around this joint?
I did a bit of thinking myself – 5 seconds worth. Save transport costs by having two sets of batteries. One labelled “Summer” and one labelled “Winter”. Just apply appropriate labels at the factory depending on the location where the battery will be used!
Between the two of us, we’ve got it licked!
People who rely on averaged capacities in engineering projects are usually of average intelligence too.
Anyone who has done any traffic engineering when sizing required capacity would recognize the fallacy of using an average value. In the telephone company circuits and other equipment was engineered on various categories. High day, 10 high day, erlang (waiting time), etc. Various probability tables were designed by Bell Labs and Western Electric like Poisson and Wilkerson.
There is no proposal here that batteries would be rationed. That would defeat the purpose of the policy. The proposal is that only the first 15 KWH would be subsidised. That is just Dr Best’s opinion. He thinks, with som merit, that current subsidies induces people to by more than they need.
As to air conditioning, one of the neat features of solar is that it is at its best when most needed.
No, Rohan is justifying his proposed cutback on the basis people are installing more power than they need. I’m pointing out his reasoning is flawed.
You seem to envisage people sweltering through the night in a heat wave. But all that happens in unusual circumstances is that people have to pay for some mains power, like the rest of us.
Dr Best’s concern is that the tendency to install very big batteries is making the program too expensive. If so, then capping the amount that the gov’t will subsidise is a reasonable step. People can still pay for more if they want, and if they don’t, they can still pay for mains power in a tight spot.
Anyway, that is his view, not the government’s.
As someone who believes future anthropogenic global warming is a problem, do you really want an assumption of people’s power needs which doesn’t include an allowance for air conditioning to go unchallenged?
“The average size of the batteries installed under the program is roughly double what a regular household requires to meet its energy needs.”
This simply isn’t true, if you include an allowance for people to use air conditioning or home heating during the hottest and coldest times of the year. Whatever a “regular household” is, it doesn’t meet any reasonable definition of a real world household.
Indeed. In the early days of aviation, planes were designed with controls for the “average airman” in terms of height, reach, etc. Planes were literally falling out of the sky. Subsequent study showed that there was no such thing as an “average airman” so they introduced advanced technology like adjustable seats.
Eric,
I don’t particularly support Dr Best’s suggestion, but I think you are misrepresenting it. He is an economist, and he sees that the govt is spending a lot of money subsidising battery capacity that is rarely used. He isn’t saying that people can’t spend money on it if they want; just that the gov’t should keep the subsidy to what is on average used.. The extra capacity is not essential, because people can use mains power on the rare occasions that excess would be required. Or they can install it without subsidy.
Nick, oversized batteries are the only way to go.
1 ) At one point they’ll tell you that your batteries and energy don’t belong to you and that industry and gogovernment will have access to it wether you want it or not.
Therefore overcapacity is a necessity.
Besides my theoretical conspiracy stuff:
2) The bigger the battery ,the less charging cycles it’ll need
and the longer it’ll be in use.
Therefore using some naive fallacy.
The bigger,more expensive batteries are not more expensive in the long run as the ROI scales with the investment.
Nick, my point is the battery capacity Dr Best is proposing does not reasonably meet household requirements.
Households can draw additional power from the grid, at least while the grid lasts. The government can update the subsidy as it sees fit. But suggesting the new proposed figure of 15KWh somehow meets household requirements simply isn’t true, when you consider seasonal variation.
Personally I think putting 10s of kilograms of unstable Lithium compounds anywhere near a house is risky. An unjustified risk if this is just a token exercise which doesn’t even meet household energy requirements.
Again, averages with no idea what the variance and standard deviation is. I might remind you that an average or mean is the point where there is half of the data below the average and half above the average. Making decisions based on half the installations not needing help is ignoring people’s needs. Not very compassionate.
“I might remind you that an average or mean is the point where there is half of the data below the average and half above the average”
People recognize what you meant but there might be some mixing of average and median in that definition.
