Key points

  • Batteries enable you to store energy to be used later, and can be a useful part of renewable energy systems (for example, solar photovoltaic (PV) or wind).
  • Batteries can save you money, reduce your dependence on the grid, and give you more control over your energy use.
  • Battery systems may be stand-alone or may be connected to the main electricity grid. Batteries are usually either lithium ion, lead-acid, or flow (zinc bromide or vanadium).
  • Stand-alone battery systems may enable you to be independent of the grid, and to store the energy generated by your solar PV system for use at night or during cloudy periods.
  • For batteries to provide back-up power in grid-connected systems, you need to buy additional equipment. You may also need a petrol or diesel generator as a further backup in a stand-alone system.
  • Check the specifications of the battery before you purchase to make sure it suits your household and lifestyle. You will need to consider battery capacity, depth of discharge, efficiency and expected lifecycles.
  • Also consider the financial impact of batteries. Batteries will allow you to use less energy from the grid, but they are still reasonably expensive. This means the payback period can be very long. However, prices are continuing to fall, and government rebates and incentives may be available to offset the initial cost.
  • Batteries should be installed by accredited installers, and maintained to ensure safety and performance.
  • Some manufacturers are developing take-back policies for batteries: when purchasing batteries, ask the supplier if they are involved in a recycling program.

Understanding batteries

Energy storage devices store energy to be used at a later time, when needed.

Batteries, which store energy electrochemically, have become the most commonly used energy storage technology for homes. You can purchase the right size to suit your home, and they are one of the quickest forms of storage to respond to demand, which makes them well suited to home usage. Batteries can store energy produced by solar photovoltaic (PV) systems when the home is not using all of the power generated from the sun.


The benefits of batteries include the potential to save you money, reduce your dependence on the grid, give you more control over your energy use, provide back-up power, and deliver better environmental outcomes.

Batteries can be stand-alone (off the grid) or can be connected to the grid. In a stand-alone or off-grid energy system, the energy stored can be used when demand exceeds the output from onsite energy sources. If connected to the grid, batteries have to be set up to provide back-up power in case of blackouts and extra equipment needs to be purchased to override default protections. Grid-connected batteries can be charged during off-peak times so that owners can pay lower prices for electricity.

More batteries are being installed in Australian homes as the cost of technology falls. But batteries are still comparatively expensive and the payback period may be longer than the warranty period (for example, 10 years) unless they are subsidised (refer to Financial incentives below for more information). The payback period is the time it takes for a battery to pay for itself through reduced energy bills and is the simplest way to calculate whether it will save you money over its warranted lifespan.

The solar inverter, battery inverter–charger and intelligent controller for a home energy system

The solar inverter, battery inverter–charger and intelligent controller for a home energy system

Photo: Simon Duncan, Green Energy Videos

Types of batteries

Lithium ion

The most popular grid-connected battery chemistry in recent years has been lithium ion. This is the same type of battery as in your phone or laptop. There are different types of lithium chemistry; common types are nickel-manganese-cobalt (NMC) or iron phosphate (LiFePO/LFP). LFP batteries are safer but less efficient than NMC batteries. Lithium batteries are popular because they:

  • have a long lifespan (expected to be more than 10 years, and researchers are working to further extend this)
  • can be used to almost their full capacity
  • work in a wide range of climates.

Large boxes housing the batteries, with invertor boxes on the wall nearby, with connections to the solar PV system.

An off-grid system using lithium-ion batteries (from L to R: battery cabinets, inverter/charger, solar inverters)

Photo: © Off-Grid Energy Australia

Lead acid

Lead-acid batteries are like the ones in a conventional car. They are cheaper than lithium ion batteries but bulky and less flexible, with a slow charge cycle and sensitivity to high temperatures. Sometimes these batteries can be coupled with a supercapacitor for a faster charge cycle. This technology is often used in backup power supplies, which cycle batteries only occasionally. It is also still used in stand-alone (off-grid) power systems, although lithium ion batteries are taking over this role as their lifetime performance becomes better understood.

Lead-acid batteries may be wet cell (vented) or sealed (valve-regulated). Wet cell batteries use liquid electrolyte; sealed batteries use either a gel or liquid electrolyte absorbed into fibreglass matt. Wet batteries are typical for renewable energy systems, but sealed batteries are becoming more common because they are safer and easier to maintain.

