Key points
- Commercial battery storage pays off fastest for businesses with evening or overnight loads, demand charges, or a real need for backup power.
- Small businesses can use the federal battery discount on batteries of 5–100 kWh: 6.8 STCs per usable kWh for installs until 31 December 2026, falling to 5.7 from January 2027.
- The discount tapers: full rate for the first 14 kWh, 60% for 14–28 kWh, 15% for 28–50 kWh, and nothing above 50 kWh. A 20 kWh battery gets about $4,400–$4,800 off.
- In SA, large business peak demand outside the CBD is measured 5pm–9pm, when solar has stopped. That is where batteries earn their keep.
Commercial battery storage pays off when a business can use stored solar or cheap off-peak energy to avoid expensive evening power, cut demand charges, or keep critical equipment running in an outage. For a business that closes at 5pm and pays no demand charge, a battery often takes a decade or more to pay back. For a restaurant, cold store or aged care site on a demand tariff, the numbers can be much better. Here is how to tell which group you are in.
When does commercial battery storage pay off?
Look for these four signals. The more of them apply, the stronger the case.
- You use a lot of power after the sun goes down. Hospitality, aged care, gyms, cold storage, 24-hour sites and businesses with evening shifts.
- Your bill has a demand charge measured in kW or kVA, especially one measured in the late afternoon or evening.
- You export a lot of solar at midday for very little, or your exports are limited by the network.
- Outages cost you money, for example refrigeration, IT, security or medical equipment.
If none of these apply, more solar or simple load shifting usually beats a battery on payback. A battery is one tool in a wider plan, described in our commercial solar guide for Australian businesses.
How much does a business battery cost in 2026?
Installed battery prices vary widely, roughly $700 to $1,300 per usable kWh before any discount in 2026. A compatible hybrid inverter may be extra if your existing solar inverter cannot run a battery. Small businesses can claim the federal Cheaper Home Batteries Program discount on eligible batteries of 5–100 kWh, installed by an accredited installer and VPP-capable.
| Usable capacity | Typical price before discount | Approx. STCs (to 31 Dec 2026) | Approx. discount |
|---|---|---|---|
| 13.5 kWh | $9,500–$17,500 | 91 | $3,400–$3,700 |
| 20 kWh | $14,000–$26,000 | 119 | $4,400–$4,800 |
| 30 kWh | $21,000–$39,000 | 154 | $5,700–$6,200 |
| 50 kWh | $35,000–$65,000 | 174 | $6,500–$7,000 |
| 100 kWh | $70,000–$130,000 | 174 | $6,500–$7,000 |
Discounts assume $37–$40 per STC. Because the discount stops growing at 50 kWh, it makes the biggest difference to batteries under about 30 kWh. Above 100 kWh, commercial batteries are outside the program and are priced project by project. The discount rate also falls to 5.7 STCs per kWh for installs from 1 January 2027, which is worth factoring into your timing. Our post on the Cheaper Home Batteries Program in SA explains the program in more depth.
How do batteries cut demand charges?
A demand charge bills you for your highest rate of power use in a set window, not just the total energy you use. One bad half-hour can set the charge for a month or a whole year. Batteries help by discharging at exactly those moments.
South Australia
SA Power Networks charges large businesses (over 160,000 kWh a year) for two kinds of demand, both in kVA:
- Anytime demand: the highest 30-minute interval in the last 12 months.
- Peak demand: outside the Adelaide CBD, the highest 4-hour daily average between 5pm and 9pm, from November to March. In the CBD it is a 6-hour average between 11am and 5pm on workdays.
Outside the CBD, the peak window starts as solar output drops away. Solar alone barely touches it, but a battery that discharges steadily from 5pm to 9pm can. Medium businesses using 40,000–160,000 kWh a year with demand above 120 kVA are also placed on a demand tariff.
Victoria
Under Powercor’s 2026–27 tariffs, small and medium business demand is the highest half-hour kW between 10am and 6pm on workdays, with higher summer rates. Large businesses pay on a rolling 12-month kVA peak between 7am and 7pm on workdays. Solar helps on sunny days, and a battery covers cloudy afternoons and late-day peaks.
We go through the tariffs in detail, with a worked example, in business electricity demand charges explained.