Correct. Median is the value with have the data above and have the data below.
Mean is the midpoint of the data “weight.”
If you had read the article, you would have noticed that these are not “very big” batteries.
At present the subsidy limit is 50 KWh. That is big.
They should cap the amount the Government subsidizes to ZERO!
Exactly!
How about Nick, instead of subsidizing the first 15KWh, we subsidize none of it?
Well, Eric is wailing about the suffering caused by the possibility of reducing it to 15 KWh.
“wailing”
Pushing for another Sophistry Class 1 award?
Many people will buy what the subsidy supports as they are not technically inclined to do their own analysis and accept the authority of the government as absolute.
It was always middle class welfare for existing homeowners and stuff renters and struggletown Nick so naturally the middle classes piled on with a percentage subsidy rather than a fixed amount. In that respect taxpayer subsidy for storage to try and fix the initial problem of subsidising rooftop solar and the eventuating solar duck curve should have gone into community batteries on equity and economies of scale grounds. Trust Gummint to stuff it up again but you keep on believing in command economies and Canberra eggsperts wont you?
It’s (solar) most needed to cool down the house after 4pm…when Solar capacity vanishes and less so at noon when houses are still heating up…or people aren’t even home.
Yeah, it depends on the thermal inertia of the house, and the passive cooling capability as well. 3 or 4 pm sounds about right.
Just doing a quick scan of home air conditioning power requirements, it seems a medium sized unit requires 5kW. That would be peak, so probably 3kW once the inside air has cooled down.
If the air conditioning is run during the solar power peak to pre-cool the house, you would probably only need to draw on the battery for about 3 hours most days.
15 kWh doesn’t leave a lot of margin for cooking tea, watching telly or mucking about on the Internet, or breakfast the next morning.
But…if you’re drawing on your Peak Solar Capacity to power your A/C to “Pre-cool” your home then you have Zero Solar Capacity to charge your battery unless you have installed sufficient (Dedicated) Solar Overcapacity specifically to recharge your battery in 4 hours in the first place
Picky, picky, picky 🙂
I think solar has a capacity factor of around 25% in Aus, so it needs to to be sufficiently overspecified in any case.
If my memory isn’t too far off, a typical Aus home uses around 30 kWh/day on average, so would need at least 5kW of solar panels.
If the air conditioning is drawing 3kW during the peak production period (12-2), there will be 2kW available for charging the batteries.
There will be some charging in the morning (say 9 – 12), probably averaging 2kW, and probably breaking even from 2 – 6.
15 kWh of battery is cutting it fine in hot weather, as is 5kW of panels.
The bigger problem would be in the southern states in winter, with heating requirements and only half the effective daylight hours of summer. That could well require twice the panel and battery capacity of the northern states in summer.
5kW of panels would actually be 6.6 kW as overspeccing by a third is the norm. The inverter would presumably be 5 kW, so you’d be capped at peak output, but outside the solar noon peak, and on greyer days, you’d produce more than usual.
Assuming AC draws 3kW, and your solar peaks at 5kW, then you could only run AC from about 8am ’til about 3pm without draining your battery. That leaves you 17 hours to cover, though 5am through to 8am, and 3pm to about 6pm will provide at least some solar assuming you’re not shaded. You’re still talking about a 40kW deficit though no?
A Duck search suggests a 3 kW split AC averages about 1.2 kW/h which would give you close to your 30 kWh/day average.
I believe Christmas in Darwin is lower output same as the southern states as summer is ‘hurricane’ season.
A 15 kWh battery is actually probably on the small size for a couple who work, and thus use most of their power closer to dawn and dusk and peak demand, let alone a family.
This would also depend on what else the energy was being used for at the time.
If you’re home…
Your Refrigerator uses electricity
Your Washer & Drier use electricity
Watching TV uses electricity
Running your electric range uses electricity.
Running the Electric Water Heater uses electricity.
