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It started with a solar boom, many small home scale solar roofs popping up everywhere. Australia has a free trade agreement with much of the world, including China, and solar panels have literally dropped to 1/50th of the price they were in 1990 ($10/W to $0.2/W today). A shout out to the work that was done to establish dynamic grid pricing too.
Anyway that caused power prices to reliably go negative during the day as the solar boom led to too much energy being produced. So everyone started buying batteries (you can even get live feed in/out pricing as a consumer). In fact the government even today will pay you a $3000 subsidy to go install a battery. This is in a country where people can buy cheap batteries with no tariffs (free trade's amazing, seriously!). So everyone who could started doing it. For those in apartments etc. that couldn't easily install solar and batteries they won too since the entire power grid is now half the price.
Another consequence of all this, aside from the cheap power prices during a datacenter boom and Hormuz blockade is that fossil fuel usage is plummeting. Particularly gas https://ieefa.org/resources/slump-eastern-australia-gas-dema... . No need for a gas peak power plant when the grid is packed with batteries. Which is helpful since one of the main issues with the current blockade is a lack of gas globally.
If you read the article, most of the decline in gas consumption in Australia is from changes in industrial usage. Residential demand is only down by 6% and part of that is likely due to the effective ban on gas in new residential construction which started in 2023 in Victoria. Prior to 2023 residential gas usage was increasing.
It has hit so cheap that here in Victoria that as of 1st October there will be 3 hours of free electricity in the middle of the day. Capped at 24KW a day but that is still impressive. As such, we can load up the washer/dryer and just schedule them for an 11am start.
Australia actually advanced the tech a lot in the 80s with PERC coming from UNSW but as a nation did nothing with it.
One member on the research team transferred the knowledge to China where he got state backing to commercialize it.
Free Trade is amazing when it works. But it doesn't in many cases. Even with those solar panels: China has put many western manufacturers out of business by selling them under cost price with government support. It's cool for the consumer but it's an artificial trick that actually reduces the free market viability.
They did this with a reason. Either to raise prices later or to create a dependency. Even if you don't pay directly you pay for it in other ways like geopolitical power.
Australia produced 42% of it's electricity from domestic coal in 2025.
https://ourworldindata.org/profile/energy/australia#what-sou...
Another effect - although wholesale prices are falling for the energy itself - energy providers increased their daily "power grid use" fees. As a result, having electricity at home is still more expensive compared to before.
I have made this argument several times that capitalism literally solves the issue of solar panels if the market allows arbitrage and true dynamic pricing.
Good to see now a working example that capitalism is an excellent system of rewarding those who solve inefficiencies in markets
If they pay you 3k to install a battery, what’s the cost of the battery overall?
Electricity is not half the price.
free trade's amazing, seriously!
Time was, mercantilist countries would use foreign colonies for resource extraction; and sell the goods manufactured with these resources back to them.
It was great for everyone!
This is exactly what utility propaganda and PUC manipulation in the US has successfully stopped from happening.
From NEM3 in California, to charging a high fixed fee for being on the grid in other areas of the country, utilities have manipulated rules at every step to prevent a future that has cheaper electricity for rate payers. They come up with rather fantastic propaganda about how ratepayers with solar are burdens on the grid, or concentrated in high-income areas, to try to hide the reality of what's possible with highly distributed electricity generation.
And the media in the US have been very willing accomplices in perpetuating this as well.
I have not figured out why its so different between Australia and the US, but it does seem that Australia has a far greater free-market bent when it comes to these things than the US. It's why solar is 4-6x cheaper to install than in the US.
In California consumer electricity is high because of distribution costs stemming form wildfire risks from distribution in rural areas and sprawl into the wildland-urban interface where many people live as urban areas have historically blocked development. Wholesale generation costs are some of the lowest in the country.
These costs of distortion vary very little based on how much you as an individual consume but they are awkwardly bundled into per-unit charges. As a renter in an urban area I certainly don't think I should pay those costs while those with home solar don't! At current prices I really don't think we should be subsidising home solar at all since it is so much more expensive than utility scale solar.
While a small part of that cost comes from tariffs on solar panels, they're so cheap it doesn't make much difference. The bigger part of the cost differential with Australia seems to be much higher permitting and sales costs.
What is even more amazing is how many of Australia's politicians have been in the pocket of coal barons and yet they put up barely any struggle against solar adoption. Compare that to places like California where they've been fighting tooth and nail against green power.
Isn't it because the US has a more entrenched "clean beuatiful coal" class of people?
