On December 13, the Australian Government announced significant changes to the Cheaper Home Batteries Program—an update that marks a major step forward for Australia’s clean energy transition. For households, businesses, and the renewable energy sector alike, the announcement confirms a substantial expansion of the program alongside targeted adjustments designed to ensure its long-term effectiveness.
Australia is already a global leader in rooftop solar, with more than 4.2 million rooftop solar PV systems installed nationwide. Until recently, however, battery adoption lagged behind, with only one in 40 households pairing batteries with their solar systems. Since the introduction of the Cheaper Home Batteries Program, that figure has improved to one in 24 households—demonstrating growing confidence in battery storage as a practical and affordable solution.
The program has played a key role in accelerating this uptake by providing a government-funded discount of around 30 per cent on the upfront cost of installing small-scale battery systems ranging from 5 kWh to 100 kWh. Importantly, this discount applies to both new and existing solar PV systems, with no additional costs passed on to consumers.
Program Expansion
The December 13 announcement confirmed that the Cheaper Home Batteries Program has been expanded from $2.3 billion to $7.2 billion over a four-year period. This expansion is expected to support more than 2 million Australians in installing batteries by 2030, delivering approximately 40 gigawatt hours of additional storage capacity to the national electricity system.
This scale of investment reinforces the government’s commitment to making energy storage more accessible, reducing household electricity bills, lowering peak demand across the grid, and improving overall energy reliability for all consumers.
Understanding the Key Adjustments from May 1, 2026
While the expanded funding strengthens the program, two important adjustments will take effect from May 1, 2026. These changes relate to how support is calculated and distributed.
1. Changes to the STC Factor
The program is administered by the Clean Energy Regulator and uses Small-scale Technology Certificates (STCs) to calculate the battery discount. In simple terms, the STC Factor determines how much support a battery system is eligible for, based on its usable capacity—the amount of energy that can actually be drawn from the battery in normal use.
From May 2026, the STC Factor will undergo changes, reducing more frequently from an annual schedule to a six-month schedule, and at a higher rate. This adjustment reflects decreasing technology costs while still providing significant incentives for early adopters. Source: DCCEEW STC Factor Reduction/Transition Table 1 Reference, December 13, 2025.
2. Capacity-Based Support Tiers
Support will also be tiered based on battery size:
-
0–14 kWh: eligible for 100% of the STC Factor
-
14–28 kWh: eligible for 60% of the STC Factor
-
28–50 kWh: eligible for 15% of the STC Factor
This structure is designed to ensure incentives remain focused on the battery sizes most commonly used by households and small businesses.
Why the Program Still Matters
Despite these adjustments, the program continues to deliver an average discount of around 30 per cent across battery sizes. The benefits extend beyond individual households—widespread battery adoption helps reduce peak demand, lowers costs for all electricity users, and contributes to a more stable and resilient grid.
Learn More
This update provides an overview, but detailed technical guidance and practical implications are available through industry specialists. For comprehensive information, stakeholders are encouraged to consult the latest publications from Perth Solar Warehouse and PSW Energy, which provide in-depth explanations of the changes and their implications for consumers and installers alike.
McKercher Corporation remains committed to keeping stakeholders informed as Australia’s clean energy landscape continues to evolve.
