Finally! Federal Labor on Sunday unveiled a $2.3 billion plan to dramatically boost home battery uptake in Australia, through a national scheme that promises cut the up-front cost of installation by thousands of dollars and slash energy bill for all.
So what is the Albanese government’s Cheaper Home Batteries Program offering? And why are some industry insiders describing it as “the most important development in consumer energy” since the launch of the national rooftop solar rebate?
Let’s take a look…
What is it?
Federal Labor’s Cheaper Home Batteries Program, officially announced by the Albanese government on Sunday morning, promises to be Australia’s first ever national policy targeting consumer battery uptake.
Federal Labor says the $2.3 billion program is costed into the 2025-26 federal budget – under the line item, “decisions taken but not yet announced – and would launch on July 01 if the Albanese government is re-elected on May 03.
The scheme would be uncapped, and delivered through the existing Small-scale Renewable Energy Scheme (SRES) – a hugely successful and well established national scheme that has helped to drive the installation of rooftop PV on more than 4 million homes.
As it does for solar, the size of the battery discount on offer through the SRES will reduce over time in line with falling battery costs, out to 2030.
The SRES is governed by the Clean Energy Regulator and any batteries installed through the new rebate scheme would have to meet Australian standards and be listed as an accredited and SRES eligible product with the Clean Energy Council. There will be similar strict guidelines for installers working within the scheme.
What is it offering?
Initial reports have suggested that the rebate will cut home battery costs by 30 per cent, one-third, or more than $4,000 – but these numbers refer specifically to a 11.5 kilowatt-hour (kWh) battery, the size landed on by the government as “average” for Australian households.
The actual discount is calculated at $370/kWh, which means that in the case of a Tesla Powerwall 2, which is 13.5 kWh at a current price of $A11,900 (inlcuding GST, not including delivery or installation), the rebate would be $4,995. At the lower end of the scale a 5kWh battery would get a rebate of $1,850 of the ticket price.
Who can get the rebate?
The rebate is not means tested, so any household in any income bracket is eligible to access the SRES for a discounted battery, but only once per household.
And while it’s called the Cheaper Home Batteries Program, the rebate is open to businesses and community groups, too. In this case, the rebate can be claimed for up to a maximum of 50kWh – or a maximum discount of $18,500.
Importantly, the 50kWh discount can be claimed for systems with a total installed size of up to 100 kWh, so as not to restrict business to a battery that is too small.
Households and businesses that have already invested in a battery can also access the federal rebate, if they wish to add more storage capacity.
Another important note is that households and businesses that have invested in, but not yet installed, a battery can access the rebate, too – as long as they wait until July 01 to switch it on and connect up to the grid. In this case, the installer would need to be accredited with Solar Accreditation Australia and the battery CEC accredited and VPP compatible.
Off-grid homes are in!
Impressively, federal Labor’s proposed battery rebate would also be open to off-grid homes – despite the requirement for batteries installed through the scheme to have virtual power plant compatibility (more on that later).
As off-grid energy storage expert and one-time Solar Insiders podcast guest Nic Stone wrote on LinkedIn on Sunday, this is an important detail.
“For the first time, this style of rebate addresses the off grid sector of the market … [with] provision for subsidies up to 50kWh of usable storage in a system up to 100kWh usable in size,” Stone says.
“It’s a good time to build a decent Aussie made off grid storage and PV system, and a good time to ease that diesel gen set into a gentle retirement. … [And] welcome to the 21st Century of clean power generation and storage.”
What are the rules of the rebate?
As noted above, the Cheaper Home Batteries Program is not capped at a certain level of uptake and nor is it means tested, making it open to any household at any income level at a limit of one battery rebate per household.
Batteries must be installed alongside solar, however – either an existing system or a system installed at the same time. Households and businesses can not install a battery without solar.
On capacity, there is no minimum, but the maximum kWh limit for the rebate is 50 kWh (which can be accessed as part of a bigger 100 kWh system, as noted above).
A key requirement of the rebate is that the battery installed must be ready and able to participate in a virtual power plant, or VPP, which is a network of interconnected solar and battery systems that are aggregated by one entity – such as a retailer – and controlled collectively to offer paid services to the grid.
The batteries do not have to be connected to a VPP – and in the case of the off-grid homes, this would be impossible – but should be able to, in anticipation of the growing role VPPs are expected to play in the future.
Wait, what’s a VPP?
VPPs can sound off-putting to consumers who invested in a battery precisely to take better control over their power generation and demand.
