The Australian Government has expanded the Cheaper Home Batteries Program, increasing expected funding from $2.3 billion to an estimated $7.2 billion over four years.
The expanded program is expected to support more than two million battery installations by 2030, delivering around 40 gigawatt hours of additional storage capacity. This compares with the earlier estimate of one million batteries.
Energy Minister Chris Bowen said the changes were intended to build on the widespread uptake of rooftop solar, particularly in suburban and regional areas.
“Australia is a solar nation – we’ve got more solar on our roofs than pools in our backyards, and we want to match that success with home batteries to cut bills for everyone, for good,” Minister Bowen said.
What the program has delivered so far
In less than six months, more than 155,000 households and small businesses have installed batteries under the program. Around three-quarters of these installations have occurred in suburban and regional areas.
The 3.5 gigawatt hours of storage added during this period has almost doubled Australia’s home battery capacity compared with levels before the program began. About half of participating households have also installed solar panels for the first time or upgraded existing systems.
In a statement released over the weekend, Minister Bowen said that The Australian Energy Market Commission has found that increased battery use helps smooth evening demand and reduce peak pricing. On a conservative outlook, broader battery uptake could reduce electricity bills across the system by around 3 per cent each year.
How the federal battery discount works
The Cheaper Home Batteries Program provides a discount of around 30 per cent on eligible battery systems ranging from 5 kilowatt hours to 100 kilowatt hours. Batteries can be connected to new or existing rooftop solar systems.
The discount is delivered through the Small-scale Renewable Energy Scheme using small-scale technology certificates. Consumers do not apply directly to government, with discounts usually applied by accredited installers and retailers or claimed through the REC Registry.
The Clean Energy Regulator administers the scheme, with product accreditation managed by the Clean Energy Council and installer accreditation through Solar Accreditation Australia.
New rules take effect from May 2026
From 1 May 2026, subject to regulations being made, the program will move to a revised structure that changes how discounts are calculated and how support is spread across battery sizes.
Under the new settings, the small-scale technology certificate factor will decline every six months and at a faster rate through to 2030. The level of support per kilowatt hour will taper as system size increases, while remaining available for battery systems up to 100 kilowatt hours.
The revised structure applies the certificate factor at:
- 100 per cent for the first 14 kilowatt hours
- 60 per cent for capacity above 14 and up to 28 kilowatt hours
- 15 per cent for capacity above 28 and up to 50 kilowatt hours
The first 50 kilowatt hours of a system remain eligible for certificates, even where total system size reaches 100 kilowatt hours.
The DCCEEW says the revised settings reflect declining battery costs and are intended to ensure funding can support installations across the full life of the program.
Battery size becomes a policy focus
The revised federal framework places greater weight on battery sizing, with government guidance advising households and businesses to match battery capacity to actual electricity use.
The DCCEEW warns that oversized batteries can limit benefits for both consumers and the grid, particularly where solar output or inverter capacity does not support larger systems.
Households are encouraged to seek multiple quotes, confirm product and installer accreditation, and understand warranties, payback periods and how the discount is applied before installation.
Interaction with NSW Virtual Power Plants
The revised federal rules operate alongside NSW incentives for connecting batteries to Virtual Power Plants.
From 1 July 2025, NSW households and businesses have been eligible to receive up to $1,500 for connecting an eligible battery to an approved Virtual Power Plant under the Peak Demand Reduction Scheme. This incentive can be combined with the Commonwealth battery discount.
Virtual Power Plants link multiple batteries to share stored electricity with the grid during periods of high demand. Participants can receive an upfront payment and earn ongoing income by selling surplus electricity, depending on provider terms.
All batteries installed through the Cheaper Home Batteries Program are eligible to connect to a Virtual Power Plant, provided the battery model is compatible.
Oversight and program delivery
The Department of Climate Change, Energy, the Environment and Water is responsible for policy settings under the program, including purchasing certificates and adjusting support levels where required.
The Clean Energy Regulator manages delivery and compliance through the existing renewable energy framework, including inspections and accreditation requirements.
Minister Bowen said the revised federal settings were designed to balance household support with broader budget pressures.
“By responsibly managing the budget, we’re able to fund the things that matter most to Australians such as strengthening Medicare, cheaper medicines, slashing student debt, expanding our Cheaper Home Batteries program and tax cuts for every taxpayer,” he said.
The NSW Virtual Power Plant incentives have been available since 1 July 2025. The revised federal discount settings apply to battery installations from 1 May 2026.