Recharging your EV(s) uses electricity…a lot of electricity!
If you’re home during midday you’re usage will be higher.
Posting on WUWT uses electricity
Except if you want air conditioning or heating when the sun isn’t shining. Or when you need lighting, or feel like baking a cake in an electric oven.
You sound like one of those deluded cultists who believe that adding CO2 to air makes thermometers hotter!
Isn’t it amazing the number of stupid things that Nick is paid to believe.
He’s never recanted his claim that wind and solar must be cheap because the sources are free.
Now he’s back to his belief that maximum power consumption matches the power curve of a solar panel. Even 30 seconds of research would dispel that myth.
You perhaps need to be a little more worldly aware what happens with these schemes … it’s called fraud.
One person below knows from past history and the battery size issue should be setting off alarm bells with the government. Want bets that part of the reason for the large battery size is installers are installing half the size they are claiming for …. it is a win/win for installer and home owner who effectively gets a battery for free as the government pays for a bigger battery than installed. Some home owners will be in on the fraud others duped by what seems a really cheap battery deal.
Everybody knows there will be stuff all audits because it costs more for the inspectors than you save and each inspection would take hours of clawing thru equipment to see what was claimed was actually installed. An electrical inspection auditor is going to want a minimum $300 an hour plus travel expenses because it’s government. If the installers are smart they changed the equipment compliance plate usually to one of there own and now it really takes testing 🙂
Yes. Never dismiss man’s capacity for “cunning plans” that serve the financial goals of the planners.
(which, not coincidentally, is the entire motivation for the AGW conjecture)
A larger battery will last longer by virtue of it cycling less and it has some degradation “freeboard “to still be useful after 8-10years. Larger batteries cope with loads more easily and won’t need to be replaced nearly as often.
Clearly a better choice in the long run.
No it isn’t- high temperatures significantly reduce its efficiency.
I wonder how many of those 146,000 batteries were actually installed.
And how many of the claims were fraudulent.
It seems to me that crooks are really good at pulling off their scams and governments are really bad at validating subsidy applications.
Oh you mean like pink batts or in this case untried unproven coal fired gear from China?
Australia’s top-selling home battery issues limited recall over “risk of fire”
They never learn with splashing our cash around.
PS: OTOH they mean well and then comes the Gummint paperwork and bureaucracy leaving you out in the cold with cash unconditional offers from all the Mahmouds and Chans they pour in as well as the bank of mum and dad-
First-home buyers on government’s MyHome scheme struggling to get sellers on board – ABC News
Compare and contrast the lefty idiots and their virtue signalling policies trying to outwit the middle classes. It’s why we’re middle class you numpties.
Up in Tim Walz’s Minnesota, there’s a big scandal brewing.
It seems that there are a lot of NGO’s that were claiming subsidies without actually providing any services. It also seems that there were a lot of politicians who were running cover for the fraudsters, up to and including the governor.
The governor’s office was actively punishing state employees who tried to uncover the fraud.
There have to be hundreds of stories like that from while “the big man” was sleeping in his vegetable garden. Investigative reporting never recovered from its 1970s victory lap.
But I’ve got a receipt! Would I lie to the Government?
Why do you think the battery size is double what the average house needs 🙂
You install a system smaller than what is declared on paperwork and it’s a win/win for installer and customer if just a bit of fraud. They know there is stuff all chance this will ever get audited.
Is Bowen suggesting that these 140,000 zealots have cut themselves off from the grid, it doesn’t indicate much confidence in a ‘clean energy future’ if still connected, just vanity and so-called virtue signalling.
I have two 5kWh batteries. One is completely off the grid and the other on-grid. I have not paid for electricity this year. And I am now disconnected from gas so no LNG bills either..
The average cost of electricity from a subsidised solar/battery system in Australia is 12c/kWh with 7% discount rate for a 20 year system life. Grid electricity costs between 40-56c/kWh depending on the State.
