Updated on November 12, 2025
If you’re interested in solar panels, there’s a good chance that a solar consultant has tried to upsell you a solar battery. Does that sound familiar?
They’re just trying to save you money long-term.
Solar batteries are great for collecting the unused energy your solar system produces during the day for use at night. They’re also incredibly useful for backing up your home during a power outage. Not to mention how they can generate passive income for your home when you sign up for a virtual power plant (VPP) and take advantage of variable feed-in rates.
If that sounds like a lot, don’t worry. PSC Energy has you covered. We install solar batteries all day, every day. It’s what we do. We’re here to guide you through the rocky terrain of information. While we are a touch biased (we sell solar batteries), we’re going to present an unbiased perspective on battery storage.
In this article, you will learn about:
- How Do Solar Batteries Work?
- How Does a Solar Battery Save Money?
- What is the Cheaper Home Batteries Program?
- How Does a Virtual Power Plant (VPP) Lower My Energy Bills?
- FAQ: Batteries
By the end of this article, you’ll thoroughly understand how a solar battery will lower your electric bills.
How Do Solar Batteries Work?
Here’s what they do:
Store Excess Solar Energy
During sunny days, especially in the summer, your solar panels produce more energy than your home can use.
Instead of sending that excess energy back to the grid for a feed-in tariff, your solar battery stores it for use at another time.
Powers Your Home at Night (or On Cloudy Days)
A solar battery helps combat solar panels’ greatest foe: shade. Cloud cover creates shade and solar doesn’t work at night. A battery helps you troubleshoot this inherent problem.
Other Solar Battery Advantages
And while we all love the financial benefits of solar batteries, it’s important to note how important they are in reducing greenhouse gas emissions by incrementally shifting energy use from power plants to your own roof.
Another thing that solar batteries do is offer blackout protection in the event of a power outage. The stored energy can keep medical devices, WiFi, and of course, the lights on when there’s a storm.
If you’re interested in solar batteries, you might want to check out the following article titled, Are Solar Batteries Worth It in NSW? PSC’s Ultimate Guide for 2025.
How Does a Solar Battery Save Money?
We touched on the fact that solar batteries save money by shifting your energy use away from the grid, but we didn’t dive too deep into it. Let’s do it here:
Peak, Shoulder, and Off-peak Rates
For anyone who doesn’t have an energy bill handy, your energy usage is charged differently depending on the time of day. Importing energy from the grid costs different prices at different times. They are:
- Peak Hours: highest rates, typically in the evening between 5 PM and 9 PM (give or take an hour), but it varies from energy retailer to retailer.
- Shoulder Hours: the rates are moderately priced, used on the weekend or at different times in the morning or afternoon depending on your energy retailer.
- Off-peak Hours: lowest rates, typically overnight between 10 PM or so and 7 AM or so.
If you program your solar battery to discharge during peak hours, you will save money. How much money depends on how much electricity costs, how you use it, and what your battery’s specs are (size and discharge power rate).
You’re simply not paying your energy retailer during expensive evening prices. It’s how a solar battery saves you money. Especially if you use more power in the evening.
If you’re interested in learning a bit more about the price of solar batteries, you might want to check out the following article titled, How Much Are Solar Batteries? A Full Breakdown of Prices, Rebates, and Value in 2025.
Ready to go solar? Click here.
What is the Cheaper Home Batteries Program?
The Cheaper Home Batteries Program is a federal government incentive that lowers the upfront cost of installing a home battery. It helps households and small businesses store solar energy, cut evening grid use, and improve blackout protection.
The discount is applied upfront through your installer.
You can expect a simple, capacity-based discount. The program provides about $350 per kilowatt-hour of installed storage on eligible systems in 2025. In 2026, the value drops to about $300 per kWh.
It applies to batteries sized from 5 kWh to 50 kWh.
Eligibility Requirements
- You must be in Australia and install an eligible battery at your home or small business.
- Your battery must be on the Clean Energy Council approved list and be VPP-ready.
- Your system must be installed and commissioned under the program’s start rules.
- Your storage capacity must fall between 5 kWh and 50 kWh.
