German energy storage company Sonnen has begun assembling home batteries in Adelaide, using part of the old Holden site in the city's north.

Sonnen will use the plant as its production base for batteries sold into the Australian, Asian and South Pacific markets.

Premier Steven Marshall says the plant represents a significant step in the revitalisation of South Australia's industrial base.

"The assembly and manufacture of 50,000 energy storage systems in Adelaide over the next five years will create around 430 manufacturing and installation jobs in the state and locates South Australia at the centre of this developing industry," Mr Marshall said on Tuesday.

Sonnen's decision to set up in Adelaide was first announced in February by the previous state Labor government.

The company's batteries use lithium-ion phosphate technology, with their products guaranteed for 10,000 cycles, equal to about 27 years.

Local demand for its products will be helped by the Liberal government's $100 million scheme to subsidise up to 40,000 household battery systems across SA in a bid to drive down energy prices.

Eligible households can access grants of up to $6000 and low-interest loans to cover the cost of installing solar panels and home batteries.

Energy Minister Dan van Holst Pellekaan said the batteries produced by Sonnen in Adelaide would play a significant role in SA's continuing transition to renewable energy.

"Delivering cheaper, more reliable power for South Australians is the principal reason the government established its home battery scheme but the investment and jobs secured by our priority deal with Sonnen is a massive bonus.