By now, you are likely familiar with the latest buzz.
The government is offering a very generous rebate to help households and businesses install solar batteries. But like most things that sound great, it raises a few questions. Failing to grasp terminology, such as the distinction between ‘nominal’ and ‘usable’ capacity, can result in homeowners having less battery storage than anticipated and may even render their batteries ineligible for the federal rebate.
We’ve helped hundreds of customers through this process already, and the truth is: it’s not complicated, if you’ve got the right partner guiding you through it.
Here’s an explanation of these terms and their significance.
The Home Battery Rebate program applies to new solar battery systems with a usable capacity between 5-50 kWh, whether installed with a new solar system or connected to an existing one. The Rebate is only paid on the USABLE CAPACITY specified by the battery manufacturer.
The rebate is available to homes, businesses and also for off-grid systems.
The Federal Battery Rebate can only be claimed once per eligible property; receiving the best advice is critical. You cannot claim it again for the same property, even if you replace or add to your existing battery system, once you have received the rebate.
To claim the rebate for Off-Grid, you need to be 1km or $30k away from a connection point (transformer). You will need to provide proof by acquiring a quote from a level 2 electrician or the network provider in your area showing the cost to connect.
To maximise your rebate for a solar battery system, select a company that truly understands your energy requirements. Then, opt for a battery that has a useable capacity tailored to those needs and qualifies for the highest possible rebate.
Here’s a more detailed breakdown:
It is crucial to consider the useable battery capacity when selecting your battery, as each battery will have a different rating which is specified by the manufacturer and is aligned with their warranty.
Consulting with a professional solar company is essential when making these decisions to ensure you fully capitalise on the rebate. Keep in mind that you only get one chance to seize this opportunity.
Nominal (Or Total) And Useable Capacity
Nominal or total capacity, measured in kilowatt-hours (kWh), represents the overall amount of energy a battery can store. On the other hand, useable capacity refers to the energy that is actually available for your consumption.
Using the Sigenergy Sigenstor 5S-13 as an example, its datasheet reveals a total capacity of 13.44 kWh, along with a useable capacity of 13 kWh. However, it’s important to note that the disparity between nominal and useable capacities in home battery systems can differ significantly.
Understanding the Distinction for Claiming the Federal Battery Rebate
It’s crucial to grasp the difference when claiming the federal battery rebate. The eligibility criteria state that the nominal (total) capacity ranging from 5 kWh to 100 kWh qualifies, but only the initial 50 kWh of usable capacity will receive a discount.
Why the difference?
Maintaining a small reserve of capacity is crucial for preventing battery damage and extending its lifespan. The great news is that you won’t need to overthink how much the setting have been installed once it’s installed. You will have access to the full usable capacity of the solar battery, and that’s all you can draw from.
Understanding Depth-of-Discharge in Batteries
However, there are instances when the usable capacity isn’t clearly indicated on a datasheet; it may only show a total or nominal figure, or simply state “capacity.” In such situations, it’s essential to seek another term: Depth-of-Discharge (DoD).
Depth-of-discharge (DoD) refers to the percentage of a battery’s total capacity that is usable. For instance, in the case of a 10–kWh battery with a DoD of 90%, this indicates that 9 kWh is available for use. Typically, lithium-ion systems feature a DoD range of 90% to 95%. It’s crucial to look beyond just the datasheet and promotional materials; be sure to carefully review the warranty document as well — we’ll discuss this further shortly.
Don’t Forget To Factor In Backup Reserve
Many are investing in home battery systems for their backup features. The backup reserve function lets you determine how much stored energy is allocated for use during a blackout. However, this will reduce the amount of usable capacity available for everyday consumption and for a VPP. Most battery manufacturers recommend 20% as a reserve.
Using the Sigenstor 5S-13 example:
- Total capacity: 13.44 kWh
- Useable capacity: 13 kWh
- Backup reserve set to 20% (2.6 kWh)
… this means you’ll have 10.4 kWh available in an outage, and if signing up for a VPP. But backup reserve can usually be adjusted in the system’s app — the mySigen app in this case.
