Solar Batteries: Balancing Risks & Opportunities


Australia has embraced solar power, with one in three households and businesses now sporting rooftop panels, according to the Clean Energy Council. This clean energy source is now the country’s fourth largest.

How do solar batteries work?

When the sun shines during the day, solar panels can generate power. That energy supplies the premises first and surplus is usually exported back to the electricity grid. The property owner may even get a solar feed in tariff payment from their energy retailer.

Alternatively, that extra power can be stored onsite to charge a battery. Then, at night, the property owner draws on that for power rather than the grid. 

Getting a bit technical, solar power batteries store their energy in direct current (DC). You use DC cables to connect them to a hybrid solar inverter or the battery might already have an in-built inverter, such as the Tesla Powerwall 3. The latter is easy to connect to the main switchboard as you would an alternating current appliance.

Benefits of solar batteries

Batteries sound like a sensible idea to store the excess power that panels generate. Benefits include:

  • Lower electricity bills.
  • Energy independence – a handy back up if there are blackouts (or brownouts)
  • Easy to maintain and generally hassle free.
  • Not as noisy as generators.
  • Don’t use fossil fuels that cause polluting gas emissions.
  • Enjoy a long lifespan – typically 10 years under warranty, compared to about three-to-five for a generator.
  • The potential to tap into tax credits and government rebates.
  • Improves your real estate value (more attractive for tenants, too, if the battery is installed on an investment property).

Risks of battery storage

There are downsides to connecting a battery to your solar array. Batteries can be lithium, lead-acid, or other technologies that harness chemicals. The most common type is lithium iron phosphate or lithium ferro phosphate. 

The main risks of energy storage systems, aka batteries, are fire hazards and the potential for ‘thermal runaway’. That’s when internal shorts happen inside a battery cell and the battery catches fire.

Where you store your battery can impact the risks. Outdoor units typically require thermal management systems and additional electrical and fire safety equipment.

Steps to improve battery safety

Australia does have strict standards about solar battery specifications and installation.

If you’re thinking of investing in a battery, here are some tips to manage the risks:

  • Buy a high-quality battery and use a well-recommended installer.
  • Have the battery inspected.
  • Ensure it’s kept clean of dirt, the vents free of cobwebs, and the surrounding area free of flammable materials.
  • Be alert if the worst, such as a fire, occurs and understand what you need to do. Fire and Rescue NSW advise to stay away from the battery, leave the building, call triple 0 and tell the operator a home battery is the issue, and wait in a safe place for firefighters to arrive.

Weighing up your investment

There are pros and cons to investing in a battery for your solar panels. Be sure to also check out this authoritative advisory article from researchers about designing the optimum system for your needs. 

The payback period for a solar-and-battery system is about 10 years, according to the Federal Government’s Energy agency. This is three years longer than six years ago.

However, the Australian Energy Market Commission (AEMC), which advises the government on energy policy, believes the switch to solar and batteries is becoming more attractive. Decreasing battery costs, longer warranties, and rising electricity bills are all contributing factors. Even the Sydney Morning Herald published a recent editorial call for governments to subsidise household batteries to go with solar. 

So, whenever you make a new investment, keep us in the loop to make sure you’re protected.


Are you a Property Agent? Get blog post updates.

Subscribe to receive the latest insurance insights directly to your inbox.

More Posts