Solar Coaster Podcast (AUS)

#10 - Rebate Reality Check: Two Weeks in with Aaron Jenkins

• Supply Partners • Episode 10

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 In this follow-up episode of the Solar Coaster Podcast, Wade Allen reconnects with Aaron Jenkins from Ecovantage, two weeks on from the launch of the Federal Battery Rebate program (Cheaper Home Batteries Rebate). With the scheme officially underway, they dig into the early numbers, real-world experiences, and what’s changed since the program rolled out.

Aaron shares insights from the front lines:
- How many STCs have actually been processed.
- Emerging trends in average battery system size.
- Why commercial and off-grid installs haven’t made their mark on the stats yet. 

The conversation tackles the practical realities of claiming the rebate: high audit and failure rates, the challenges of rapidly changing rules and product eligibility, supply chain pressure, and why checking your paperwork (and your battery model numbers) has never been more important.

They also discuss how state-based rebates are interacting with the federal scheme, evolving requirements around VPP capability and off-grid eligibility, and what early bottlenecks or red flags are cropping up for installers and traders. Wade and Aaron wrap up with advice for installers and how to avoid risky shortcuts as the whole industry grapples with surging demand.

Whether you’re a retailer, installer, or just tracking the future of batteries in Australia, this episode delivers insights and up-to-the-minute updates on the battery rebate rollercoaster. 

ABOUT THE PODCAST:
Welcome to the Solar Coaster! A podcast for navigating through the ups and downs of the Australian Solar and Energy Industry. Hosted by the Supply Partners Technical team and joined by industry professionals each episode to help you turn chaos into stability. We'll be talking about solar, batteries, EVs, Electrification and much more, so sit back and enjoy the ride.


