The Albanese government is doubling down on its Cheaper Home Batteries rebate, tipping nearly $5 billion more of federal funding into the red-hot scheme, while also adjusting its settings to make it go further – including by gearing it towards smaller systems.
As Renew Economy reported last week, the stunning success of the scheme has defied all expectations, with the Clean Energy Regulator last week forecasting it to hit 175,000 valid applications by the end of 2025.
On the flip-side, this runaway success has raised major concerns, including that the soaring popularity of super-sized home battery systems of 50 kWh and above is chewing through the four-year scheme’s initial budget – $2.3 billion – at an unsustainable rate.
On Saturday, though, federal energy minister Chris Bowen put to bed any concerns the rebate would be a one-year wonder, announcing instead that it is being boosted with fresh funding, while also being tweaked to make it more sustainable for consumers, industry and the federal budget.
Bowen says the government will expand the program to an estimated $7.2 billion over four years, helping a total of more than 2 million households install a battery by 2030, and adding around 40 gigawatt-hours of storage capacity behind the meter.
The key change to the scheme’s settings, as flagged by the Smart Energy Council during the week, will be the introduction of a sliding scale rebate, where the size of the discount decreases as the size of the battery increases.
Under the changes, which will come into play from May 01 2026, batteries sized up to 14 kilowatt-hours (kWh) will continue to receive the full roughly 30 per cent discount off the up-front cost of a storage system. Batteries sized between 14 kWh and 28 kWh will get 60 per cent of the discount, while batteries between 28 kWh and 50 kWh will get 15 per cent.
This change addresses a trend that few saw coming – that the rebate would be eaten up by systems sized at 50 kWh and above, as household take full advantage of the one-off, per-kWh discount.
According to industry statisticians, SunWiz, the 50-75 kWh and the 30-50 kWh market segments grew by 71 per cent and 58 per cent, respectively, in November – much more than any other segment.
As the Smart Energy Council’s chief advocacy officer, David McElrea told Renew Economy last week, during the Solar Insiders Podcast, the fact that households have been going big on their batteries is not necessarily a bad thing, in light of electrification and bigger solar systems.
“Provided you get all the engineering right and you can adequately draw down on it, it’s not a bad thing at all,” he told the podcast.
“But I think from the perspective of the government being realists … they pay a higher rebate for larger batteries, and therefore the more of the larger batteries that are sold then the more of the cost to government, and the quicker that they exhaust the funding they had originally set aside.
“It’s also about spreading the benefits of this consumer energy solar revolution to as many people as possible, so that as many people get to benefit from it.”
The range of sizes of batteries supported under the program remains unchanged, meanwhile, with batteries up to 100kWh still in the mix, with the newly trimmed discount applying to the first 50kWh.
The rate that determines the upfront discount – which is dependent on the number of certificates each system creates under the Small-Scale Renewable Energy Scheme (SRES) – will also begin to start coming down from May, from 8.4 to 6.8, in addition to the adjustments for medium and large systems.
- The annual decline rate in the small-scale technology certificate factor (STC Factor) will then decline every six months at a new rate. This is in keeping with the settings for the rooftop solar rebate under the SRES, and was flagged by Bowen at the launch of the battery rebate.
“With these responsible policy adjustments, we’re ensuring batteries can be the next lasting Labor legacy, just like rooftop solar,” said Bowen on Saturday.
“We want more Aussie households to have access to batteries that are good for bills and good for the grid – because it means more cheap, fast, safe solar energy is available in our homes night or day, when and where it’s needed.”
The Smart Energy Council (SEC), which this week met with members to address concerns that the home battery market was running too hot and headed for a bust, has welcomed the new injection of funding and says the timing of the changes provide an “appropriate period” for businesses to adjust.
“We are a responsible industry that believes in spreading the benefits of solar and batteries to as many people as possible. If that means changes to the rebate we support that,” SEC chief John Grimes said on Saturday.
“Energy minister Chris Bowen made it clear when launching the program that future adjustments would be made if needed, and he’s consulted with industry ahead of announcing these changes.
“The AEMC has shown that a faster rollout of batteries can cut power bills by around 3 per cent. Extending and refining this scheme will help deliver those savings,” Grimes said.
“It’s now clear as sunlight that making more Australian homes and businesses Sunsoakers and Sunsavers is the fastest way to slash power bills, hand back energy independence to consumers, and provide grid stability.”
