Program Update: Major Expansion Confirmed
On 13 December 2025, the Australian Government announced a significant expansion of the Cheaper Home Batteries Program, increasing total funding from the original $2.3 billion to an estimated $7.2 billion over the next four years.
This expansion reflects the pace at which Australians have taken up battery storage since the program’s launch. Based on current projections, the increased funding is expected to support more than 2 million battery installations by 2030, delivering approximately 40 gigawatt hours of additional distributed storage capacity into the national electricity system.
Alongside the funding increase, the government confirmed proposed program adjustments to ensure the discount remains appropriate for small, medium, and larger battery systems as the market continues to mature. Subject to regulations being made, two adjustments to the discount framework will come into effect from 1 May 2026, designed to keep support sustainable over the life of the program.
For the most up-to-date information on program settings, eligibility changes, and industry updates, households and businesses can refer directly to the Australian Government’s official Cheaper Home Batteries
Australia’s battery market didn’t change overnight — it reached a tipping point.
When the Cheaper Home Batteries Program was first introduced, strong interest was expected. What followed, however, was uptake at a pace few anticipated. From a specialist perspective, this wasn’t driven by hype or short term incentives. It was the result of years of pent-up demand, rising electricity costs, and a solar market that had already matured, waiting for the right policy framework to unlock battery storage at scale.
This article explores why uptake accelerated so quickly, how the market has evolved, how incentives are changing, and what the program looks like as it moves toward 2026 and beyond.
A Battery Market Years in the Making
Australia leads the world in rooftop solar adoption. Millions of households already generate more electricity than they use during the day, yet without batteries, much of that energy has traditionally been exported back to the grid at declining feed-in tariffs.
From inside the industry, the barrier to battery adoption was never technical performance. It came down to economics, confidence, and timing.
For years, homeowners were asking the same question: “When does a battery actually make sense?”
The answer depended on four things:
- Upfront cost
- Policy certainty
- Product maturity and safety
- Confidence in long-term performance and support
The Cheaper Home Batteries Program addressed all four at once, which is why the response was immediate.
Why Uptake Accelerated So Quickly
The Incentive Reached the Tipping Point.
By reducing the upfront cost of eligible battery systems by around 30%, the program shifted many installations from “nice to have” to financially viable.
From a specialist viewpoint, the discount didn’t need to make batteries cheap — it needed to make them commercially rational. Once payback periods shortened and risk was reduced, many households that had been waiting finally moved forward.
The Industry Was Tested, Not Fully Ready
Unlike earlier energy incentives, the battery sector had mature technology and clear regulatory frameworks in place when the program launched, but the scale and speed of uptake tested the industry immediately.
While battery performance and safety standards were well established, the market experienced:
- Product supply constraints as demand outpaced availability
- Longer lead times for some approved battery models
- Installation bottlenecks driven by a shortage of accredited installers
In short, the industry was technically prepared, but not scaled for the velocity of demand that followed.
Why Early Constraints Matter
These early pressures confirmed that demand was genuine, not speculative.
They also highlighted why program settings, safety frameworks, and phased adjustments — including STC Factor changes and the May 2026 updates — are critical. Together, they help manage adoption responsibly while protecting consumers and maintaining installation quality.
How the Cheaper Home Batteries Program Works
The program provides support for new battery installations between 5 kWh and 100 kWh, connected to either new or existing rooftop solar systems.
From a technical and compliance perspective:
- Systems must be installed by accredited professionals
- Batteries must meet approved safety and performance standards
- Most systems must be Virtual Power Plant (VPP) capable, even if participation is optional
In most cases, households don’t apply directly. The discount is typically applied upfront by the installer or delivered through the Small-scale Technology Certificate (STC) framework.
How Support Is Adjusted by Battery Size
While the program continues to support battery systems up to 100 kWh, the way STCs are calculated now reflects system size more closely.
The STC Factor tapers by capacity:
- 0–14 kWh: 100% of the STC Factor
- Above 14–28 kWh: 60% of the STC Factor
- Above 28–50 kWh: 15% of the STC Factor
This structure maintains an approximate 30% discount across a wide range of battery sizes while encouraging systems that are appropriately sized to actual energy use.
