The South Australian Government has announced a decrease in the subsidy level and cap for its Home Battery Scheme, following a strong surge in the number of new homes signed up to the program. New subsidy levels of $300 per kWh and $400 per kWh and the maximum subsidy of $4,000 will take effect on April 15.
This will be a significant change given that the maximum subsidy level is currently capped at $6,000, while the subsidy is $500 per kWh and $600 per kWh, the latter one being reserved for energy concession holders. “A strong surge in the number of households accessing the subsidy has pushed the number of homes signed up to the scheme past 7000 and led to a reduction in the maximum subsidy from $6000 to $4000 as the costs of the batteries to households start to fall,” the government said in a statement released last week.
These changes to the SA Home Battery Scheme do not come out of the blue. As announced by the state government at the program’s launch, the subsidy levels and cap were expected to reduce over time due to increasing competition in the market and cost reductions of home battery systems. “The scheme is designed so that as the market matures, the subsidies reduce to transition the market to self-sufficiency and the government is confident we have begun to create a self-sustaining market for home storage,” SA Minister for Energy Dan van Holst Pellekaan said last week.
Launched in 2018, the $100 million subsidy program plans to see 40,000 home batteries installed across the state. Accessibility to the scheme was recently improved allowing new home buyers and new builds to excess subsidies. “Approximately 82MWh of additional storage capacity has already been delivered under the scheme, taking the collective storage capacity of home batteries to over 60 per cent of the current capacity of Hornsdale Power Reserve – the biggest battery in the world,” the minister said.
Peer-to-peer lender, RateSetter was named the exclusive administrator of the SA Home Battery Scheme based on a funding deal with the Clean Energy Finance Corporation (CEFC) back in 2018 and tasked to offer $100 million in loans in cases when the upfront costs of the home battery system installations are not met by the SA government subsidies. It has since administered over 4,000 solar battery subsidies.
The fintech company was once again appointed as the delivery partner for the NSW Empowering Homes pilot, a program that could eventually be rolled out statewide to include to up to 300,000 NSW homeowners. This has prompted criticism from other lenders that have accused the CEFC of favoritism of RateSetter amid a lack of transparency around the appointment and selection process of the delivery partner.
Nonetheless, the SA program appears to have translated into a big win for everyone involved. According to Van Holst Pellekaan, participants have cut their electricity bills significantly, sometimes to almost nothing. The scheme has also spurred virtual power plant (VPP) programs in South Australia, providing consumers with additional benefits, and in some cases providing grid stability to the state. Seven VPP programs are now available for SA households to choose from, including AGL, ShineHub, Simply Energy, EnergyAustralia, Stoddart Group, sonnen, and Tesla.