Community batteries, community benefits and the clean energy transition

As Australia transitions toward a fully renewable energy future, community batteries are emerging as a key solution to manage and store excess energy.  

But did you know community batteries have the potential to reduce electricity bills, strengthen local supply and provide wider benefits for the community? 

How do community batteries work? 

Community batteries operate like a collective energy bank for households and businesses. 

The batteries store excess energy from rooftop solar, which can then be drawn on from the surrounding community. Storage of surplus solar is critical as we transition to renewable energy because the sun doesn’t always shine and the wind doesn’t always blow. 

In most cases, community-scale batteries (community batteries) are not owned by the community. Instead, they serve as a technology for electricity retailers to provide stored solar energy to surrounding homes and businesses, so it doesn’t go to waste.  

By 2050, Australia’s National Energy Market (NEM) will need to grow to 56 gigawatts (GW) of power capacity and 660 gigawatt-hours (GWh) of energy storage, according to the Australian Energy Market Operator’s (AEMO) 2024 Integrated System Plan (ISP). 

In simple terms: 

• 56 GW refers to the total amount of electricity the country can generate at any given time. 

• 660 GWh refers to the amount of electricity that can be stored for use when needed. 

The ISP also outlines that different forms of storage are required to ‘firm both consumer-owned and utility-scale renewables at different times of the day and year.’ 

Community batteries will help by storing excess solar to be used during peak demand on the grid or blackouts. They can also enable more rooftop solar use overall and avoid wastage.  

Financial benefits to consumers 

According to the Clean Energy Council’s (CEC) Rooftop Solar and Storage Report, 12.4% of Australia’s electricity supply came from rooftop solar in 2024. 

While the pace of household batteries to store rooftop solar has increased, there is still excess solar going to waste and not being properly managed. 

Renew Economy wrote in 2024, that only 8.5% of households with rooftop solar also have battery storage. This results in a surplus of solar pumped into the grid during the day at times of lowest demand. Capturing and storing this excess energy, for use during peak times, can help keep the grid stable. Community batteries aim to do this.  

The batteries can range in size from 50kW up to 5MW. They can be installed near parks, retirement villages, shopping centres and sporting facilities to facilitate the most efficient use of rooftop solar through deployment of stored energy to consumers during periods of peak demand. 

Precise location and capacity of the batteries can be optimised to deliver financial benefits to power-generating households, while also driving down energy prices and improving the stability of power supply. 

Community batteries help manage stability and flow of electricity in the grid and can reduce congestion as grid and transmission infrastructure are upgraded and redesigned for a world powered by renewables. The support builds resilience in phone, internet and rail networks, and reduces the likelihood of electricity outages – especially for regional and bush communities. These capabilities can be vital during an emergency. 

ARENA and community batteries 

In October 2022, $200 million was allocated in the Federal Budget to the Community Batteries for Household Solar program to deploy 400 community batteries across Australia. 

ARENA was tasked with allocating $171 million of funding to the delivery of at least 342 batteries from this. 

The first funding round of allocated $124.7 million to support the deployment of 318 batteries.  

The second funding round launched in March this year and made a further $46.3 million available. Expressions of interest are currently being assessed. 

Want to know more 

Here is more information about the projects ARENA funded in Round 1.  

For an explainer of what community batteries are, and how they differ from other batteries used in utilities or for rooftop solar, watch the video below.