Electric vehicle batteries

Some electric vehicle makers are looking at making their car charging devices ‘bi-directional’ or ‘vehicle-to-grid’ capable. This means that energy stored in the car’s battery can be used in the home or sent to the grid. This opens the possibility of charging a car from a solar PV system during the day or from the grid overnight when electricity costs are low. The stored energy in the car battery can then be used to power the house. Before considering this option, check the technology is proven and that it will not have hidden costs (for example, electric vehicle batteries that are charged and discharged more often will not last as long).

Other types of batteries

Other types of batteries include flow batteries, which use a pumped electrolyte such as zinc bromide or vanadium ions. The electrolytes are liquid and stored in external tanks. These are currently more expensive than lithium batteries but have better charging capacity and work at high temperatures. They do not work as well at low temperatures and need more maintenance.

Nickel-based batteries also exist. They have very long lives but are not often recommended for home applications because they are more expensive, less efficient, and require more maintenance.

Battery specifications

Batteries have a few key specifications. Choosing the right battery for your needs will mostly depend on how much energy you consume and when you consume it, whether you want backup during a power outage, and the size of your solar PV system (if you have one). Some key specifications that are important to understand are: capacity, depth of discharge, efficiency, life cycle, and electrical connection.


The capacity (or size) of a battery is how much energy it can store, usually measured in kilowatt-hours (kWh). The nominal capacity is the total amount of energy the battery can hold; the usable capacity is how much of that can actually be used, after the depth of discharge is factored in. Some batteries are designed to be modular, so you can increase your storage by adding more units.

Depth of discharge

The ‘depth of discharge’ (DoD) of your battery is the amount of usable energy. It is expressed as a percentage of the total capacity. Lithium batteries often have a DoD of 90–95%, compared with lead-acid batteries that have a DoD of 30–60%. Flow batteries can use their complete capacity (100% DoD).


A battery’s efficiency is how much energy the battery will actually store and put out again. ‘Round trip efficiency’ is the efficiency of the battery including the inverter.

Life cycles

The lifecycles of a battery are the total number of charge–discharge cycles it can perform throughout its life.



Assess your energy needs before investing in a battery system. The Solar Choice solar and battery storage sizing and payback calculator can help you to assess your needs.

Characteristics of major battery storage technologies

Battery type

Round trip efficiency

Depth of discharge

Life cycles





Lead acid








Source: IRENA 2017

Electrical connection

Solar panels produce direct current (DC) electricity but appliances within the home require alternating current (AC) electricity. A battery system includes inverters, which turn electricity from DC to AC mains power. Any renewable system also includes switches, circuit breakers and fuses to ensure safety and allow equipment to be isolated for maintenance. Stand-alone systems usually comprise the energy source, a battery bank, inverter, battery charger, and often a fuel generator for back-up power. Grid-connected systems usually comprise the energy source, inverter and smart meter. Each system also includes a charge controller that can be part of the inverter or other equipment.

The electrical connection between a solar array, battery and the house or grid can be either AC or DC. There are 4 main options. The first 2 have traditionally been the most common, but the latter 2 are becoming increasingly common in grid-connected applications:

  • DC coupled systems – these have been historically popular in off-grid installations, including micro systems such as caravans, boats or huts. A charge controller sits between the solar array and the battery, reducing conversion losses that occur when an inverter converts DC to AC for use within the home. However, DC-coupled systems can be more difficult to retrofit where solar is already installed (that is, where there is already a solar PV inverter).
  • AC coupled systems – here the battery and solar array each have their own inverters. Battery charging is slightly less efficient than DC coupled systems because the electricity needs to be converted 3 times (from DC to AC, AC to DC, DC to AC) before use in the home. They can be simpler to install, particularly where there is already a solar system in place with its own inverter.
  • AC battery systems – these consist of battery cells, a battery management system and an inverter and charger all in one unit. The system works in a similar way to AC coupling, so conversion efficiency is still reduced.
  • Hybrid inverter systems – these convert AC to DC for both the battery and solar array in the 1 device. They work in a similar way to the DC-coupled option and are becoming more popular because they can be easily retrofitted to existing solar arrays.

Diagram showing the interconnections between grid and batteries.