So the rational choice now for any Australian that owns a house is to install battery. They can get free power from 11am to 2pm. The battery recovers its cost in 3 years.
At the present rate of battery installation, there will be no wholesale energy market in Australia within 20 years. The grid will just shuffle around solar collection and stored battery energy. There will be no heavy industry because the grid power is too expensive to be globally competitive.
All the grid scale wind and solar farms are stranded assets. They cannot make money because their demand has dried up.
https://explore.openelectricity.org.au/energy/sa1/?range=1d&interval=30m&view=discrete-time&group=Detailed
South Australian rooftops supplied 36% of the State denergy in the past 24 hours. This was by far the biggest source of energy for the day. With wind contributing 23% and coal from imports 22%.
Go down the table and look at how much of the grid wind and solar were curtailed. Their market has gone.
Residential accounts for about 25% of total electricity consumption and about 10% of total primary energy consumption that is overwhelmingly fuelled by oil coal and gas (90%). That is unlikely to change for the foreseeable future.
Bowen is a deluded fantasist.
It is not only houses that have roofs. Nearly all commercial premises have roofs as well. Lots of carparks that can be covered in solar panels rather than destroying farming land.
And you’re thinking in terms of an industrialised nation. Australia is rapidly de-indistrialising. There will not be any industry soon. Boyne, Tomago, Bell Bay, Risdon Whyalla, Port Pirie and Portland are all on life support.
The NEM wholesale market peaked in July 2008 before a number of smelters closed down.
The grid is stuffed.
Farmland is cheap and city voters don’t care about destroying farms.
City carparking is expensive and city voters care about their parking being negatively impacted.
Ergo city voters will dump all their power demands on the country as country dwellers don’t have the votes to win elections.
We won’t need to. Chris Bowen has promised that everybody will get free electricity between 11 am and 2 pm 😉
Where do you get your figures from? Try 30c/kWh to 45c/kWh depending if you’re in the cheaper coal states, or the prohibitive wind and gas reliant state aka South Australia.
Free power 11am-2pm is dependent on plan, and likely comes with not so hidden costs e.g. lousy payment for exported solar.
Actually the rational choice for Australian homeowners may soon be to go off-grid given how poor the payment for solar exports, and how high the current connection fees are, with the costs only likely to sky rocket as the Greens-Teal-Labor side fund Big Green and kill off reliable energy.
While a 13.3 kW solar system may suffice most homes, not exporting means you have no limits, other than current technology, roofspace, and price. And batteries as required, and a generator …
“20 year system life“
‘Cause everyone knows you only need to design that bridge for the average traffic and wind loads (and seismic safety margins are just a waste of money).
And of course, the average human has slightly less than two legs, and probably slightly more than one head, due to dicephalic parapagus. There’s even a book called “The Flaw of Averages.”
Glad you didn’t mention gender. In any of it’s forms.
It’s generally the extremes which kill. “Climate scientists” are besotted with averages, and go further, averaging the averages! Not unexpected, from ignorant and gullible pseudoscientists who believe they can meaningfully “average” temperatures, and also add and subtract them through the magic of Watts per square meter!
No plain old degrees of hotness – C, K, F – to be seen here, not nearly sciency enough. “W/m2, that’s what we need!”
I’m in the land Up Over, the US of A and during the summer July August, September I run my AC trying to keep my house below 75°F and close to 72°F (my daughter is heat intolerant) we wind up with a summer high bill of $760 with average usage of 49kWH A day. Not everyone needs to use That Much power every day but some may have the need and as such the system should be planned to accommodate them.
The Census crash comes to mind.
Really, really poor communication from the ABS didn’t help, either.
Short-lived systems with extremely variable loads, such as the Census or Olympics) are one of the few valid use cases for “cloud computing”.
Yep most likely the same thing.
Please elaborate a few sentence why cloud computing is best for extremely variable loads,
I didn’t say “best”, I said “one of the few valid use cases”.