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Welcome to the Solar Coaster, a podcast about the ups and downs of the Australian solar industry, brought to you by the technical team at Supply Partners with host Wade Allen and technical guru Andrew Thomson. Okay. Welcome to the Solar Coaster podcast brought to you by Supply Partners Australia's technical distributor. And we not only bring you some of your favorite high quality products, but also technical and sales training. I am your host, Wade Allen and not with me today, as always, my left hand man, my safety blanket. Andrew Thomson AT is under the weather today and he has left me a little vulnerable and exposed. And I keep look, I'm going to keep looking here at his chair and he's not going to be there. And cardboard cut out. Yeah, it's going to be like a phantom limb. But not to worry. In my younger years of theater, I was quite comfortable hogging the stage. So this will just be like an old comfortable pair of shoes, even though my big toe is sticking out. Four weeks ago we had Aaron Jenkins from EcoVantage here in the studio to discuss the pending federal battery rebate where we had a chat and there were still a few questions and concerns. There was lines still to be drawn in the sand. And yeah, so we thought, hey, let's get Aaron back in here now that we're a few weeks in and discuss where we're at and go over those concerns that we had before and bring up any ones that are that have come up since then. So, yeah, Aaron, thanks for making the journey back down the M1 this morning. I appreciate it. So, yeah. You busy at all? Got something to do? Yeah, yeah, a few things going on. A few things going on in the industry. So yeah, let's just start out with those numbers again. It was 2.3 billion that had been allocated to this rebate. 38 bucks an STC ish gave us around 60 million STCs at 9.3 was we were thinking about 6.5 GWh and we were actually discussing last time and average system size. If it's around 20, 25 kilowatt hours should give us about two years or so. And then we didn't know what was going to happen with the STCs. We still don't know what's going to happen after they run out, do we? Yeah, no, that's still very much speculation. Although interesting, the wording got changed. It's no longer the government buying the STCs created from batteries. It's the equivalent amount as they need to. So, okay, so lots of little changes happening in wording and policy and etc. And announcements industry is changing for the better. But it'll be really interesting to see where we are in two years or even one year. Yeah, you really gotta look at the fine print because they can put a comma in there and it changes everything. Absolutely. Put a different emphasis on a different syllable and you're up shit creek. So where are we at? Two weeks in, how many STCs have been traded? About 750,000 have been created in the registry. We'll take that back. 750,000 are in the registry either pending audit, pending payment, or have been created, traded and bought. So about 750000 in the rec registry that you can assume are likely to occur. And that's 10 days in, so about 75000 a day. It's been busy. Yeah, no doubt. So what's that about 80 megawatt hour divided by 10ish? 9.3-ish. Yeah, just under. Yeah. Okay, well it's moving. That's pretty good. It's a little low I thought. But anyways, is there anything that's holding up that approval status? Well, we said last time we were worried about the CER's ability to process through it. So if you look of that 750k there's been roughly 137 or so that have gone through the clearinghouse, so bought by the government and there's about another 25,000 or so that are sitting there registered. So back of the pub maths, that's what 20ish percent have been come out the other end of the process. So 80% still in that processing stage. So depends if your glass half full or half empty. In 10 days they've gone through 20%. That's great. Or in 10 days 20%. What happens when it gets exponentially bigger? We don't know how many of those 750,000 that have been put in are just battery, do we like we don't know if there's solar with it. Not from the REC registry data, no. Yeah, it just says. Yeah, yeah and so I, I looked at that. 750 000. And of that the actual number of entries was 4800. Just a bit more than 4800. So that's about 16.8 kilowatt hours per system. And last time we were talking 20, 25. That's. Why do you think that's so low? Well if you look at, they're mainly residential at this point you have to assume. Right, yeah. So. So commercial stcs from our end, they're only just starting to occur now. Okay, so you got longer sales cycle, EPC companies that are deploying that, they've got a longer pipeline, they do jobs that take four weeks to deploy, not a day. Gotcha. So you'd argue that if we have this conversation, we compare the notes in another month that that size probably going to go up. And do we have any visibility of which battery brands are winning the race? Currently not from our registry. There are some clever people that have data analytics that run that, but not me. Yeah, I'm wondering, I know from our major battery lines, like I did the math from last July to this July of what we've already sent out the door and what's to go at the door and we're at about a 4x. So yeah, 400 increase in battery sales. Yeah, that's huge. I mean proof in the pudding that the market needed it. But with that much speed, supply chains, pipelines. We spoke last time how you can't do bulk upload and everything's manual from our end, that's huge. Like you're talking about a four times multiplier in the industry with a total new program and everything has to be done manually still. Like we're still seeing software updates like even two days ago, changes to the system to allow this and that was wrong and just little bits and pieces moving. There's a lot of work going on. Of the 755,000 STCs that have already been registered, do you have visibility over any that have been knocked back? Because I know there's been some issues. Yeah. So let's go a little glass half empty rather than half full like I was saying before. Thank you. You go 750,000 of them. Like I said, there's 137 