A threshold choice with your battery is whether it is DC- or AC-coupled.

Source: Dani Alexander

Choosing and using batteries

Energy storage can offer both financial and nonfinancial benefits. For example:

  • saving money by reducing the amount of energy that needs to be purchased at times when energy is not being generated onsite
  • less dependence on grid energy and more control over energy use
  • providing back-up power when grid blackouts occur (if set up to do so)
  • better environmental outcomes for the overall energy system (for example, by reducing the amount of energy purchased from the grid that may come from non-renewable sources).

Look for a system that meets your specific needs.

Financial considerations

There are several financial aspects to battery storage that should be assessed before you purchase a battery system.

Avoiding electricity costs

The most basic financial benefit for batteries comes from ‘energy arbitrage’.

Solar arbitrage means charging the battery at times of excess solar generation for use in the evening or cloudy days, when more energy is being used but not generated. This avoids having to draw energy from the grid.

Tariff arbitrage works with a time-of-use tariff. The battery system can draw power from the grid during off-peak times to be used at times of higher electricity charges, offsetting the cost difference.


Many state and territory governments offer incentives, such as subsidies or interest-free loans, to encourage households to invest in renewable energy, including batteries. This can make the payback period for a battery system much shorter. Check whether your government, council or energy provider is offering incentives for batteries in your area, or search for ‘battery’ at

Small-scale technology certificates (STCs) are also available from the Australian Government to assist with the purchase cost of batteries. Find out more about STCs on the Clean Energy Regulator website.

Demand response

Electricity retailers and network businesses might offer you a subsidised price for your battery in exchange for them being able to control the battery at times of high demand or stress on the electricity grid (refer to Connected home for more information). This may include:

  • delaying charging of your battery until the early afternoon, to alleviate local voltage issues
  • discharging your battery to help power the grid at times of peak electricity demand (for example, hot summer days)
  • providing other network support services (for example, paying you to use your battery to provide voltage or frequency support to the network business).

Programs that coordinate such arrangements across a large number of homes are often called Virtual Power Plants (VPPs) because they mimic some of the functionality of full-size power plants. In fact, they can also do things that traditional power plants cannot do, such as correcting voltage variations in the local grid. The services provided by VPPs may make your local electricity grid more reliable. Check whether providing these services will affect the performance or lifetime of your battery or the financial benefits to you.

Battery installation

Batteries are dangerous and must be treated cautiously and installed correctly. Batteries should be properly contained, ideally close to the switchboard. Installation and maintenance should be carried out by an accredited installer. Visit the Clean Energy Council to find an accredited installer.

The main dangers are listed below:

  • Electric shock. A battery bank uses many battery cells to reach a high voltage for the inverter to operate efficiently – this voltage is hazardous, and the battery can also deliver a very high electric current. Insulate and cover live parts including battery terminals and electrical connections. Make sure shutdown switches are accessible.
  • Explosion or fire. Lead-acid batteries generate flammable gases as part of regular charging and especially if they are over-charged. Lithium batteries can release flammable gases if there is a fault. Fire or explosions can also happen if components fail or temperatures are too high. Make sure there is enough space around the battery so it does not overheat. Avoid direct sunlight to prevent the battery from overheating.
  • Arc flash. Short circuits or faults can cause an arc flash, which can have temperatures above 12000°C. This can happen, for example, when the terminals of battery cells are exposed and touched by metal objects. Use enclosed containers with warning signage.
  • Exposure to hazardous chemicals. Degraded or ruptured batteries can leak hazardous chemicals or toxic fumes. Take precautions for the chemicals in the battery and have safety information nearby.

The battery room or container should be suitably designed to reduce or contain these hazards. Limit access to the battery room or container to people trained in maintenance and shut-down procedures. Never open it to children. Safety signs are required in accordance with Australian Standards.

Installing lithium batteries

Lithium batteries are usually a smaller sized battery and can be installed on the wall or the floor. Installation must comply with current Australian Standards, including AS/NZS 5139: Electrical installations – Safety of battery systems for use with power conversion equipment (this standard has additional requirements not always needed overseas), and AS/NZS 3000 Wiring rules. It is recommended that your battery is installed by an accredited installer.