The program has so far spent $2.5bn, and installed 11GWh. That's just the cost of the subsidy (~30% discount), not the cost of what home owners tipped in.
Utility scale batteries are now at ~$66m/GWh, or about ~$726m equivalent.
It does not make sense for everyone to be doing a bespoke installation inside their own home. It is ridiculously inefficient.
We are a society. We don't build our own roads, water, grid, schools, hospitals. Why have we suddenly decided to DIY our own redundant power sources? (A: failure of governance)
Fair points, but you are glossing over important issues:
1. You are using the current point-in-time cost for batteries as compared to a subsidy spent over years while battery costs were dropping.
2. You do not include transmission upgrades and costs to distribute energy from centralized batteries.
3. You ignore the benefits and efficiencies of having generation and batteries distributed and close to the source of demand. It also increases resilience of the grid.
4. You assume the political will was there for government and taxpayers to bear the full cost burden of development of the batteries.
I agree 100%, this is one of the most inequitable government policies I've ever seen in this country. The numbers are much worse than you make out. The program has spent more than 2.5bn (the projected figure) and we don't know yet how much. The subsidy was closer to 70% for a typical large battery install. The government's own gen cost report would have put grid storage 1.5x ahead on ROI.
Note that figures like $66m/GWh are projected costs based on projects starting today, not coming online today. They may not include 'balance of plant'. For better comparison you would have to look at the financials of recently commissioned storage.
Installing on people’s houses isn’t just about install costs (the numbers for which above I highly doubt). There’s a huge additional benefit, and cost reducing factor, that comes from installing storage where grid connection already exists. Instead of building out battery farms in the desert and piping the power into urban centers over cables like a power plant, you can install capacity and run it essentially p2p. This is a big deal.
I’ll add that we’re not DIYing this. Professionals are manufacturing and installing these at scale. Also, though I’m not sure how it works outside the US, the government doesn’t build the grid. Energy providers and utilities are also companies.
There was an article a few years back about how homeowners in Hawaii were buying solar panels to try to get cheaper power.
Then the local power company realized that as well and started shifting to solar with the net result that it became cheaper to buy the power company supplied electricity than from your own solar.
Decentralization might be dollar-inefficient, but brings resiliency and redundancy to the system. The whole internet infrastructure would be probably cheaper with more centralization. Data backups are also ridiculously innefficient dollar-wise.
Not all inneficiencies are bad. If the cost to build ridiculously redundant systems is low enough, the system overall is more robust to black swan events than any central planner could ever be.
The subsidy has the effect of prompting the wealthiest consumers to spend around 2.25x the amount of subsidy on battery installations while reducing the load on the grid, lowering prices for all grid users.
Investing in more grid power would require additional grid capacity which would raise the price for all grid users, and with cheap renewables that would be an increasing amount on power bills.
Cost is never the only factor though. Being energy independent and self-sufficient feels awesome. Also whole house backup rocks, together with a smart app showing and optimizing your energy usage.
The subsidy was closer to 70%, and in my case I was paid the equivalent of about 10 years of free electricity for a battery with a 10-year warranty. In total somewhere around 5-7 billion AUD was paid out (not yet public) - the wholesale market for comparison is around $16B AUD annually. Personally, I would have preferred it was used to build grid scale storage instead of funneling tax money to the relatively wealthy (myself included). Given the extreme volatility of power prices, a figure such as '47% decline' should be taken with a grain of salt - but power prices are certainly a bit lower than last year.
I've long thought that any country should buy solar panels from any other country that's crazy enough to sell them to you at a subsidized price. It's not like buying oil; once you have the panels, that energy independence belongs to you.
As ever, Volts did a really good episode on this:
https://www.volts.wtf/p/how-to-make-rooftop-solar-power-as
Worth a listen, both to learn about how ridiculous the US situation is, and just how good the "news" of abundant solar is.
I put 7.3kw of panels on our roof for $0 of our money thanks to a $5k rebate and $8k interest free loan. It makes 7.2Mwh of power a calendar year, which would cost $1000 if we had to pay for it.
So for 8 years we pay the loan instead of for the power, then we get -25 years of $1000 a year in our pockets. The price of power is also pre approved to increase a minimum of 5% a year every year here, so the savings will be more than that.
Right now we get a 1:1 credit for anything we put into the grid. If and when that changes I’ll get a battery.
The kicker? We’re in Canada in a tight valley where it snows a ton. If it works here…
Australians, who were falsely promised by Labor at the 2022 election that their household power bills would be $275 cheaper, want reliable and affordable power generation.