But there are plenty of options around these days to meet different household needs and different demand profiles and varying levels of consumer buy-in. Most big and medium and even small, renewable energy focused retailers now have at least one VPP offering, and in some cases several.
The Australian Energy Market Operator is a fan of VPPs and will be happy that the federal government is requiring subsidised batteries to be VPP ready, after its December Draft 2025 Inputs, Assumptions and Scenarios Report (Draft 2025 IASR) lamented the “slower embrace” of home batteries and as the lower than expected consumer participation in VPPs.
“Compared to the 2023 Step Change scenario, while consumer investment in the energy transition remains strong… consumers are tentative to share control and coordinate the operation of their consumer energy devices through a third party such as their electricity retailer,” AEMO said at the time.
But the shape and pace of battery uptake and solar and storage integration is vital to planning for the energy transition because, as AEMO puts it, if “coordinated at scale and in a predictable and reliable manner,” it could significantly reduce the scale of network and other investments needed to firm renewables and maintain reliable and secure electricity supply.
It is generally believed that once consumers invest in batteries, including batteries on wheels in electric vehicles, they are much more likely to want to get all the value from them that they can, however they can, including through VPPs.
“The financial incentives don’t stack up for most households most of the time, and we need to make that work by having greater market participation,” says Gabrielle Kuiper, an expert on consumer energy resources (CER) and adviser to the National CER Roadmap.
“We need to make sure that all of these market design or redesign or review processes prioritise easy participation of aggregated, distributed energy resources, and that will provide the financial incentives [to participate in VPPs],” she says.
“In the UK, if you allow your battery to be used to provide to support the network, you can earn £331 per year for exporting from that battery when the grid the local distribution network is constrained.”
Can the federal rebate be applied alongside existing state rebates?
Yes – well, at least that’s the idea from the federal side of the equation.
Federal energy minister Chris Bowen has told industry he has given fair warning of the impending rebate to his state counterparts, in anticipation that they will do what they can to make the SRES battery rebate stackable with their own offerings.
At this stage, Western Australia, New South Wales and the Northern Territory have their own battery rebate policies in place, while Queensland, Victoria and Tasmania offer a mix of low and zero interest loans that support home battery uptake.
In Western Australia, the recently re-elected Cook government is offering rebates of up to $5,000 per household, or $7,500 for households on the regional Horizon Power grid, alongside no-interest loans.
In NSW, the Peak Demand Reduction Scheme means eligible households can get a discount of between $770 and $1,150 when they install a new 6.5 kWh battery, but the discount jumps to between $1,600 and $2,400 with a new 13.5 kWh battery. The discount goes up further if households sign up to a VPP.
The NSW is limited to 10 accredited suppliers, or Accredited Certificate Providers (ACPs), selected by the scheme administrator (IPART) to install new home batteries, while four ACPs can connect existing and new batteries to a VPP.
A broad range of batteries between 2-28kWh are eligible for the NSW scheme – around 90 per cent of the current market – having being accredited by the Clean Energy Council.
In the NT, eligible homeowners and businesses can access a grant of $400 per kilowatt-hour of useable battery system capacity, up to a maximum grant of $12,000.
Who wins – and are there any losers?
Obviously, some of the biggest winners of the rebate will be Australia’s four-million-and-counting solar households, particularly those in the mid-higher income brackets that have been contemplating getting battery storage but waiting for a clear sign from the universe that now is the right time.
According to energy department analysis, a household with existing rooftop solar could cut a further $1,100 from its annual power bill by adding a battery, while a home adding solar and a battery in one go could save as much as $2,300 a year – up to 90 per cent of a typical family electricity bill.
Renters, meanwhile, might be feeling left out, with no direct access to the promised energy bill savings. That said, the rebate is limited to one per household, and not one per person or family. So it is Renew Economy’s understanding that people with multiple properties can apply for batteries for each of those separate properties.
For the renters and low income households that are by no means guaranteed easy access to discounted battery storage, the news is not all bad, with the broader uptake of home batteries expected to help push down power prices for all.
This is because batteries will soak up excess rooftop solar during the middle of the day and shift it to the evening peaks, reducing demand, smoothing market volatility, and taking pressure off existing network and generation assets.
The resulting reduction in energy market volatility, exacerbated of late by poorly timed coal plant outages, and the reduced need to upgrade network infrastructure would in turn drive down the costs responsible for a large part of the retail energy bill that is paid by consumers.
