Economy

South Australian election “about keeping the lights on”: Will Tesla and Weatherill’s home battery commitment help businesses?

Emma Koehn /

Elon Musk

Elon Musk and South Australian Premier Jay Weatherill in July 2017. Source: AAP/Ben Macmahon

A plan to install 50,000 home batteries and solar panels in homes across South Australia homes marks a new chapter in the state’s relationship with billionaire Elon Musk, but business groups say future energy policies need to take into account the costs of power for both businesses and consumers.

Over the weekend South Australian Premier Jay Weatherill announced a scheme that would see 50,000 units, including solar panel systems and Powerwall 2 batteries created by Elon Musk’s Tesla, will be supplied and installed to households free of charge.

The program will start with more than 1000 Housing SA properties receiving the technology, before the plan is extended to 24,000 housing trust properties and then the general public across the state.

“We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefitting with significant savings in their energy bills,” Weatherill explained in a statement.

While a state election now weeks away on March 17, the government is looking for a retailer to delivery the battery program. This is the second time Elon Musk’s company has been involved in South Australia’s power security woes, after the Tesla founder got involved in a commitment to provide the state with the world’s biggest battery.

Businesses want lights to ‘stay on’

The new battery policy is slated only to be delivered to households, rather than businesses, but Chris Hooper, chief executive of South Australian based accounting firm Accodex, says individual businesses aren’t that concerned about getting free installation for Powerwall batteries.

Instead, they are more focused on policies that contribute to power stability, says Hooper. If this policy helps with that, it will be a winner.

“The number one thing is grid stability, because I know a lot of businesses who lost an absurd amount from the knockouts,” Hooper tells SmartCompany.

When it comes to the state’s power policy, Hooper believes in the lead up to the state election, the business community is more focused on the outcome of energy policies, rather than exactly how energy security is achieved.

I think that’s where the interest from the business community ends: ‘As long as the lights stay on, we’re sweet!’,” he says. 

“I’ve always maintained this election is going to be predicated on keeping the lights on.” 

Senior policy advisor at Business South Australia, Andrew McKenna, says that while policies like Weatherill’s battery scheme are focused on households and consumers, businesses in the state have experienced the same concerns about energy prices and supply.

The businesses have actually faced in some cases a lot higher or comparable price increases, and business groups are quite conscious of that,” he tells SmartCompany

While it’s “a bit difficult to judge” the long-term effects of a standalone policy like the battery and solar panel commitment, McKenna says Business SA is judging all energy policy suggestions on the basis of whether they can deliver uninterrupted power supply to businesses at the lowest cost to all parties.

“We’re mindful it’s not just about businesses, it’s about having reliable power overall,” he says. 

McKenna says there has been and will continue to be “significant interest” in developing new renewable energy businesses in the state, even though it is unfortunate that drive has come from supply issues.

“There is still a lot of renewable energy potential in the state,” he says.

Hooper says there are also other pressing issues in the South Australian business community beyond power, including concerns about a sluggish economy and policies like payroll tax.

Over the weekend, South Australia Liberal leader Steven Marshall announced an opposition policy to scrap payroll tax in the state for businesses with wages bills of less than $1.5 million.

Hooper says that’s “probably going to be the winner” as a policy for the business community, but doubts it’s an election winner in its own right.

The Weatherill government previously outlined a series of payroll tax changes in the state’s most recent budget in mid-2017, including a commitment to cement tax relief that had been offered through rebates in the past. This would mean businesses with payroll of $1 million or less would be subject to a tax rate of 2.5%. The government also pledged to increase the threshold at which the maximum payroll take of 4.95% kicks in, from businesses with a payroll of $1.2 million to those with a turnover of $1.5 million.

Read more: How Elon Musk got involved in South Australia’s power woes — a timeline 

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Emma Koehn

Emma Koehn is a former senior SmartCompany journalist.

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