When there is a ‘habitable room’ on the other side of the wall the battery system must be mounted on a non-combustible surface and have a non-combustible surface above it. If the wall is not brick, concrete or tiled wall, you will need to line it with extra cement sheeting or another non-combustible material.

Do not mount the battery within 60cm of an exit, window, ventilation opening to a room, or appliance (for example, a hot water or air-conditioning unit). The battery must sit at least 90cm below any of these things. Do not install your battery in a ceiling or roof space, wall cavity, under stairs or walkways, or in habitable rooms.

Large boxes housing the batteries, with invertor boxes on the wall nearby, with connections to the solar PV system.

From L to R: Two solar inverters and a 13.5kWh lithium-ion battery system installed on a grid-connected home

Photo: © Off-Grid Energy Australia

Installing lead-acid batteries

Lead-acid batteries emit a corrosive and explosive mix of hydrogen and oxygen gases during the final stages of charging, which can ignite if exposed to a flame or spark. They must be installed in a well-ventilated enclosure, preferably away from the house.

Australian Standards relating to lead-acid batteries for stationary purposes include:

  • AS 2676-1992 Guide to the installation, maintenance, testing and replacement of secondary batteries in buildings
  • AS 3011-1992 Electrical installations — secondary batteries installed in buildings
  • AS 4029-1994 Stationary batteries — lead-acid and
  • AS 4086-1993 Secondary batteries for use with stand-alone power systems.

Because the gases rise, ventilation design must allow air to enter the enclosure at the base of the batteries and exit at the highest point. Ventilation can be provided naturally by allowing the gas to rise and escape safely or by installing fans and electrical vents. How much ventilation is needed increases with the size of the battery bank and the rate of charge. Your installer should design appropriate battery ventilation in accordance with standards.

Mount lead-acid batteries on stands to keep them clear of the ground; otherwise, they need to be thermally insulated from the ground temperature. Do not install batteries directly onto concrete, which cools to ground temperature. The resultant electrolyte stratification is detrimental to a battery’s long-term life and performance. Low electrolyte temperatures also reduce the capacity of a battery. Install batteries out of direct sunlight and away from excessive heat. High temperatures can cause electrodes to buckle or erode more rapidly than normal.

Battery banks for stand-alone systems can be large and heavy, often requiring 1 to 5m2 of floor space and weighing hundreds of kilograms. Batteries can be as high as 70cm. If installed in a box, it must be one with a removable lid or at least 50cm clearance above the batteries to allow for a hygrometer to check the charge level. The installation must include a switch or quick-disconnect fuse near the batteries so the bank can be electrically isolated from the rest of the system.

Battery charger

Batteries require a battery charger. The battery charger can be a separate unit or, more commonly, incorporated with an inverter as a combined inverter–charger. Connecting generators like solar panels directly to a battery without an appropriate charge controller is dangerous and risks permanently damaging the battery.

Any battery charging source requires a regulator–controller. These can be automatic or manual. Automatic controls start a generator when the batteries reach a low charge level and, with more advanced inverters, when the load is greater than the maximum power output of the inverter. With manual controls, the state of battery charge must be monitored.

If a stand-alone power system is installed with a separate battery charger, the battery charger should be treated with the same care as an inverter. The charger must be installed close to the batteries and can be floor or shelf mounted. The input power to the charger must be a generator-only power point. In grid-connected systems with battery back-up, the charger is usually mains powered.

Battery maintenance

The way you use and store your battery can affect its ability to operate efficiently, and the length of its life. Battery makers supply information on how long their products last and installers should design and install battery banks to comply with standards. You should ask your installer to provide you with this information along with the user manual. Your installer should also inform you of the maintenance schedule of your battery. Your installer and user manual should provide the information you require to get the best out of your system.

Your battery should come with a logbook so that critical system metrics can be recorded every time your battery is inspected. These metrics can help to diagnose issues in a timely manner, and may be important for your warranty. Many installers will offer free inspections for a period after installation, so it is worth speaking to your installer about what services are included in your installation fee.

It is important to monitor the operating behaviours and performance of your battery. There may be a number of ways you can do this, depending on your system. Some systems have a built-in display or a remote in-home display that indicates operating performance. Some systems can connect to the internet and allow you to access an online dashboard. Check your system’s options with your installer.

