Federal Battery Rebate Changes: $7.2 Billion Expansion with New Rules for 2026
Major changes to the Cheaper Home Batteries Program will affect how Australians access battery rebates from May 2026
Key Takeaway for Our Customers
The federal government has massively expanded the battery rebate program to $7.2 billion, but new rules starting May 2026 will reduce rebates for larger batteries. If you're considering a battery system larger than 14kWh, acting before May 2026 will maximise your rebate.
How Is The Federal Battery Rebate Changing?
The federal government has earmarked an additional $4.9 billion for the Cheaper Home Batteries Program, while revamping it so incentives taper off for oversized home batteries that were rapidly depleting the scheme's budget.
The original $2.3 billion budget has been massively expanded to $7.2 billion over the next four years. The federal government expects this will see more than two million Australians install a battery by 2030 – double the number initially predicted.
This is anticipated to deliver 40 gigawatt hours of additional storage capacity to Australia's energy grid.
Important Changes Coming May 2026
- 1.Rebate will decline at a higher rate every six months, instead of the annual reduction initially planned
- 2.The value of the rebate will be significantly reduced for larger home battery systems under a new tiered system
- 3.All these changes will only apply to home batteries installed from the start of May 2026
Why Is The Scheme Being Revamped?
The federal battery rebate was on track to churn through its original allocated funding by mid-2026. The $2.3 billion budget was supposed to last across the four-year forward estimates period, but analysis found it was on track to run out in just one year.
The Department of Climate Change, Energy, the Environment and Water claims the incentive has been reworked to align with declining battery costs, with the aim of maintaining roughly a 30% discount for battery systems.
Federal government officials did not foresee just how many large batteries would be installed under the scheme. Battery sizes averaged about 28kWh since October – well up on last year's typical install size of 10–12 kWh.
"We want more Aussie households to have access to batteries that are good for bills and good for the grid – because it means more cheap, fast, safe solar energy is available in our homes night or day, when and where it's needed."
— Energy Minister Chris Bowen
Rebate Values: Current and Future
The Cheaper Home Batteries Program discount is provided through government purchases of Small-scale Technology Certificates (STCs). Subject to regulations being made, the STC factor will drop every six months instead of every year, and by a steeper amount.
Estimated Rebate Value Per kWh
| Period | Rebate per kWh | Status |
|---|---|---|
| Rest of 2025 | $372 | Current |
| Jan - April 2026 | $336 | Upcoming |
| May - Dec 2026 * | $272 | New Rules Apply |
| Jan - June 2027 | $228 | - |
| July - Dec 2027 | $208 | - |
| Jan - June 2028 | $184 | - |
| July - Dec 2028 | $164 | - |
| Jan - June 2029 | $144 | - |
| July - Dec 2029 | $124 | - |
| Jan - June 2030 | $104 | - |
| July - Dec 2030 | $84 | - |
New Tiered Rebate System for Larger Batteries
The main reason the rebate was being used up quickly was due to households installing much larger home batteries than expected – and in many cases larger than homeowners actually need.
To rein this in and encourage households to install more appropriately sized batteries, the rebate will only fully apply to smaller systems, and taper down for larger capacity batteries:
This change will also come into force from the start of May 2026, subject to regulations being made. Batteries up to 100 kWh nominal capacity are still eligible under the Program, but STCs will only be provided for the first 50 kWh of usable capacity.
Current Eligibility Requirements
Who Can Apply
- Homes, small businesses, and community facilities
- No means test – available regardless of income
- Rebates available per property (multiple properties eligible)
- The scheme is uncapped – no limit on number of subsidies available
Technical Requirements
- Battery systems must have usable capacity of 5 kWh to 50 kWh
- Must be connected to new or existing rooftop solar
- Installers must be accredited by Solar Accreditation Australia
- Batteries must be on the Clean Energy Council-approved product list
How to Claim the Rebate
Homeowners don't actually need to do anything to claim the rebate – installers will apply for it and deduct the value from the total system price. This makes the process seamless for customers.
Can You Stack State Rebates?
The federal government rebate was intended to be "stackable", meaning other battery rebates from states and territories could potentially be claimed alongside it. However, eligibility for other support will depend on criteria that applies in those individual schemes.
Industry Response
The Smart Energy Council noted that with changes not coming into place until May 2026, there was ample forewarning for industry and consumers. This ensures that installers and homeowners getting batteries in the next few months won't suddenly be copping a reduced rebate for jobs already booked in.
"We are a responsible industry that believes in spreading the benefits of solar and batteries to as many people as possible. If that means changes to the rebate we support that."
— John Grimes, Smart Energy Council Chief Executive
Act Now to Maximise Your Rebate
With rebates declining over time and the new tiered system starting May 2026, now is the best time to take advantage of the federal battery rebate. Contact Cosmic Renewable Energy for a free consultation and quote.