that have been bought, another 25000 registered. So let's call that say 150, 160,000. There's circa 50,000 that have been failed. So you're looking 20 something percent failure rate of those that have been audited and gone through. So that's a pretty decent risk, which isn't surprising if you look at what people were announcing and running with perhaps out of excitement in the early days before July, before the rules were clear as to what was acceptable for partial commissioning, et cetera. So that's what, 50,000 STC, that's $2 million that have been taken out the industry with failed claims. It'd hurt if it was your pocket. Yeah, no doubt. Yeah. So there's a bit of risk in there with STCs. Now is that auditing just from a paperwork perspective, probably because I don't. Is there any boots on the ground yet? Not that we've heard. And it's not something that we can filter like in the rec registry area through our own account, which has a bit more detail that we can see. They field audited desktop audits. Just audited at this point, you'd have to argue 50,000 stcs. That's quite a lot of installs. They're not all boots on the ground that waves likely to start up soon though. Yeah, it's. It's unfortunate, to be honest. Like, I have some good mates out there that have solar companies that have gotten kickback on that whole software lockout thing that SIG did. Unfortunately, it's unfortunate and it's. To be honest, it's kind of shit. It's what happens when you announce this is coming and we'll get to the rules by the launch date, but it's eligible backdated, like that's always a high risk approach. It's a good way of trying not to stop an industry in its tracks, but you gotta be really careful. And this is a. For like certificate creators like us, this is a pretty high risk period, especially on backdated claims. If you don't triple check that sucker and make sure there's nothing that's gonna sting you, you end up in the conversation of going, well, who's not getting paid or who's paying us back and it's not what you need as a business. Yeah, then there's. There is definitely risk on you STC traders. Like I saw one trader offering next day stcs. One day STCs for a reduced STC cost. But still, if it's taken days, if not weeks to get these things through, like you're saying 20% have been approved, that's a huge risk. Especially if 20. What did you say? 20% of the 20% of him failed? Yeah, that's a big risk. Yeah. So you guys, how long are you taking right now, do you reckon? A couple days, depending on the claim and the agent. So once people get on the merry go round, it's all right and they know the rules. But there's so many new entrants to the market as well at this point. Like the backlog of people that want to start doing this, which is what everyone's afraid of, it's up there. Or guys who used to do a battery every now and then and now they're doing them every day. There's a lot of complexities that come with that. I mean, you'd see that I imagine in your purchasing stock, people that used to do just your basic PV systems are now pivoting to everything's got a battery attached. Oh, yeah. Especially like the people that never gave you the time of day and now they're your best friend. Hey, you got any batteries? Tech support. Exactly. We also spoke about eligibility as a risk last time and something that popped up was, which was crazy, is that a, you know, typical batteries out there, they, they're now stackable and if you put, you know, four of them in a stack, that's 11 kilowatt hours. But it's the actual stack model number that's registered on the cec, not the individual module. And people were going out and adding a couple modules and not being able to claim their STCs because it's not the module what's going on there. Completely unnecessary inverter just to be able to get the rebate around it. Yeah, it's. That's. There's been a lot of clarifications last 10 working days, shall we say? 11 working days, which is great. So now it's a case of is the inverter with the end amount of storage registered with the CEC? So that's great. Give some clarity around it. What you then start getting into though is it might work as per the manufacturer specs, but is the final configuration approved and there are some big brands out there where you can put in a perfectly valid battery install, it'll work fine. As for manufacturer specs, but they haven't got that particular combo registered with the CEC yet. Oh, really? Yeah. Bit of fun. Oh, that's interesting. So if you go out, let's use that 11 kilowatt hour because that's a very popular size as it was previously and let's use the 16.8 now. So if you're adding two more modules and you get up to that 16 point what have you. So that inverter plus that stack has to be registered in order for you. To get the final combination needs to be okay. And so you definitely need to triple check that what you are selling and what you're going to install is going to be able to be eligible for those STCs. Otherwise you're wearing it because you're given that upfront discount. Right to how the solar industry works. Oh, so fun. Look, it's good for the consumer, but it just means everyone who's playing at the moment is carrying some risk. Whether they like to acknowledge it or not, you've got risk. And what about the last time we talked About a couple of the state schemes, the NT dropped theirs and WA was like trying to explain Wi-Fi to my Nana. It's so complicated. Like what's going on over in WA from Aaron. We don't dance around in WA heaps because it's a rebate, it's not a certificate. But they reduced it. They didn't want free batteries, just like New South Wales did. They wound it right down. The complexity in WA seems to be around. Is it an existing battery? Are you AC coupling? Is it connected to a vpp? What VPP can you connect to? Like you said, that seems to be a bit of a meal for people trying to get that rebate back. Yeah. So that brought up another thing is AC coupling. If you're just AC coupling a battery to an old system, whether you're in CSIP or you are just. It's just another system. Does that inverter and the whole system need to be brought up to compliance? So the changes on the CER's website now you