Australia’s Federal Government has promised to make batteries cheaper, and by doing so anticipates energy bills for households, small businesses and community facilities could be cut by up to 90%.
Following Labor’s landslide re-election on Saturday, the $2.3 billion Cheaper Home Batteries Program will be rolled out from July 1 2025, with over 1 million new batteries expected by 2030.
This is a huge step in the right direction for Australia’s renewable energy transition as more baseload generation assets retire and will provide many homes and businesses with much-needed cost of living support.
What do we know about the Cheaper Home Batteries Program so far?
Since the announcement back in April, there’s been a lot of speculation in the industry about how the scheme will work.
On May 12, Smart Energy Council held an industry briefing to share more detail about the program, from Climate and Energy Minister, Chris Bowen.
Here’s a look at what the Federal Government has confirmed so far:
- From 1 July 2025, the Government will give a discount on installing VPP-ready battery systems alongside new or existing rooftop solar.
- The discount is 30% of a typically-priced battery – around $4,000 for a 11.5 kWh battery or around $3,000 for a 8 kWh battery.
- Support will increase based on the size of the system, with larger batteries up to 100 kWh supported for their first 50 kWh of usable capacity – meaning small businesses and community facilities will also be eligible to receive a subsidy if the battery size is appropriate for their needs.
- The scheme will be delivered through the existing Small-scale Renewable Energy Scheme (SRES). This national scheme has already helped drive the installation of rooftop PV on more than 4 million homes.
- The absolute value of the discount will decline over the next 5 years in line with expected battery cost reduction. The battery discount would decline over time until the scheme ends in 2030 – similar to how rooftop solar support has been designed to taper as technology costs fall and businesses build capability.
Battery eligibility criteria
- Batteries from 5 to 50 kWh in capacity are eligible for financial support, as long as total capacity does not exceed 100 kWh.
- Batteries can be installed with an existing or new solar PV system.
- Batteries are capable of being coordinated through a virtual power plant (VPP).
- Installation is completed on or after 1 July 2025, even if partly installed earlier.
- The system may be on or off-grid.
- The battery system and components are listed on the Clean Energy Council (CEC) approved product list.
- Installation must be undertaken by/with supervision on site from an accredited installer under Solar Accreditation Australia.
Discount
- The discount will be provided through Small-scale Technology Certificates (STCs), equivalent to around a 30% discount on the cost of a typical installed battery in 2025
- For example, the discount rate in 2025 would be 9.3 STCs per kWh of usable capacity (so the discount is worth around $370 per kWh).
- A 11.5kWh system would be discounted by around $4,000.
- The rate of discount will decline over time, similar to solar PV, as battery costs come down – we explain more about how the discount is calculated below.
- Batteries may also be eligible for State or Territory incentives.
How do businesses and households access discounted batteries under the Cheaper Home Batteries Program?
Support through the Cheaper Home Batteries Program will be provided through an existing scheme – the SRES – which is administered by the Clean Energy Regulator (CER).
The process will remain the same via the SRES – a discount on the upfront cost of an installation will typically be offered by a solar battery retailer or installer as part of their quote. The installer/retailer will manage getting the discount for the consumer. The CER will be able to issue Small-scale Technology Certificates (STCs) for eligible installations under the SRES once regulatory amendments are in place.
Do I need to have solar?
Yes, batteries must be connected to an existing or new solar system that is eligible under the small-scale scheme. Flow Power can facilitate installation of solar alongside your battery system if you don’t have an existing system.
What does this mean for businesses considering batteries?
Although the scheme is predominantly aimed at households, small businesses and community facilities will also be able to access the subsidy. Many small businesses and community organisations, like cafes and soccer clubs, already have (or could install) solar systems and are eligible for an upfront discount on battery systems up to 50 kWh in the same way as households.
Larger batteries up to 100 kWh can also receive financial support for the first 50 kWh of capacity. Schools, warehouses, cold storage systems, community facilities and more have all
been eligible through the SRES. This could lead to significant savings on your business’ electricity costs, so if you’ve been considering installing battery storage, this may be the perfect opportunity to invest.
How does this work with existing schemes?
Some states and territories are helping with battery incentives and some offer zero interest loans as well. The Cheaper Home Batteries program is designed to complement these. All states are expected to maintain their effort to accelerate uptake.
Existing state and territory schemes in the NEM include:
- Energy Saver Loan (Tasmania) – interest free loans of $500 and $10,000 over three years to eligible households.
- Peak Demand Reduction Scheme (New South Wales) – Up to $2,400 discount on installation + $400 for connecting to a VPP.
- Sustainable Household Scheme (Australian Capital Territory) – interest free loans of between $2000 to $15,000 to eligible ACT households.
What if my business is already installing a battery?
The scheme has been designed so homes and businesses can still buy and arrange installation of their battery. To be eligible for the rebate, make sure to wait to switch on and operate the battery until July 1 2025.
How is the 30% discount calculated?
The discount is calculated in proportion to the size of the battery system, meaning its usable capacity in kWh. It’s not calculated on 30% of the cost of the battery.
Each kWh receives around $370 in financial support throughout 2025, so larger capacity systems will receive more.
This means for an 11.5 kWh battery, the subsidy is around $4,000. For a typically priced home battery, this equates to around 30% after installation.
It’s important to note that the subsidy will remain the same no matter what the upfront cost is. This ensures that the size of the subsidy provided for batteries is not affected by pricing strategies of individual brands or businesses.
Why does the 30% discount decline over time?
As battery costs decline and businesses build capability, government support for building Australia’s home battery installation sector will taper.
This is similar to the successful approach that has been taken with rooftop solar, as technology and businesses gain maturity. The battery discount will decline over time until the scheme ends at the end of 2030.
The predicted taper rate would likely see the subsidy per kWh halve by 2030. It is expected that the support for every kWh installed would go from around $370 in 2025, to around $185 per kWh in 2030, but we expect the installed costs of batteries to also come down over the same period so the support continues to drive uptake. Each year, costs and uptake will be assessed to ensure the subsidy is set at the right level.
To maximise value from the rebate and start saving from July 1, we recommend installing as soon as possible.
Act early to beat the rush
Installers industry-wide are now preparing for a surge in demand, as businesses and households look to take advantage of the government subsidy. This will likely cause supply chain delays, so don’t hesitate to reach out now if you’ve been considering battery storage for your business.
Flow Power’s team can help your business find the right solution and support you from end to end; from modelling and installation to ongoing management and integration into your retail contract.
To avoid missing out on potential savings, secure your installation today and Flow Power’s in-house solar and battery specialists will manage the rest for you.
