The Sunverge storage batteries would normally cost $16,000 if acquired outside of the special project, but householders will be able to buy them for just $3500 under the heavily-subsidised program.
AGL will pump in $9 million to the project, while there is also $5 million in federal government funding for the $20 million demonstration project, which will provide participants with discounted batteries supplied by AGL's partner Sunverge.
The solar-powered batteries that make up the power plant will be able to store seven megawatt-hours of energy, with output equivalent to a five megawatt solar plant.
AGL managing director Andy Vesey said the project would soon be expanded to include other suppliers of storage batteries, but Sunverge had been chosen initially because it fitted the technical and quality requirements of the ground-breaking program which he labelled the largest of its type in the world.
A similar project in New York is preparing to do a similar trial, but with only 300 households.
He said the project would demonstrate alternative ways to manage peaks in energy demand, contributing to grid stability and supporting the higher penetration of intermittent, renewable generation on the grid. He was speaking in Adelaide at the launch of the project. The South Australian capital is at the heart of the state's energy crisis.
South Australian Treasurer Tom Koutsantonis told reporters in Adelaide that battery storage was a game-changer.
Mr Vesey said households were likely to save the equivalent of about $500 a year off their energy bills by participating in the program.
The batteries are to be rolled out in three phases over 18 months, with the whole demonstration project lasting five years.
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