can go onto. When you go. If you're attaching to an existing site that already has pv, it's a bit like the battery combo. Right. Everything needs to be CEC approved, otherwise you've gotta start having. Potentially there's opportunity for some of those retrofit products that have some of the controllability to step in, but everything's gonna be vpp Controllable is the end result. So especially for those old hybrids, I think we were talking last time, put a hybrid in, you can always put your batteries in later, that's great. But if that particular inverter's fallen off the CEC approved product list, that's actually one of the tougher combos that we're seeing at the moment where people going, it's fine, it's the battery, it's approved for it. Yeah. But it's not in the list. Wow. And this is all about lists. Lists and declarations is the current compliance program. What about the VPP in New South Wales? So the industry was done with the PDRS. It's a tricky one to claim. Honestly, they've upped it, which is great. It's still written, really, to be a consumer led or a retailer led claim. When I say retail, I'm talking energy retailer, not solar retailer. There are solar companies offering it and facilitating it. Some are doing it well, some are really struggling with it because ultimately, under the PDRS in New South Wales, if you're bringing the claim in and you're facilitating all the paperwork and making the deal happen, you're responsible for consumer satisfaction. So I don't think a lot of people have really tweaked to that just yet that if you told Nana this is the VPP she wants and you'll give her a rebate if she connects to this VPP off at upfront cost, if she doesn't like that vpp, she can come knock them back to you. Yeah, right. And there's also a lot of consumer education that goes around it. So it's, it's not moving particularly fast. There's a lot of moving parts around it. Well, I would imagine if, if you don't understand what it entails and all the risks associated with you, then you'd probably just steer clear of it. Yeah, we're seeing a lot of that. I think the key if they really want to get that up and going is to perhaps look a little bit further south to South Australia. They've got a VPP connection rebate under the reps program that moves a bit smoother. There's less onerous compliance on the consumer to prove it's about. Do you have a eligible product, was it installed by a licensed person, is it under warranty, et cetera. And are you using one of these pre approved VPPs not. Tell us everything from War and Peace and tell me how you did your due diligence, which again you're talking about consumers that don't live and breathe energy. They don't live and breathe policy in New South Wales. That can be quite challenging. It's good premise orchestration is what the grid needs. Encouraging that sound reasoning. Yeah, just I guess a bit like best one challenging on the compliance front. And so let's just talk about VPP because there was some clarity surrounding off grid as well. Yeah, which is great because I love my off grid and yeah there was previous things saying, you know, you had to prove that you were. If you were outside of a kilometer, you had to prove that it was going to be more than X to connect to the grid and vpp. It had to be vpp, which made no sense. But if it was VPP eligible now. Right? Yeah. Or capable. Not eligible. Capable. If you're within a kilometer, it just has to be capable so that in the future if you connect to the grid. Yeah, well basically that's what it means is if you're within a kilometer, make sure you're putting in someone, something, sorry, not someone that can be connected to a vpp. And if you're over a kilometer, do your thing. So it's become much simpler because previously getting written notice that it was going to cost a certain amount or there was the following complexities required to connect that off grid to the grid. It was just again, we're talking about overly onerous compliance. That doesn't really benefit the consumer. So that's a really good improvement. But that's what I mean by when you see lots of changes happening over the last couple of weeks, it's just the goalpost is kind of there. You can make it out roughly, you know, it's two poles, but how wide they are and how far away they are, you can't quite get it. And they're slowly getting clearer and better shaped. Yeah. And there's, you know, products out there like Selectronic that brought on the Mondo UBI for backstop in Victoria, but now that actually makes them VPP capable. Correct. So at least you can put that in if you need to and you're still capable. So that's great. I'm, I'm excited for the off grid market with this battery rebate. Some of the numbers I do just make it so much easier for the consumer to put in. Always it's always the battery that takes the hit. Because everyone's got a budget, right. They're like, oh, I got 50 grand to put in this off grid system and you give them a, you do the load profile and you give them the solution and it's 70 or 150. And it's always the battery that takes the hit because it's the expensive part. And it's like, well, shit, I guess I'll just listen to the generator for three hours a night. It's also, it gives you stability in that off grid scenario though. So. Yeah, so now it's like you get that 17 and a half or 18, whatever the rebate is going to be and you actually get a system that's fit for purpose, which is awesome. That's so great. Yeah. And it's well written because otherwise really you start looking at it going, well, how can you actually explain that in the realms of just like pub maths? How's it fair? So it's good to see that change. And that I think will also increase that 16 kilowatt hour number significantly. We start seeing those going, we talk about commercial pipeline, but correct. Wait till we see off grid numbers hitting. Yeah. Oh yeah. Well 50 kilowatt hours is average. Yeah. Yeah. Like if I lived off grid, that's exactly what I'd be putting in. Even if 40 was good, there'll be. Plenty of 70, 80 kilowatt hour. Claims maxing out that 50 kilowatt hour SDC ratio. I reckon. Yeah, yeah. No, that's what I'm sort of seeing as well. But yeah, touching back on