- You can claim this program once per site. Size your system with the future in mind.
Steps to Claim the Discount
Step 1: Choose a certified installer.
Step 2: Confirm eligibility with your installer and select an approved, VPP-ready battery in the 5–50 kWh range.
Step 3: Proceed with installation. Your installer will handle the program paperwork.
Step 4: Pay your invoice with the program discount already applied as an upfront price reduction.
What It Means for Payback
This program reduces the upfront cost and shortens battery payback. Most homes will see the payback period drop by at least a year. High evening usage, time-of-use tariffs, and good solar production can shorten payback even more under this program.
If you’re interested in learning a bit more about the federal solar battery rebate, also known as the Federal Cheaper Home Batteries Program, you might want to check out the following article titled, What the 2025 Federal Election and the Government Rebate Means for Solar Batteries in Australia.
Click here for solar solutions.
How Does a Virtual Power Plant (VPP) Lower My Energy Bills?
What is a Virtual Power Plant (VPP)?
A Virtual Power Plant (VPP) is a network of solar batteries connected and controlled via cloud-based software. It’s something you have to sign up for.
The software instructs connected batteries to discharge to relieve the grid when it needs extra energy. It’s like having a mini power plant spread out and made up of many solar batteries rather than a huge, central generator fuelled by coal.
To thank you for helping them keep the grid functioning without any blackouts, VPP programs pay you for exporting energy into the grid. It used to be called a feed-in tariff but has been rebranded as a time-of-use tariff.
How a VPP Works with a Solar Battery
In the evening, during peak hours when demand from the grid is high, a VPP will draw small amounts of energy from participating solar batteries.
In exchange for this energy, VPP members receive payments, some of which can be quite lucrative over time.
Not to mention, you’ll help your community avoid a blackout.
If you’re interested in learning a bit more about the VPP portion of the battery rebate, you might want to check out the following article titled, NSW Battery VPP Rebate Explained: What You Need to Know.
Start Saving with solar today.
Is a Solar Battery Worth the Investment for Your Household?
Consider Your Energy Usage:
- A battery is most beneficial for households with high evening or nighttime energy use.
- If you often use appliances during peak hours, a battery can help you avoid high grid costs.
Household Budget and Upfront Costs:
- Batteries have high upfront costs, even with rebates.
- Consider the NSW rebate and potential VPP income to reduce initial expenses.
Local Electricity Rates and Potential Savings:
- Higher grid rates make a battery more cost-effective.
- Households in areas with frequent peak pricing may benefit most.
Additional Benefits:
- Provides backup power during blackouts, which is valuable for essential medical equipment.
- Increases energy independence by relying less on grid electricity.
At PSC Energy, we understand the newness of everything battery-related. After all, you might not even have considered a battery before now. Don’t worry, we’re here to answer your questions and guide you through our Learning Centre.
If you’re interested in learning a bit more about solar and battery rebates in NSW, Australia, you might want to check out the following article titled, Ultimate Guide to Australia’s 2025 Solar Rebate and Battery Rebate: Federal and NSW Rebate for Solar.
FAQ: Batteries
How does a solar battery lower my electricity bills?
A solar battery stores excess solar energy during the day. It powers your home in the evening when grid prices are highest. You avoid buying expensive peak electricity. You use more of your own solar and less from the grid. That is the core saving.
What does a solar battery do during the day and at night?
During sunny hours, your panels often make more energy than you use. The battery stores that extra energy instead of sending it all to the grid. After sunset, the battery discharges to run your lights, appliances, and hot water timers. It also helps on cloudy days when your panels produce less.
How do peak, shoulder, and off-peak rates affect battery savings?
Retailers charge different prices across the day. Peak hours cost the most and usually sit around late afternoon and evening. Shoulder rates cost less and often apply in the morning and weekend blocks. Off-peak rates cost the least and often apply overnight. When your battery discharges during peak hours, you avoid the most expensive imports. That is where most of the bill reduction happens.
Can a solar battery still save me money if I use most of my power during the day?
