Payback is a simple idea with a messy input. You divide what you paid by what you save each year, and the messy part is the saving. It depends on the gap between what you pay for imported power and what you are paid for exported power, on how much solar you have to shift, and on how reliably the battery gets filled and emptied. This page walks through the sum with all the assumptions visible, so you can replace them with your own.
The numbers use the verified rebate schedule: the Cheaper Home Batteries factor is 6.8 for installations from 1 May to 31 December 2026, 5.7 from 1 January 2027 and 5.2 from 1 July 2027, with tiers of 100 per cent for the first 14 kWh. The STC price has been roughly $38 to $40, and we use $38.
Step 1: the net price
Assume a 10 kWh usable battery quoted at $10,000 installed before the STC discount. That price is an assumption, so replace it with your quote.
At the 6.8 factor the battery creates 68 STCs, and at $38 that is $2,584. The net cost is $7,416. If the same battery is installed in early 2027 at 5.7, the discount is 57 STCs, $2,166, and the net cost $7,834. Use the battery STC calculator to do this for your size.
Step 2: the annual saving
The battery’s job is to move solar energy that would have been exported at a low price into the evening, when you would otherwise buy it at a high one. The sum, per day:
- Energy shifted: 8 kWh (from surplus solar into the evening).
- Energy delivered after losses: 8 kWh times 90 per cent round trip efficiency, or 7.2 kWh.
- Import cost avoided: 7.2 kWh at 35 cents, or $2.52.
- Export income lost: 8 kWh at 5 cents, or $0.40.
- Net saving: $2.12 a day, about $774 a year.
That assumes the battery cycles fully every day. It will not in winter, and on cloudy days. If it cycles on 300 days a year, the figure falls to about $636. We use $774 as an upper-middle base case and show a range below.
Step 3: the payback
Net price divided by annual saving: $7,416 divided by $774 is about 9.6 years.
| Case | Import price | Feed-in | Annual saving | Payback on $7,416 net |
|---|---|---|---|---|
| Low value | 28 cents | 8 cents | about $502 | about 14.8 years |
| Base | 35 cents | 5 cents | about $774 | about 9.6 years |
| High value | 45 cents | 3 cents | about $1,095 | about 6.8 years |
The spread is the real finding. The same battery on the same rebate pays back in under seven years for one household and nearly fifteen for another. What decides it is the gap between the import price and the feed-in rate, and whether you have enough solar to fill the battery.
What the rebate does to the payback
Without the rebate, the net cost is $10,000, and the base case payback is about 12.9 years. With it, 9.6 years, so the 6.8 factor takes roughly 3.3 years off. After 1 January 2027, with the 5.7 factor, base payback is about 10.1 years, and with 5.2 from 1 July 2027 it is about 10.4 years if the price does not change. Prices have been drifting down, which would offset some of that, but the program is designed so that the discount follows costs down. See should you wait for prices to fall.
Adding a VPP
If a VPP credit adds a net $230 a year, which is about the later-year value in the examples on our VPP page, the annual benefit rises to about $1,004 and the base payback falls to about 7.4 years. That is a worthwhile improvement but depends on credits that are reported and variable. Treat it as upside, not a given.
Smaller and larger batteries
Size changes the maths, because the installed price does not fall in proportion. Assume a 5 kWh battery at $6,000 installed. The discount at 6.8 is 34 STCs, $1,292, so the net cost is $4,708. It shifts 4 kWh a day: 3.6 kWh delivered at 35 cents is $1.26, less $0.20 of lost export, so $1.06 a day, or about $387 a year. Payback: about 12.2 years. Smaller is not better here, because fixed costs weigh more on a small system.
At 20 kWh, the 14 kWh tier cap bites. A 20 kWh battery gets 119 STCs, $4,522, but only if you can fill it. A household without enough solar to charge 20 kWh a day will see the saving flatten while the cost keeps rising. The sweet spot is usually a battery sized to your evening use and your surplus solar, not the biggest the quote offers. Our guide on which size gets the biggest rebate discusses the tiers.
Why payback is an incomplete answer
Payback ignores things that matter. It ignores backup power during outages, which many buyers value. It ignores the risk that tariffs change, in either direction. It ignores battery degradation and the warranty period, which is commonly around ten years, so a 9.6-year payback leaves little margin. And it ignores what else you could do with the money. If the same $7,400 paid off a loan at 7 per cent, it would return about $520 a year with no risk. Compare the battery to that, not to zero.
On the other side, the maths ignores the rising cost of electricity if prices keep climbing, and it ignores any other incentive you can stack. Read whether a battery is worth it with the rebate for the wider decision.
A quick way to estimate your own payback
If you do not want to run the full sum, use a shortcut. Take your daily evening use in kWh, capped at your battery’s usable size and at the surplus your solar produces. Multiply by 0.9 for losses, then by the gap between your import rate and your feed-in rate. Multiply by 330 days to allow for poor days. For an evening use of 8 kWh and a 30-cent gap, that is 8 x 0.9 x 0.30 x 330, about $713 a year. Divide your net price by that figure.
The shortcut understates a little when you also use some stored energy to avoid peak-rate periods, and overstates when your solar is undersized. It is good enough to rank two quotes or to tell you whether you are in the “under ten years” group or the “over fifteen” group, which is the question most people actually have.
Short answers on this topic: battery worth with rebate.
What to do next
- Pull your bill and note import rate, feed-in rate and evening kWh.
- Run the base case with your quote and these formulas, then the low and high cases.
- Ask the installer for the discount at the installation date, not the quote date.
- Compare sizes in the battery STC calculator.
- Read the battery STC pillar and the Cheaper Home Batteries installer guide. Installers can check today’s rate.