small commercial, that'll be another one that's easily a minimum of 50. If not reaching that hundred and then who knows, maybe going back later and adding more. But, but like you said earlier, EPCs and people who focus on commercial, they've got pipelines, they've got a longer sales cycle. These projects take weeks, not days. So yeah. The reason that that 16.8 kilowatt hour average right now is so low is probably due to the fact that the off grid and small commercial haven't really kicked in yet. Yeah. I mean from our visibility it's largely resi at this point. Yeah. So. And that's what you'd expect to see. Yeah. I've been doing quite a few feasibility models of small commercial though in just adding a 50 or 100 kilowatt hour back on the break, even in the ROI is great. Like it's, it's gonna, it's gonna be crazy demand saving. Like it's. You've got so much more levers, you can pull in a small commercial battery than mom and dad's house. Yeah. And there's going to be some. I know Amber is beta testing small commercial VPP right now as well. They're very small. Like I think it was 20 megawatt hour annual users, which is a small business. But when that works it'll, you know, if you can start offering VPP for businesses that operate nine to five, that'll. Yeah. You don't want. Yeah, exactly. There's a risk associated with anybody that is, you know, in those peak times, got to make sure you got battery. I'm just saying that's actually cool. If you're a 9 to 5 business or you know, 8 to 6 business, you just let your battery do its thing overnight. You could have a seriously good roi. Absolutely. Oh man. It takes years off. Yeah, it's great. We talked last time about what are some of the things that installers should be doing now. And I just wanted to touch on it again because it was surrounding forecasting and securing your stock. Like we've, we've now seen it. We're two weeks in and we're waiting for more batteries to show up just because of all the pre sales that have taken place. I would imagine everyone's been selling into this now for a few weeks. If not multiple, like probably seven, eight weeks. You should be able to determine what Your sales cycle is going to be. Yeah, I mean we kind of saw that limbo period before it kicked in properly and then we saw the big boom the final week or two before and now we're in it. You'd think in a couple of weeks time you'll know what it's going to look like. You've got the crazy first quarter where everyone's going, gimme, gimme, gimme. Then we're going to have the crazy second quarter because summer and December, it's such a great, not stressful period at all. And now we've got two reasons why the STCs are going to drop for a bunch of claims. So that's going to go bonkers. But you'd have to assume that business is going to get a bit of a feel, if not for market opportunity, just for their ability to deliver. Like find an installer that's bored right now with battery accreditation. Right. There isn't one. So you're going to have an idea of either what you can sell or what you can install. One of those two things is going to be your limit. So you'd assume people can start to get a bit of a fuel forecast in the coming. I'd say probably a month or two maybe as opposed to now. Yeah, it's been 10 days. But yeah, I'm going to continue to harp on it like really, really look at your numbers, look at your sales, look at what's coming down the pipe and get your forecast into your. Into your supply partner. Not supply partners. Well, supply partners. But your name. Yeah, yeah, I just thought of that. But you got to get them in because we are forecasting some manufacturers now. If I put a PO in today, it's for November. Yeah. Wow. So you really have to work with your distribution partner in order to secure that stock. Otherwise you're going to be up shit creek for sure. And especially what you said come November, December, when we've got a double whammy, STC drop. Man, I feel sorry for everyone out there who's going to be installing batteries on Boxing Day this year. Yeah, there'll be a few. Yeah, yeah. It'll be worse than any other year for sure. Like you will be working over the holidays. I'm just hoping we have bulk uploads by then. So we might not have. But I'm not entirely sure if I put a bet on that. Yeah, you might have to come in on the 30th and we do that. For LGCs anyway, so may as well. Yeah. Is there anything else that we should be concerned about or, or talking about before we wrap up. Look, I think it's probably the same thing I said last time, Remember the last time we said, watch this space, stay tuned. There's lots of questions that are coming up that don't have answers yet and we just need to stay abreast of it. We're talking about off grid, we're talking about retrofitting AC coupling. There's still some of those floating around there. So just be aware of what you're selling. Is it configured? What's changing? What's an issue coming up? Like you said before, if you're in the commercial space saying, oh, this is going to be great because you're used to selling smaller installs and now you go on the next rank up, see, is there a VPP that it can be connected to? Are you selling kit that is VPP capable? Because not all commercial products are. Yeah. So just the industry is going through a very big upskilling. We saw an extreme case of that in New South Wales the end of last year with, oh, you know, the regs are that strict, are they? Or they say this, we're going to have the same thing again, especially once we start seeing, you know, large scale field audits for this first wave of battery installs. So just make sure you're doing a good job, you know what you're installing and you ready for it to be looked at. Yeah, that's, that's the big one, right? Yeah, don't rush. Yeah, there's plenty of time. Just I said last time, charge a fair price for a fair quality install. Do it right, do right by the consumer. You're not doing them a favor by giving them a cheap install that won't pass muster. Yeah, like no one wins in that. All right, man, well, thank you so much for coming back in. I really appreciate it and I hope everyone got something out of this. Good to see you again. Take it easy. Cheers.