Located at Brindabella Playground, the 80 kWh battery was installed by grid operator Endeavour Energy, with assistance from Shellharbour City Council.

Endeavour Energy general manager, future grid and asset management, Colin Crisafulli said by collective storing energy generated by rooftop solar during the day and releasing it during peak demand in the evening, this would reduce household power prices, even for those not involved in the scheme.

"It lowers the cost and lowers the peak demand and needs on the network," he said.

How the battery works is that Origin Energy customers with rooftop solar who sign up to the program will feed in their excess electricity to the community battery during the day.

When the sun sets and solar panels are no longer producing power, the electricity in the battery will then return to customers.

The battery is a first for the Illawarra, as part of a wider trial being rolled out by Endeavour Energy that will see more than 50 batteries installed across the electricity network in the Illawarra, South Coast and Southern Highlands, including another in Kiama Downs.

While each battery costs in the tens of thousands of dollars, with home batteries costing upwards of $10,000 on their own, a community battery was more cost effective, Mr Crisafulli said, while storing energy locally avoided larger investments in transformers and high voltage power lines to supply additional power during peak periods.

Shellharbour City Council provided the land for the battery to be installed and deputy mayor Kellie Marsh said it was a win-win for residents' budgets and the environment.

"It's a significant step forward in the strive for clean and green energy," she said. "Not only is this good for the environment, it will be good for the hip pocket of some of the residents of Shell Cove as well."

Following the Shell Cove battery which is solely funded by Endeavour Energy, federally-funded community batteries will be installed in Warrawong and Dapto. Endeavour Energy will also support these batteries, with eight batteries coming to Dapto and five in Warrawong

Endeavour Energy received a $1 million grant to fund the batteries that will power hundreds of households.