From 1 July 2025, NSW households and small businesses installing solar batteries will be able to access nearly double the support currently available, with new federal and state incentives working together to encourage both installation and smarter use of battery storage systems.
The Commonwealth’s Cheaper Home Batteries Program, worth $2.3 billion, will provide discounts of around 30 per cent off the cost of a typical small-scale battery system. On top of this, the NSW Government will offer an increased upfront payment of up to $1,500 for batteries that are connected to a Virtual Power Plant (VPP). This combined approach is designed to lower both the upfront and long-term costs of battery ownership.
For an average 11.5 kWh battery system, this adds up to almost $5,000 in combined support. For a larger 27 kWh battery system, which typically costs just over $30,000, eligible customers could receive around $10,000 in federal support and an additional $1,500 if they opt into a VPP.
A Virtual Power Plant is a coordinated group of solar batteries installed in homes and small businesses. When connected, these batteries can collectively supply power back to the grid during peak demand times. The system is managed remotely by a VPP provider, who monitors available energy and activates the batteries based on a contract agreed to with the customer. This allows battery owners to sell stored power when prices are high—usually at night—often earning more than typical solar feed-in tariffs.
Connecting to a VPP can shorten the payback period of a battery system. Beyond the upfront payment, customers can continue to earn revenue from selling excess electricity when demand and prices are high. These sales also contribute to managing electricity peaks, which reduces pressure on the grid and helps to stabilise prices for all consumers.
“NSW is world leading when it comes to generating rooftop solar power – and attaching more batteries to soak up our sunshine and store that energy will be good for bills and good for the grid,” Minister for Climate Change and Energy, Chris Bowen, said.
NSW Minister for Climate Change and Energy, Penny Sharpe, agreed saying, “We know the best benefit for the grid comes when these batteries are linked together, and NSW wants to be world-leading in encouraging households and small businesses to be a part of that.”
The Clean Energy Regulator will oversee safe installation under the Commonwealth scheme, with accredited products and providers. The NSW Government is continuing to work with industry on future activities under the state’s Peak Demand Reduction Scheme.
For those considering battery installation, it’s important to check that the battery is compatible with a VPP. NSW residents can connect through an Accredited Certificate Provider to access the incentive.
More details are available on the NSW Climate and Energy Action website here.