Capacity Degradation
Over time, the storage capacity of a solar battery tends to diminish, with some batteries experiencing greater degradation than others. It’s essential to thoroughly examine the warranty document, particularly the performance warranty. This warranty ensures that the battery will maintain a specified level of its nameplate capacity after a designated period or a specified number of charging cycles or energy throughput—whichever occurs first.
A performance warranty guaranteeing at least 70% of the battery’s capacity at the end of a 10-year period is quite standard today. If you choose to install a solar battery that only barely meets your current capacity needs, it may not suffice in a few years. However, this doesn’t imply that you should purchase a battery that is excessively large for your requirements. Talking to a company like Mega Watt Power for the best advice is critical before purchasing your new home battery.
It is essential for a solar retailer to clearly articulate these terms and suggest a solution tailored to your specific situation. They should provide, among other documentation, precise information on anticipated system performance and the factors that may influence it before you finalise your agreement. Likewise, battery manufacturers need to be transparent about these aspects in their marketing materials and datasheets.
However, we do not live in an ideal world.
Virtual Power Plants (VPPs) :
While participation in a Virtual Power Plant (VPP) is not mandatory to receive the rebate, the batteries must be VPP-capable, unless the system is off-grid.
If you choose to connect it to a Virtual Power Plant (VPP), you will receive a contract and nomination form from the VPP provider. You will need to sign the nomination form and the VPP contract, which outlines the terms of VPP participation.
The NSW Government is offering a VPP incentive BESS 2
From 1 July 2025, the incentive amounts you can receive are:
– up to $550 for a 10-kWh battery
– up to $1,500 for a 27-kWh battery.
Eligibility for BESS 2 VPP Incentive: Customers must have a solar battery, with a minimum of 6 years of warranty, and a size between 2 kWh and 28 kWh. The system also needs to be connected to the electricity grid, excluding off-grid setups.
Potential Benefits
Financial Incentives:
VPPs can offer various financial benefits, including payments for sharing stored energy, credits on electricity bills, or even lower electricity rates. These incentives can help offset the cost of your solar and battery system and potentially reduce your overall energy expenses.
Grid Stability:
VPPs play a crucial role in supporting the electricity grid by providing a reliable source of energy, particularly during peak demand periods. This helps prevent blackouts and ensures a more stable and efficient energy supply for everyone.
Environmental Impact:
By participating in a VPP, you’re contributing to the broader adoption of renewable energy and a greener energy future.
Potential Downsides
Battery Wear and Tear:
VPP participation may lead to increased cycling (charging and discharging) of your battery, potentially shortening its lifespan compared to a battery used solely for home backup.
Limited Backup Power:
VPPs often require a portion of your battery capacity to be available for grid support, which could reduce the amount of backup power available during a blackout.
Terms and Conditions:
It’s crucial to carefully review the terms and conditions of any VPP you’re considering, as providers may be able to change rates, payment structures, or access schedules.
Your Energy Needs:
Assess your typical energy consumption patterns and whether a VPP aligns with your household’s usage and backup power requirements.
VPP Provider:
Research different VPP providers and compare their terms, incentives, and track record. At Megawatt Power, we have been keeping detailed records for our customers who have signed a VPP with Amber Electric. We can see from these records that for now they are currently offering the best options, and the overall feed–in–tariff our customers receive is around 33c, way more than the offers available from other companies on the market.
Battery Capacity and Warranty:
Consider the size of your battery and its warranty, as these factors can influence your VPP participation.
In conclusion, joining a VPP can be a valuable opportunity for many households, but it’s essential to weigh the potential benefits against the possible drawbacks and choose a VPP that best suits your individual needs and circumstances.
Why good advice matters:
If the battery capacity exceeds 28 kWh, the customer will not qualify for the BESS 2 NSW VPP incentive. However, they can benefit significantly from installing a larger battery through the Cheaper Home Battery Scheme rebate. Additionally, since there is no cap with Amber, engaging in VPP trading can yield greater financial returns over time. Therefore, it might be wiser to forgo the BESS 2 incentive in favor of a larger rebate through the CHBS and the potential earnings from VPP trading in the long run.
If you are unsure, we are always available for advice.
(02) 6652 9700