Yes, but the savings are smaller. If you work from home and use big loads at midday, your panels already offset much of your use. A battery still helps cover the evening peak and blackout protection. The value is strongest when your evening use is high.
What is a Virtual Power Plant (VPP) and how does it lower bills?
A VPP is a network of home batteries linked by software. When the grid needs support, the VPP discharges a small slice from many batteries at once. You get paid for that energy and for being available. These payments add to your savings over time. You also help your community avoid blackouts during stress events.
Will a VPP drain my solar battery when I need it?
VPPs use rules and limits. You set a backup reserve so the battery holds some energy for your home. Most VPPs only use small amounts during events. They target times when prices are high and the grid is tight. Read the terms so you understand discharge limits, event frequency, and payments.
What is the Cheaper Home Batteries Program?
The Cheaper Home Batteries Program is a federal discount that lowers the upfront cost of a home battery. It applies at the point of sale through your installer. In 2025 the program provides about $350 per kilowatt-hour of eligible storage. In 2026 the value drops to about $300 per kilowatt-hour. The program covers batteries sized from 5 kWh to 50 kWh.
How much could I save upfront with the Cheaper Home Batteries Program?
Use simple math. Multiply your eligible battery capacity by the program rate for the year. For example, a 13.5 kWh battery in 2025 gets about 13.5 × $350 = $4,725 off the invoice. A 10 kWh battery in 2026 gets about 10 × $300 = $3,000 off. Your installer applies the discount to the quote and to the final bill.
Am I eligible for the Cheaper Home Batteries Program?
Most households and small businesses in Australia can qualify if they install an eligible battery. Your battery must be on the Clean Energy Council approved list. It must be VPP-ready. The installed capacity must be between 5 kWh and 50 kWh. You can claim the program once per site. Your installer will confirm the details with you.
What steps do I take to claim the Cheaper Home Batteries discount?
Follow four simple steps. Choose a certified installer who participates in the program. Confirm your eligibility and pick a VPP-ready battery between 5 kWh and 50 kWh. Proceed with installation while your installer handles the paperwork. Pay the invoice with the discount already applied upfront.
What size battery do I need to lower my bills?
Match the battery to your evening and overnight use. Look at your bills to see how much energy you use between 4 pm and 10 pm. Size the battery to cover most of that window. Many homes choose 10–14 kWh. Larger families or homes with pool pumps, EV charging, or ducted air at night may choose 15–20 kWh or more.
Do I need solar panels to benefit from a battery?
A battery can work with or without solar, but savings are best with solar. With solar, you charge the battery during the day for free. Without solar, you may charge off-peak and use the energy at peak. That can still help on some tariffs, but the value is smaller than solar-charged storage.
How do batteries help during blackouts?
A battery provides backup power when the grid fails. It can keep your lights on, your Wi-Fi running, and your fridge cold. Many systems back up essential circuits like lighting, kitchen outlets, and internet. Some systems can back up the whole home if the inverter and switchboard are sized for it. Backup does not lower the bill directly, but it protects your lifestyle and safety.
Will a battery eliminate my bill entirely?
Not in most homes. A battery can cut a large share of your imports. You still pay supply charges and any imports outside your discharge window. A well-sized battery plus smart settings can slash your bill. It can also smooth out price spikes and reduce bill shock.
How do time-of-use tariffs change the case for a battery?
Time-of-use tariffs increase the evening price gap. The higher the peak rate, the more a battery helps. If your plan has sharp peak prices and mild off-peak prices, the battery has more room to save. If your plan has flat rates all day, the savings are smaller. Ask your retailer about plans that suit solar and batteries.
How do I estimate my savings before I buy a solar battery?
Check three things. First, find your average evening kWh use from recent bills. Second, note your peak and off-peak tariff rates. Third, match a battery size to cover most of your evening use and set it to discharge during peak hours. Your installer can model your loads against the battery’s capacity and power rating. They can also include the federal discount and any state incentive.
Can I add a battery to my existing solar system?
Yes, in most cases. AC-coupled batteries work well with existing solar setups. Your installer will assess your switchboard and available space. They will confirm compliance and communications. They will also make sure the battery is on the approved list for the federal program.
