Household battery scheme to form part of Labor’s pre-election plan for low- and middle-income earners

Labor and the Coalition are on a collision course over how best to accelerate household access to batteries, heat pumps and other electrical appliances as the government sharpens cost-of-living supports aimed at winning Anthony Albanese a second term.

The ABC understands the government is giving serious consideration to a bold pre-election plan that would boost the affordability of green energy technology for low- and middle-income households.

This could include a taxpayer-backed higher education loan-style scheme to reduce up-front capital costs that limit access to batteries for price-constrained consumers.

Advocates say installing more batteries across millions of homes would complement Australia’s world-beating rooftop solar adoption rates, which threaten to overwhelm the grid with unusable power.

It would also help make the energy transition away from fossil fuels more equitable and speed up emissions reductions from power generation.

Sources who asked not to be named, so they could speak openly about the government’s considerations, said work on the idea had been underway all year at lower levels of the ministry and bureaucracy.

However, with an election due by mid-May, the issue has now been elevated to the prime minister’s office, which is understood to be “devoting more effort” to the issue.

They cautioned that Labor had not made any hard decisions on the scale or cost of its plans.

Expectations are also growing that the Coalition is developing its own comparable household electrification incentive scheme, with one source telling the ABC they will be taking a solar and battery policy to the election.

Green energy initiative

Spurring expanded access to battery storage is seen by experts as a way to manage and encourage rapid take-up of rooftop solar.

Batteries allow homes to capture solar energy that would otherwise flow into the grid at times when supply tends to outstrip demand.

Consumers can use that stored energy to run heaters and other appliances during early evenings, helping ease pressure on the national electricity grid when demand is greatest and renewables supply lessens.

While batteries and other electrical appliances such as water heaters are steadily falling in cost, they still require households to stump up several thousand dollars up-front.

Consumers subsequently make their money back via lower energy bills or income from dispatching spare energy from their batteries into the grid at peak times when prices are greater.

Climate Change and Energy Minister Chris Bowen on Tuesday launched a “community-led electrification trial” for 500 homes near Wollongong, backed by $5.4 million in Australian Renewable Energy Agency funding.

Mr Bowen said the pilot covering the Thirroul-based postcode of 2515 was designed to generate “meaningful data” for the government on how solar panels and batteries affected the grid.

State and territory energy ministers agreed earlier this year to put more consumers in charge of the energy they generated on their roofs, as well as batteries “that they’ll have available in their driveway,” Mr Bowen said at the launch.

Nationals Leader David Littleproud signalled early this year that he was looking to divert tens of billions of dollars earmarked by Labor for transmission line investments into a supercharged household solar and battery scheme.

Since then, the Coalition, led by Mr Littleproud and Opposition Leader Peter Dutton, have embraced nuclear power, while keeping the door open to greater household access to rooftop renewables and storage.

Mr Littleproud told The Australian Financial Review in February that he was “eager to calibrate the money that is spent to support households and businesses to look at the opportunities of putting renewables, and particularly solar, on an environment you can’t destroy — on rooftops”.

Renewables ‘cheaper way to run a household’

Rewiring Australia founder Saul Griffith, who helped Mr Bowen launch the Thirroul pilot on Tuesday, said the scheme would show how “electrification is a cheaper way to run a household than paying cash every week for fossil fuels”.

By contrast, “we buy cheap machines today with a subscription to petrol and gas that’s really expensive. When you buy solar, it’s like buying 20 years of really, really cheap electricity up-front”.

The announcement came as shadow energy spokesperson Ted O’Brien promised the Coalition would elevate the role of gas by expanding an Albanese government taxpayer-funded green energy support scheme the Coalition once condemned as a “blank cheque for renewables”.

Mr O’Brien told a pipeline industry conference in Adelaide on Tuesday that including gas in Labor’s capacity investment scheme — which Mr Bowen launched alongside the states last year to underwrite 32 gigawatts of wind, solar and storage — would elevate the energy source.

“We will determine the amount and timing of capacity to be called for under each category, as well as the structure of the contracts which will be awarded to successful bidders.

“These contracts will include bidding obligations to ensure that the reduced commercial risk of participating in the Capacity Investment Scheme is passed on to consumers in the form of lower electricity prices.

“And there will also be availability obligations for gas generators which, if not met, will attract penalties.”