Where the value actually comes from now
The mechanism is worth understanding in structural terms, because it explains every sizing decision that follows.
Under the current net billing tariff, energy you EXPORT to the grid earns meaningfully less than energy you IMPORT costs you. That asymmetry did not exist in the same way under the earlier arrangement, where exporting was close to as good as using your own generation directly. The consequence is that the goal changed: it used to be to generate a lot, and now it is to USE what you generate.
A battery is the tool for that, because solar generates in the middle of the day and households mostly consume in the morning and evening. Storing midday surplus and releasing it in the evening converts energy that would have been exported cheaply into energy you did not have to buy expensively. That conversion is the economic job of the battery, and it is called SELF-CONSUMPTION.
Whether the resulting numbers justify the purchase is a separate question with real figures attached, and we keep those on our NEM 3 economics guide rather than repeating them here — one page carrying the numbers is how they stay current.
The conflict nobody mentions
Here is the thing that surprises people after installation, and it is worth knowing before you size anything.
A battery bought for SAVINGS wants to cycle: fill from solar during the day, empty into your evening usage, repeat tomorrow. Capacity sitting full is capacity doing nothing. A battery bought for BACKUP wants the opposite: keep a reserve so that when the power fails there is something in it. Those are directly opposed operating strategies, and every system with a backup function makes you choose between them by setting a reserve level.
Most people accept whatever default the installer sets and never revisit it. That default is a real economic decision. A high reserve on a property that loses power twice a decade means paying for capacity that earns nothing almost every day. A low reserve in the mountains during fire season means the battery may be nearly empty when a planned de-energisation starts.
The good answer is usually SEASONAL — a higher reserve during fire season and storm months, lower the rest of the year. Not every system makes that easy to change, which is worth asking about before you buy rather than discovering afterwards.
Why bigger is not proportionally better
Battery sizing has a diminishing-returns shape that catches people out, because capacity is sold by the unit and value is not delivered by the unit.
Value comes from capacity you CYCLE. A battery large enough to absorb a typical day's surplus generation and cover a typical evening's usage captures most of the available economic benefit. Capacity beyond that point sits unused on most days — there is not enough surplus to fill it, and not enough evening consumption to empty it.
That extra capacity is not worthless. It is BACKUP DURATION, which is a perfectly good thing to buy, particularly up the hill. The point is only that it should be a conscious purchase of resilience rather than an assumption that a battery twice the size saves twice as much. It does not.
Size against the house you are going to have
This is the most expensive sizing error and it is entirely avoidable.
If you are electrifying — a heat pump, a heat-pump water heater, an induction range, an EV charger — your consumption is going to change substantially, in both total and daily SHAPE. A heat pump adds evening and overnight load. A charger adds a large, flexible block. A water heater adds a schedulable one. A battery sized against today's bills and then asked to serve that house is undersized within a couple of years.
It is also the strongest argument for doing solar and storage AFTER the major electrification rather than before, unless something else forces the order. Real consumption data from the house you actually end up with beats a projection of the house you plan to have. Where a roof replacement or a panel rebuild pulls solar earlier, size against the projected profile rather than the current one and say so explicitly in the design.
Flexible loads beat storage
A principle that saves real money and gets overlooked because it does not involve buying anything.
Storing energy costs some of it — a battery returns less than it took in. So using generation DIRECTLY is always better than storing it first. Which means any load you can move to when the sun is shining, or to your cheapest window, is worth more than the same energy routed through the battery.
- AN EV is the best example — you rarely care when it charges, only that it is ready. Charging from surplus solar directly, or in the cheapest window, often beats cycling that energy through the battery
- A HEAT-PUMP WATER HEATER is a thermal battery in disguise: heat water when energy is cheap or plentiful, use it later
- DISHWASHERS AND LAUNDRY are trivially schedulable and add up
- PRE-COOLING OR PRE-HEATING with a heat pump shifts comfort load out of expensive windows
Sometimes the right answer to a sizing conversation is a smaller battery and better scheduling. That is a cheaper system and a better one, and it is worth asking whether it applies to you before defaulting to more capacity.
A note on how we work
We model and install OWNED systems. It matters for this page specifically because all the sizing logic above assumes the decisions are yours: the reserve level, the scheduling, the trade between cycling and resilience. Those are choices an owner makes and adjusts as usage changes. The electrical side of solar and storage is in-house work for us on a C-10, so the sizing conversation and the service conversation happen together rather than through an intermediary.