Most “cloud” companies have a product where additional resources (CPU, bandwidth, storage, memory) can be rapidly ramped up to cater for peaks, then scaled back to normal levels. The size of their data centres allows this within the usual over-capacity head room, which typically doesn’t apply to in-house facilities.
50 KWh is about an EV battery.
Why is it a problem if lots of people are getting batteries about the size of an EV battery?
Isn’t that supposed to be good?
Why do EV sized batteries need to be subsidized?
The Left want EVs to be subsidised and cross connected with the grid.
Labor is about a trillion in debt though so maybe they’re rethinking how fast they bankrupt Australia?
They need to be subsidized for the same reason wind, solar and EVs need to be subsidized. Because of stupid policies put in place by stupid governments.
Batteries are electro chemical energy sources. Electro chemical reactions vary with temperature. At cold, the useable battery capacity can be as low as 50% of rated capacity, some even lower.
Having read all the calculations readers have posted, I note none have take into account either the reduction in capacity due to cold or the reduction in user capacity due to heaters.
Or course if one were foolish enough to keep the battery in the house… dot.dot.dot.
Nope. Batteries are electro chemical energy STORAGE DEVICES.
They are *not* energy sources any more than hydrogen is an energy source.
“The average system size of battery installation is more than 22 kilowatt-hours, which can cost around A$18,000. The most common system size installation is roughly 19kWh.”
Let’s use an over-optimistic assumption that the battery is charged and discharged using 80% of its nameplate capacity each day for a lifetime of, say, 10 years.
22 kWh * 365 * 10 * 0.80 = ~ 64,000 kWh. $AU 18,000 / 64,000 kWh = $AU 0.28 per kWh before taking any account of the cost of supply for charging from the grid or from rooftop solar.
This is just an example using simple arithmetic. A proper case would involve net present value (i.e. discounted cash flow) analysis using all cash inflows and avoided outflows over the life of the battery system.
It boggles the mind to imagine the excess total cost, for the nation as a whole, over a conventional system supplied by coal-fired, gas-fired, and nuclear sources needing no batteries at all.
That correct mathematical demonstration of economy of scale is also a root of socialism that turns into … thought of many examples to complete this sentence all of which would be mean to someone on the beneficial side of it. never mind.
I have never been to AU. I really can’t understand this discussion.
If a system is designed to provide power over a one day period fluctuations, what happens if you have a day of rain or heavy cloud. Would that not cause a power failure?
So, up the capacity to two days. Then if you have two days of bad weather it fails again.
If a system cannot provide reliable energy is it any good at all?
What are the design standards? What is intended purpose of these systems?
If you are just going to rely on the grid when your system fails, doesn’t that make grid operation more difficult?
Is the weather the same every day in AU? Are there no seasons?
I don’t get it.
Only if the gullible and ignorant achieve their intention to “Stop Climate!”. They obviously haven’t the brain capacity to think their mantra through.
What is wrong with Australia? Fossil fuel and nuclear don’t need battery backup. Wind and solar don’t work, the fact that they need 24/7 backup and storage is proof. This is not hard fire up all fossil fuel and nuclear generators, build new fossil fuel and nuclear generators, remove all wind and solar from the grid. Most important get the government the hell out of energy production and transmission.
The bigger the battery, the bigger the fire that destroys your house or your electric car.
I worked for a major vendor to Australian banking networks in the 1980’s. Everything was about the “peak”, in particular having capacity for the Christmas peak (and for online systems the peak time of day during peak days). This applied to software supporting the ATMs, teller systems, the core network, the back end mainframe capacity, and the transaction switching hardware/software used for electronic transactions. And they were not just thinking of “this year.” I spent 2 years working with a bank on finding and installing appropriate hardware/software that would remain viable when most retail transactions were done by card, not cash at a time when the vast majority were still cash.
How did banks fall for using average rates in the 90’s?