Every second email I get asks the same question: “Should I add a battery?” It’s a fair question. Battery prices have dropped, electricity prices have climbed, and feed-in tariffs have cratered. The gap between what you get paid for exporting solar and what you pay to import grid power has never been wider. So let’s run the numbers honestly.

What batteries actually cost in 2026

Here’s what you’re looking at for installed prices in Australia right now:

Tesla Powerwall 3 (13.5 kWh): $12,500 - $14,000 installed. Still the most popular option with its built-in inverter.

BYD HVS/HVM (10-16 kWh): $9,000 - $13,000 installed. Needs a compatible hybrid inverter, which adds cost if you don’t already have one.

Sungrow SBR (9.6 - 25.6 kWh): $8,500 - $18,000 installed. Competitive pricing, pairs naturally with Sungrow hybrid inverters.

Alpha ESS SMILE5 (10.1 kWh): $9,000 - $11,000 installed.

These prices include installation but not state rebates. Victoria’s Solar Homes program still offers interest-free loans. NSW and Queensland? You’re on your own.

The payback calculation

Let’s work through a realistic scenario. Average Australian household, 25 kWh daily consumption, existing 10kW solar system, currently exporting about 15 kWh per day that could be stored instead.

Cost of battery: $12,000 (mid-range 13 kWh system, installed)

Daily savings calculation:

• 12 kWh shifted from grid import to battery (you won’t capture all exports — losses and timing matter)
• Grid import price: 35c/kWh average
• Feed-in tariff you’re giving up: 5c/kWh
• Net saving per kWh stored: 30c
• Daily saving: $3.60
• Annual saving: $1,314

Simple payback: 9.1 years.

That’s the honest number for most people. Not the 5-6 years some installers quote (they’re usually inflating usage assumptions or ignoring the feed-in tariff you forfeit).

When the payback is better

Some situations genuinely improve the maths:

Time-of-use tariffs with high peak rates. If you’re on a plan where peak power hits 50-60c/kWh (common in NSW and SA), and your battery discharges during those peaks, the value per kWh stored jumps to 45-55c. That can pull payback down to 6-7 years.

Virtual Power Plant participation. Programs like AGL’s VPP, Tesla Energy Plan, or Amber Electric’s battery optimisation can earn you $300-800 per year in additional revenue. That knocks 1-2 years off payback.

Three-phase homes with high evening loads. If you’re running ducted air conditioning, a pool pump, and an EV charger in the evenings, a battery directly offsets expensive consumption.

Frequent blackout areas. A battery with backup capability has value beyond pure economics. Peace of mind is worth something — just don’t pretend it’s a financial return.

When it doesn’t stack up

Small solar systems (under 6.6 kW). You’re probably not exporting enough excess solar to fill a battery meaningfully. Fix the solar first.

Already low electricity bills. If your bill is under $200/quarter, you don’t have enough consumption to justify the battery investment.

Homes with gas heating and cooking. If a big chunk of your energy is gas (which a battery can’t offset), the savings pool is smaller. Consider electrification first — heat pump hot water, induction cooktop — then add the battery.

Rental properties. Obviously. Though I’ve seen a few landlords install them for good tenants. Rare, but it happens.

The AI angle that’s actually useful

One thing that’s changed the battery equation is smart energy management. Several solar companies and energy retailers now use AI-driven systems to optimise when your battery charges and discharges based on wholesale electricity prices, weather forecasts, and your usage patterns.

Amber Electric is the best-known example — their SmartShift feature manages your battery to buy cheap grid power overnight and discharge during price spikes. Customers report earning significantly more than simple time-shifting alone.

Behind the scenes, specialist firms like AI consultants in Melbourne are helping energy businesses build these predictive models — forecasting demand, optimising dispatch, and improving customer recommendations. It’s not the flashy part of the battery story, but it quietly improves the economics.

Battery degradation is real

Every battery degrades over time. Most manufacturers warranty 70-80% of original capacity after 10 years. In practice, you’ll lose about 2-3% capacity per year. That means your year-ten savings are lower than your year-one savings. Most payback calculations ignore this — factor it in and add 6-12 months to your estimate.

Don’t buy a battery without at least a 10-year warranty. You need the full decade to get your money back.

My honest take

Is a home battery worth it in 2026? For most households, it’s approaching break-even but isn’t a slam dunk financially. If your payback period is under 8 years and you plan to stay in the home, go for it. If it’s over 10 years, wait — prices are still dropping and the economics will only improve.

The strongest case for a battery right now isn’t pure savings. It’s the combination of savings, backup power, VPP income, and reduced grid reliance. Stack those together and the proposition gets compelling.

But run your own numbers with your actual usage data and your actual tariff. Don’t trust the calculator on any installer’s website — they all skew optimistic. Pull your last four quarterly bills, check your solar monitoring for export data, and do the maths yourself.