Understanding energy storage

Learn how energy storage works and ways to save electricity for later use
A home battery.
A home battery.

What is energy storage?

Energy storage is how we save electricity for later use. As we switch to more renewable sources like solar and wind power, we need energy storage to capture the energy when it’s available to make sure we have power when the sun isn’t shining, and the wind isn’t blowing.

There are lots of ways to store energy including batteries, electric hot water systems, electric vehicles and pumped hydro.

Understanding peak demand & why we need storage

Peak demand happens when lots of people are using electricity at the same time. It’s often when we come home from work or school and start cooking dinner, turn on the TV and devices, or use the heater or air conditioning. It’s like rush hour for electricity.

Why is it a problem for the grid?

Higher costs

As peak demand grows, more investment is needed. To keep up with peak demand and maintain a reliable electricity supply, networks need to invest in added infrastructure. These upgrades or additions cost money, which are funded through everyone’s electricity bills. So over time, as peak demand grows this can lead to higher electricity prices.

Disruptions

When lots of people use electricity at the same time, the strain on the grid increases the risk of power outages and blackouts. That’s why we need smarter ways to manage energy use.

Added pressure

With lots of people needing power at the same time, there’s extra pressure on the electricity grid to supply it. This increase in demand means the grid needs to work harder to deliver enough power to everyone at the same time. Peak demand is what determines how much investment is needed in the electricity grid.

So, when you hear peak demand, think of it as the busiest and most challenging time for the grid. Storage is one way we’re investing to better manage peak demand, which helps keep energy safe, reliable, and affordable.

How storage makes a difference

During the day, energy storage systems, like batteries, store extra solar energy that isn’t being used. In the evening, stored energy is released to help meet demand, reducing pressure on the grid and flattening the peak in electricity use.

And while batteries are a common and effective form of energy storage, they’re not the only one. Other technologies like pumped hydro, electric vehicles, and even electric water heaters all help to soak up energy and shift demand to support the grid.

A diagram of how storage works in the electricity supply.A diagram of how storage works in the electricity supply.

How can you help if you don’t have storage?

The good news is, even if you don’t have an energy storage system, there are ways you can still help reduce peak demand. Here are some tips on how you can get started.

Optimising your electricity usage

If you’re on time-of-use pricing, you could save money by shifting your usage to off-peak times. Check out our resources on optimising your usage for more information.

Getting the most out of your solar

Use appliances like dishwashers, washing machines, and pool pumps during the day when solar energy is plentiful. Check out our resources on solar for more information

Mythbusting series

Think batteries are just for homeowners with solar? Think again. Ausgrid’s Emma and Kira explore the growing role of energy storage, from community batteries to grid-scale solutions, and how they’re helping to create a more flexible, reliable energy system.

Battery basics

Not all batteries are the same—but they all help us use energy more smartly. From powering a single home to supporting entire suburbs and the grid itself, batteries play a growing role in storing clean energy and reducing pressure on the energy system.

Let’s look at the different types of batteries and how they each help keep our energy reliable, affordable, and renewable.

Community battery

A shared battery for your neighbourhood. It stores solar energy from nearby homes, which is then shared to help the community use more clean energy and support the grid, making the benefits accessible even for those without their own solar.

Grid-scale battery

A large battery that supports the electricity grid. It stores energy from solar and wind farms and helps keep electricity stable and affordable for everyone.

Home battery

A battery you have at home that stores energy from your solar panels. You can use it later, like at night, to lower your bills. Some batteries can also keep the lights on during blackouts.

How home batteries work

Home batteries store energy so it’s available when you want to use it. By understanding how charging, discharging, and battery size work, you can make smarter decisions about your energy use.

Charging

  • This is when your battery fills up with electricity, usually during the day using excess solar power.
  • Depending on what kind of battery you have, you might be able to charge from the grid during cheaper, off-peak times. Think of it like filling a water tank with water for later.

Discharging

  • This is when your battery sends stored energy back into your home, usually when the sun isn’t shining and your solar panels aren’t generating power.
  • It helps reduce how much electricity you need to buy from the grid, saving you money. It’s like turning on the tap and using the energy you saved earlier.

Size

  • A bigger battery (measured in kWh) can run your home for longer. But power (measured in kW) tells you how fast energy can be used.
  • A battery with lots of capacity but low power might run lights for hours—but not heavy appliances like ovens.

Capacity

Capacity is measured in kilowatt-hours (kWh) and tells you how long your battery can run your home. A 10-kWh battery could run 1 kW worth of appliances for 10 hours, or 2 kW for 5 hours.

Efficiency

Tells you how much of your stored energy you can actually use. If a battery is 90% efficient, and you store 10 kilowatt-hours of energy, you’ll only get about 9 kilowatt-hours back when you use it.

Power

Is measured in kilowatts (kW) and tells you how many appliances your battery can run at once. A battery with low power might only run lights and a fridge, while a higher-power battery could also run a heater or oven.

Tips before buying

  • Talk to a Clean Energy Council accredited installer for expert advice
  • Ask about warranty, lifespan, and efficiency
  • Look at your current level of energy use

Common questions for home batteries

Yes, it can. A battery lets you store solar energy during the day and use it when electricity is more expensive — like in the evening. This can reduce your need to buy energy from the grid.

Batteries can be an upfront investment. Prices vary depending on size and type, but some households may be eligible for rebates or incentives that help reduce the cost.

Not always. Batteries tend to suit homes that generate a lot of solar energy, use more power in the evening, or want long-term bill savings. They can also be useful if you have an EV or plan to electrify your appliances.

No. A battery helps, but it’s not the only option. You can also shift your usage — like running your dishwasher or charging devices — to avoid adding pressure to the grid when demand is highest.

Some can. Not all batteries provide backup power — you’ll need a system set up specifically for that. It’s worth checking with your installer if this feature matters to you. This sort of battery is called an ‘islandable’ battery

Yes, to a point. Most home batteries automatically manage charging and discharging based on your usage and solar generation. Some systems let you monitor or adjust settings through an app.

Understanding Energy Storage Factsheet

A printable overview of how energy storage works.

Additional resources

energy.gov.au

Check if you qualify for government rebates or incentives

SunSPOT

Estimate the cost of, and savings to be made from, installing solar or batteries

Looking for something else?

More ways to save on your energy bill

Demystifying your electricity costsEngaging with your electricity retailerGetting the most out of your EV