The Smart Energy Council, which has long called for a national home battery rebate and has worked closely with the federal energy minister on the design of the Cheaper Home Batteries Program, says the rebate is expected to leave all consumers $1.3 billion better off in 2030 through reduced wholesale electricity costs.
“It’s important to understand that this policy will help reduce the power bills of everyone, not just those who can get solar and a battery,” Smart Energy Council (SEC) chief John Grimes said on Sunday.
“Less demand on the energy grid means fewer price peaks, a win win for all.”
For apartment dwellers, another segment of the community traditionally excluded from the benefits of consumer renewables, it’s unclear what the subsidy will mean.
While apartments have recently been brought into the solar picture with state government schemes to subsidise the installation of panel on shared rooftops, how you might add batteries to the equation will need to be nutted out, both logistically and in terms of the rebate’s design.
Farmers and industrial energy users might also feel a bit neglected by this policy, given its 50kWh (for 100kWh) ceiling – and given storage at the industrial scale is more likely to be at the hundreds of kilowatt-hour or even megawatt-hour level.
Speaking at the Solar & Storage Live conference in Brisbane last month, Farmers for Climate Action CEO Natalie Collard said support for batteries big enough to meet the needs of most agribusinesses was sorely needed.
“The size of an on-farm battery versus a residential solar [battery] doesn’t compare – it’s like on steroids, the battery size that you need, and the investment for that,” Collard said during a session on agrivoltaics.
“When you’re looking at a 10 year return on investment, the rebate needs to be at least 50% of that upfront cost – and given up front. So that’s one of the barriers at the moment to investor confidence.”
Is industry happy?
Rooftop solar and home battery retailers and installers will be another big winner of this policy announcement, with bodies like the SEC noting that federal Labor has been a “good listener” regarding the design of the scheme.
“The Smart Energy Council is pleased to see the government has listened closely to industry when preparing this policy, ensuring there is strong guidance from the get go about its design,” the SEC said in a statement on Sunday.
In particular, it appears that federal energy minister Chris Bowen and his team have worked really hard to avoid some of the pitfalls that have tripped up some of the state schemes and caused unintended pain to industry.
This includes the so-called valley of death that can crop up between the time a subsidy is announced and when it is introduced – a time when the market is brought to a screeching halt while consumers put all investment on hold until they can get access to a discount.
As SunWiz managing director Warwick Johnston explains here, a national battery rebate is also expected to drive the next wave of residential rooftop solar expansion, with the value in home solar no firmly based on self-consumption and VPP participation.
“The decline in residential solar volumes presents both a challenge and an opportunity for the solar industry,” Johnston says.
“While traditional small-scale residential sales have declined, small-commercial solar and battery storage represent the future growth drivers. Solar retailers who adapt their business models to these emerging trends will be best positioned for success in 2025 and beyond.”
What are the experts saying?
“Residential batteries are a no-brainer solution to put Australia’s abundant low-cost solar energy to work,” said Jay Gordon, an energy finance analyst with the Institute for Energy Economics and Financial Analysis (IEEFA).
“Residential batteries should be considered as part of a package deal with other cost-effective solutions to reduce energy bills. This includes supporting households to transition away from gas appliances, upgrading the efficiency of Australian homes, installing more rooftop solar and shifting key energy loads to the middle of the day.”
“This is exactly the policy support needed to immediately start providing Australian consumers enhanced support to access a lot more distributed energy resources,” says Tim Buckley from Climate Energy Finance.
“This leverages the existing grid transmission and distribution structure, this benefits all electricity consumers and can be deployed fast – in days, rather than decades, like nuclear!
“We trust this also includes batteries for apartments so everyone can benefit from the solar revolution.”
“More batteries means more resilience, bill savings, and fewer blackouts,” says SunWiz’s Johnston. “A battery subsidy that’s swiftly-implemented will enhance Australia’s utilisation of its greatest resource: the sun.”
“It’s expensive to install batteries. We get that. So this proposal from Labor is exactly the kind of action needed to get on top of rising power prices for good,” says Rewiring Australia founder Saul Griffith.
“We commend the Labor party for listening to the concerns of Australians who are sick of paying ridiculously high power bills. When we talk to communities, we know home batteries are something they are interested in but cost is always an obstacle.
“This is far better than a rebate or a proposal to cut the cost of filling up a petrol car,” Griffith says.
“This will put money back in our pockets, create more local jobs and ensure Australia isn’t affected by an incredibly volatile energy market and its overseas influences.”