Many batteries will specify an ideal average and maximum depth of discharge and a maximum charging voltage for maximising the battery’s life. These will be specific to the battery and your installer should design your system for the best results. Know these specifications so that you can monitor if your system is behaving appropriately and contact your installer if anything appears wrong.

Batteries have an ideal temperature range in which they can operate efficiently and most have a slightly narrower ideal temperature range for charging. These ranges can usually be found on the nameplate, along with other system specifications. For most systems, the ideal temperature for all operations is room temperature. Your battery should be installed in a location that minimises extremes of temperature.

Do not create short circuits (that is, electrically conductive pathways) across the battery terminals. Under Australian Standards the terminals must be covered to prevent accidental shorting. Tools, such as spanners, used on the battery terminals should be single ended and have fully insulated handles.

Invertor and battery boxes are attached to an external wall of the house, underneath an wide roof overhang.

Your battery should be installed in a location that minimises extremes of temperature.

Photo: Department of Industry, Science, Energy and Resources

Lithium battery care and maintenance

One of the benefits of lithium batteries is that they generally require little maintenance. Your installer can indicate an appropriate maintenance schedule and maintenance should be handled by a qualified person.

You should keep your battery and its enclosure clean and free from debris. Do not use volatile solvents to clean on and around your battery. A damp cloth with a small amount of soap should be sufficient.

Lead acid battery care and maintenance

Keep battery terminals clean and tight, ensuring the electrolyte is kept above minimum levels. Only use distilled water when topping up electrolyte levels. Neutralise any electrolyte spilt or splashed on the top of the batteries (for example, with sodium bicarbonate), and wash away with water at frequent intervals.

Lead-acid batteries hold a liquid electrolyte with sulfuric acid which can cause serious burns. Always wear protective clothing and eye protection when near the batteries. Acid spilt on the floor or equipment must be diluted with water and neutralised with sodium bicarbonate. Keep all personal protective equipment and other safety materials easily accessible at all times.

Batteries have specific charge regimes and may require periodic equalisation charging. The system designer will explain this process. In some batteries the equalisation charge is controlled automatically by the system, and in others, the owner is required to connect a generator and battery charger at regular intervals (about once a month).

Specific gravity readings are the most accurate method for determining the state of charge of cells in a battery bank. A safe method for performing this will be explained by the system designer.

Safe disposal and recycling

Batteries contain materials such as lead and acid that are harmful to the environment. Do not send them to landfill; dispose of old batteries at a battery recycling station or other suitable site.

In particular, lithium batteries contain hazardous materials such as heavy metals and they present a serious fire risk. They need to be safely managed throughout their lifecycle including decommissioning, handling, storage, transport and processing. Safe management is particularly important at end-of-life and recycling. If batteries are disposed in landfills, they are a risk for creating dangerous landfill fires. Lithium batteries also represent a significant opportunity to recover valuable resources, including cobalt, nickel, lithium and other scrap metals that may be used to manufacture new batteries or other products.

According to the Australian Battery Recycling Initiative, there are 8 lithium batteries recyclers in Australia that collect, sort, and typically, export lithium batteries for processing. A list of these companies and their locations is available online at Battery Recycling. Some companies undertake initial processing of lithium batteries onshore to recover a valuable mixed metal dust, as well as plastic, and other scrap metals. The valuable metal dust is exported overseas for downstream processing to produce materials suitable for battery manufacturing.

Increasing the collection of batteries at the end of their life is the priority of a new industry-led initiative working towards the establishment of a battery stewardship scheme or battery recycling. The major focus of this initiative is on batteries under 5kg in weight from applications such as consumer electronics. Metals inside batteries can be valuable and many recyclers will pay for old batteries. Visit Planet Ark’s Recycling Near You to find recyclers in your area. Some manufacturers are also developing take-back policies for batteries: when purchasing batteries, ask the supplier if they are involved in a recycling program.

References and additional reading

Learn more

  • Refer to the Energy section for tips on reducing electricity demand, helping you make the most of your battery storage
  • Read Photovoltaic systems for more about integrating PV systems with battery storage
  • Explore The connected home for more on metering and energy management 


Principal author: Dani Alexander 2020

Contributing authors: Nick Florin, Elsa Dominish and Geoff James, 2020

Previous authors: Geoff Stapleton and Geoff Milne, Chris Riedy, Lance Turner and Craig Memery