Tip: A battery for demand management needs enough power (kW) as well as enough energy (kWh). A 4-hour evening window needs roughly 4 kWh of usable storage for every 1 kW of demand you want to remove, plus a margin.
Worked example: an Adelaide restaurant
A suburban restaurant opens 11am to 10pm, seven days a week. It already has 30 kW of solar and exports heavily in the early afternoon.
- Battery: 20 kWh usable at an assumed $1,000 per kWh installed = $20,000, less about $4,400 discount = about $15,600.
- Daily use: charges from surplus solar and supplies about 17 kWh each evening after losses.
- Value: each kWh used instead of exported is worth the gap between the evening rate and the feed-in credit. At an assumed 35c peak rate and 5c feed-in (check your own bill), that is 30c a kWh, or about $1,850 a year.
That is a simple payback of about 8 years on energy savings alone. If the restaurant also pays a peak demand charge that the battery can reduce, or values backup for its cool rooms, the case improves. If it closed at 5pm, the same battery would struggle to pay for itself. For how long a battery is likely to last against that payback, see how long solar batteries last.
Can a business battery provide backup power?
Only if it is designed to. Backup needs a battery and inverter that can operate when the grid is down, plus wiring that separates essential circuits such as refrigeration, IT, lighting and security from everything else. Many commercial batteries are installed purely for bill savings without backup. If backup matters, say so at the start, list your critical loads, and check how long they can run at night when there is no solar.
Should you join a VPP with a business battery?
A virtual power plant (VPP) lets a retailer or aggregator control your battery at times of high demand in exchange for credits. Some small business plans are available, and batteries under the federal program must be VPP-capable even if you never join. In SA, the REPS VPP incentive’s general funding ran out in May 2026, with remaining funding for priority groups for the rest of 2026. Make sure any VPP rules leave enough charge to cover your own demand window. Our guide to virtual power plants in SA and Victoria explains what to check.
How should you size a commercial battery?
- Start with interval data. Twelve months of half-hourly data shows your evening use, your demand peaks and how much solar you export.
- Size to the job. For bill savings, aim to use most of the battery every day. For demand charges, size power and energy to the window. For backup, size to your critical loads.
- Do not oversize for the discount. The federal discount tapers sharply above 14 kWh and stops at 50 kWh.
- Think about tax. A battery is a depreciating asset. A small battery may cost less than the $20,000 instant asset write-off limit after the discount. See commercial solar tax and depreciation and check with your accountant.
For an Adelaide-specific view of business solar and batteries, read commercial solar and batteries for Adelaide businesses.
Frequently asked questions
Can a small business get the federal battery rebate?
Yes. The Cheaper Home Batteries Program is open to homes, small businesses and community organisations. The battery must be 5–100 kWh, on the approved list, VPP-capable and installed by an accredited installer. Until 31 December 2026 it earns 6.8 STCs per usable kWh, tapering above 14 kWh and stopping at 50 kWh.
Is commercial battery storage worth it without demand charges?
Sometimes. Without demand charges, a battery pays mainly by shifting solar into the evening. Businesses with heavy evening or weekend use can still see paybacks under 10 years. Businesses that close at 5pm on weekdays usually get better returns from more solar or shifting loads to the middle of the day.
How big a battery does a business need?
It depends on the job. For evening use, size to the energy you use after solar drops away. For demand charges, size to the kW you want to remove for the length of the demand window. Twelve months of interval data is the best starting point for sizing.
Do commercial batteries work in a blackout?
Only if the battery, inverter and switchboard are designed for backup. Many commercial batteries are installed for bill savings and switch off with the grid. If backup matters, ask for a backup-capable system, decide which circuits are essential and check how long they will run overnight.
Our installers design and install solar battery systems for businesses across Adelaide and Melbourne, using brands such as Tesla, Sungrow, Sigenergy and AlphaESS. Ask us to model a battery using your interval data.
Sources: Clean Energy Regulator – Changes to the Cheaper Home Batteries Program (13 Dec 2025); SA Power Networks – Large business tariff information; SA Power Networks – Small and medium business tariff information; AER – Powercor 2026–27 statement of compliance (7 May 2026). Battery prices, STC values and tariffs change; the worked example uses assumed rates. Featured image: Kecko from Eastern Switzerland / Wikimedia Commons, CC BY 2.0.