How STCs Are Changing Over Time
The Cheaper Home Batteries discount is delivered through the creation and trading of Small-scale Technology Certificates (STCs). Rather than a cash rebate, the government funds the discount by purchasing the equivalent number of STCs created for eligible battery systems.
Importantly, the STC Factor applied is determined by the installation date. A forward schedule has been released showing how the STC Factor will taper through to 2030, providing transparency and predictability for households considering installation and confirming that support reduces gradually, not suddenly.
Why Changes Are Being Introduced From May 2026
Subject to regulations being made, adjustments to the discount framework will come into effect from 1 May 2026.
These changes are designed to:
- Align incentives with falling battery costs
- Ensure funding can support installations through to 2030
- Avoid boom-and-bust cycles seen in earlier rebate programs
Rather than signalling reduced support, these changes reflect a maturing market.
Expanding the SRES to Include Batteries
The program is delivered by expanding the Small-scale Renewable Energy Scheme (SRES) to include eligible battery systems.
The SRES has underpinned Australia’s rooftop solar success for years and provides a strong, legislated framework for safety, compliance, and consumer protection. Batteries under the program are subject to the same safeguards, including accredited products, trained installers, and ongoing inspections.
What This Means for Households
Battery systems are long-life infrastructure assets, not short-term purchases.
The strongest outcomes come from:
- Correct system sizing
- Quality installation and commissioning
- Realistic expectations around savings.
- Ongoing monitoring and support.
While incentives reduce upfront cost, system design ultimately determines long-term value.
Additional Program Clarification (CER – December 2025)
The CER reiterated that the program will continue to be delivered through the SRES, with battery systems treated consistently with existing solar compliance and safety frameworks. This includes accredited products, qualified installers, and ongoing regulatory oversight.
The update confirmed that changes proposed from 1 May 2026 are intended to fine-tune how support is calculated as battery costs continue to fall, ensuring the program remains financially sustainable through to 2030. Importantly, these changes are designed to maintain an appropriate level of upfront discount across different battery sizes, rather than reduce support abruptly.
System eligibility settings, installation standards, and consumer protections remain central to the program, reinforcing that battery safety, correct system design, and quality installation are non-negotiable as uptake continues to accelerate.
For further regulatory detail, the Clean Energy Regulator has published additional guidance on upcoming program changes and implementation timing. Changes to the Cheaper Home Batteries Program
Final Thoughts
The Cheaper Home Batteries Program didn’t create demand — it unlocked demand that had been building for years.
With expanded funding, a transparent STC taper, and strong governance in place, battery storage has moved decisively into the mainstream of Australia’s energy system. As the program evolves toward 2026, the focus shifts from chasing incentives to making smart, future-ready energy decisions.
Frequently Asked Questions
What happens if my installation is delayed and STC values change?
The STC Factor applied is based on the date your battery is installed and commissioned, not when you sign a contract. If installation is delayed and the STC Factor declines, this can affect the size of your discount.
This is why realistic timelines and clear communication with your installer are important.
Why was the program expanded to $7.2 billion?
Why was the program expanded to $7.2 billion? On 13 December 2025, the government increased program funding from $2.3 billion to $7.2 billion due to strong demand.
The expanded funding is expected to support:
Over 2 million battery installations by 2030.
- Around 40 gigawatt hours of additional distributed storage capacity.
This confirms battery storage is now a core part of Australia’s energy transition.
Can this program be combined with other rebates or incentives?
The Cheaper Home Batteries Program is a national scheme and is designed to complement other incentives.
Depending on your location, you may also be eligible for:
- State or territory battery incentives
- Local energy programs
- Discounted finance through the Household Energy Upgrades Fund (HEUF)
Compatibility depends on state and territory rules, so specialist advice is recommended.
What changes are coming from 1 May 2026?
Subject to regulations being made, changes from 1 May 2026 include:
- More frequent reductions to the STC Factor (every six months)
- A higher overall rate of decline in STC values.
These changes are designed to align incentives with falling battery costs and ensure funding lasts through to 2030.
How does battery size affect the discount?
The program supports batteries up to 100 kWh, but the STC entitlement tapers by size:
- 0–14 kWh: 100% of the STC Factor
- Above 14–28 kWh: 60% of the STC Factor
- Above 28–50 kWh: 15% of the STC Factor
This approach helps maintain an average discount of around 30% across different battery sizes while encouraging right-sized systems.