If the Albanese government continues down a renewables-only path that excludes gas and zero-emissions nuclear, expect more Tomago smelter Billionm$$$ bailouts in the near future and fewer data centres
> The government has moved to make use of this surplus solar energy, including by offering free power in the early afternoon to homeowners in Queensland, New South Wales, and South Australia, regardless of whether they have solar panels on their roof or not. The goal is to spur more consumers to run appliances or charge electric vehicles during this window.
Taking the term "1st world problems" to new heights!
Use EVs as energy storage. Millions of EVs form an energy reservoir. 20% of solar is curtailed now and q lot more in future, instead charge EVs. Pay the EV owners because they are creating a storage layer with their capital and power prices go negative hundreds of millions of times every year. No need of home batteries.
Australia is now ready for vertical solar, add a few more hours of production in the morning and evening. Panels are dirt cheap anyway, use them as fences, put them on high rise buildings. Change the building to require structural elements to hold the panels and build new homes with vertical + rooftop. The electric code should be updated to allow v2g.
With BESS (home, grid) and EVs (always plugged in, parked 95% of the time), there may be enough storage to start replacing baseload. This will take decades, but can be done. We gotta start somewhere.
The home Battery boom shows most people expect price of electrity to rise. Which directly contradicts Chris Bowens frequent statements that renewables are cheaper. and the price of electrity will get cheaper.
This works best in areas where cloud cover is consistently low, so solar power doesn't vary much from day to day. That's most of Australia. Two days of dark overcast and the load on non-solar sources goes way up. How much battery do you need before there's no demand for peaking plants? In some places, a day. In others, months?
I looked at cloud coverage maps. There are monthly and annual average maps, and raw data from satellites. Building a map of run length of overcast days would be useful.
While direct government subsidy is one way to increase battery adoption to increase power generation efficiency, a market based approach is for electric power companies to use batteries installed on customer premises as a power bank for the entire grid.
If you ever check out gridstatus.io [0] or similar resources, you may have noticed "storage" or "battery" as a part of the fuel mix. These are most often power company owned centralized facilities.
Another approach is for power companies to leverage batteries installed on customer premises. "A critical mass of home batteries scattered across a region and networked together through so-called virtual power plants, or VPPs, he says, marks 'the shift from energy storage as backup to energy storage as an active grid asset.' [1]"
Is the only reason that a behind the meter subsidy is more efficient because it reduces the upfront for an equivalent kWh storage (with the consumer footing the difference)? I would have thought few, larger, batteries at local substations was more efficient otherwise.
We also have a solar boom in Germany, unfortunately our minister is trying to stall the deployment of solar instead of copying what Australia is doing very successfully here... it's really a shame!
It's only natural that countries with an abundance of sunlight will switch over to solar and batteries, especially if the price of the latter comes down.
In the not so distant future, LFP and sodium batteries will become very cheap, no more than a $200 or so for a day's storage of daily electricity usage. That means that in the majority of nations people will essentially have free electricity for their homes and maybe even their cars.
Australia is also 4,000km wide. A time difference of 2 - 3 hours. This adds a few more hours of Solar with long distance transmission.
It may be easy to install battery for house, but I wonder about apartments?
California is also adding a lot of battery storage… but why are electricity prices falling in Australia and not in CA? Are they outpacing us?
This whole thing started because of some power pylons got destroyed and electricity was not restored for about a year right?
This article is nothing but a press release. It presents no evidence for it's claim, or details on what prices in what area at what time have been cut.
Meanwhile any Australian can see contary evidence just by looking at their power bill.
In Europe the battery subsidies could've been used to double the price of electricity and make things worse for everyone paying for it. What a wasted business opportunity.
Opposite story here in the US with very recent news about Trump breaking offshore wind farm agreements and using billions of US taxpayer dollars to pay repercussive fees to those operators. Our decline/regression in terms of clean energy and how easily the current administration's pulled it off and continues to is an ugly fucking mystery ...
that must send socialist shivers of terror down the average american capitalists back... :-P
so in other words, heavily subsidize another technology (introducing cost shifts onto non-adopters, typically poorer people) to try and solve operational problems directly caused by oversubsidizing rooftop solar (another regressive cost-shift and extremely inefficient cost allocation relative to tx-connected solar) by bringing down wholesale prices (already a minority of the utility bill).
Fixed costs, the majority of the utility bill, continue to increase. But hey, LMPs (something residential tarriffs are not as exposed to) are lower!!! LMFAO