The Cheaper Home Batteries Program is the federal government’s discount on home and small business battery storage, and it has changed a fair bit since it launched on 1 July 2025. From 1 May 2026 the discount became tiered by battery size, and it now steps down every six months. If you’re weighing up a battery for your solar system, this guide explains how the program works today, who is eligible, roughly what the discount is worth, and why timing your installation matters.
What Is the Cheaper Home Batteries Program?
The Cheaper Home Batteries Program is an Australian Government initiative that cuts the upfront cost of installing a battery alongside rooftop solar. The government describes the discount as around 30% of the upfront cost of installing a solar battery, and the program is scheduled to run until 31 December 2030.
It isn’t a cash rebate you apply for after the fact. Instead, it works through the Small-scale Renewable Energy Scheme (SRES), the same scheme that has long reduced the price of rooftop solar panels. Eligible batteries create small-scale technology certificates (STCs), and those certificates have a market value.
How the discount reaches you
In most cases you never handle the certificates yourself. You assign your right to create the STCs to your installer or a registered agent, and they take the value off your quote as an upfront discount. According to the Clean Energy Regulator, you can also choose to create and sell the STCs yourself, but most households take the point-of-sale discount because it is simpler.
What Changed in the Cheaper Home Batteries Program From 1 May 2026
Under the original rules, the number of STCs grew in a straight line with battery size, which pushed many buyers towards very large systems and used up the initial budget faster than expected. The government amended the Renewable Energy (Electricity) Regulations so that the discount now tapers as capacity increases. The Clean Energy Regulator says the aim is to keep the discount appropriate for small, medium and large systems.
The new capacity tiers
STCs are calculated on the battery’s usable capacity, and only the first 50 kWh counts. From 1 May 2026 the STC factor applies in three bands:
- 0 to 14 kWh: 100% of the STC factor
- Over 14 kWh up to 28 kWh: 60% of the STC factor
- Over 28 kWh up to 50 kWh: 15% of the STC factor
In practice, the first 14 kWh earns the full discount, while each extra kilowatt-hour beyond that earns progressively less. A battery can still be as large as 100 kWh nominal and remain eligible, but capacity above 50 kWh usable doesn’t earn any additional certificates.
The STC factor now falls every six months
The “STC factor” is the number of certificates created per kilowatt-hour. It drops every six months to reflect falling battery prices. The Clean Energy Regulator’s published schedule is:
| Installation period | STCs per kWh (factor) |
|---|---|
| January – April 2026 | 8.4 |
| May – December 2026 | 6.8 |
| January – June 2027 | 5.7 |
| July – December 2027 | 5.2 |
| January – June 2028 | 4.6 |
| July – December 2028 | 4.1 |
| January – June 2029 | 3.6 |
| July – December 2029 | 3.1 |
| January – June 2030 | 2.6 |
| July – December 2030 | 2.1 |
The key date for anyone planning a battery right now is 1 January 2027, when the factor drops from 6.8 to 5.7. That’s a reduction of roughly 16% in the number of certificates for the same battery.
How Much Is the Battery Discount Worth?
The dollar value depends on two things: how many STCs your battery creates and what each STC is worth when it’s traded. STC prices move with the market and the price your installer offers can vary, so treat the figures below as illustrations rather than quotes. They assume an STC value of about $40, the same assumption used in ABC News reporting on the changes, and installation between May and December 2026.
| Usable battery capacity | Approx. STCs (May–Dec 2026) | Indicative discount at ~$40/STC |
|---|---|---|
| 10 kWh | ~68 | ~$2,700 |
| 14 kWh | ~95 | ~$3,800 |
| 20 kWh | ~119 | ~$4,800 |
| 28 kWh | ~152 | ~$6,100 |
| 40 kWh | ~164 | ~$6,600 |
Two things stand out. First, going from 28 kWh to 40 kWh adds a lot of hardware cost but very little extra discount. Second, the same 10 kWh battery installed in January 2027 would create about 57 STCs instead of 68, so the discount shrinks by around $440 at the same STC price.
Who Is Eligible for the Cheaper Home Batteries Program?
The program is open to households, small businesses and community organisations. According to the Clean Energy Regulator and business.gov.au, a battery must meet all of the following to qualify:
- Installed with solar: the battery must be connected to a new or existing rooftop solar PV system. A battery on its own, without solar, isn’t eligible.
- Right size: nominal capacity must be between 5 kWh and 100 kWh.
- New equipment: used or relocated batteries don’t qualify, and the battery must not have been commissioned before 1 July 2025.
- Approved product: the battery and its components must be on the Clean Energy Council’s approved list.
- VPP capable: the battery inverter must be able to join a virtual power plant. You aren’t forced to join one, but the hardware must support it.
- Accredited installer: the installation must be carried out by a Solar Accreditation Australia (SAA) accredited installer and meet AS/NZS 5139:2019, the Australian standard for battery installations.
- One per premises: only one battery system per property can receive STCs, and it must stay installed until after 2030 or the end of its warranty, whichever is later.
Already have a battery? Adding capacity
Extra capacity added to an existing battery can be eligible, but only if the existing battery hasn’t already received a discount under the program, the added capacity is at least 5 kWh, and the upgraded system stays at or under 100 kWh in total. If your current battery was installed under the program, a later expansion won’t attract a second discount.
Off-grid and remote properties
Off-grid batteries more than 1 km from the grid still need to be on the approved list but don’t need to be VPP capable. Different evidence rules apply to sites closer to the grid, so it’s worth discussing your situation with your installer before you buy.
Can You Combine It With State Incentives?
Some states and territories run their own battery or virtual power plant incentives, and in some cases these can be combined with the federal discount. The rules, amounts and availability differ by state and change regularly, so check your state energy department’s website or ask us for the current position where you live before you sign a contract.
How to Get the Most From the Program
- Size for your evening use, not the maximum. With the tiered discount, a battery that matches your overnight consumption usually gives better value than the biggest system on offer. Our guide on how to size a home battery walks through the maths.
- Check usable, not nominal, capacity. The discount is based on usable capacity, so compare quotes on the same basis.
- Watch the 1 January 2027 step-down. If you’re ready to go, an installation completed before the end of December 2026 uses the higher 6.8 factor.
- Confirm the discount is shown on your quote. A good quote states the number of STCs, the price per STC and the total discount clearly.
- Think about a VPP. Your battery must be VPP capable, so it’s worth comparing whether joining a virtual power plant suits your household.
- Look at your switchboard and solar first. Older switchboards or undersized solar can limit what a battery can do, and fixing these during the same visit is often cheaper. See our switchboard upgrade guide for the warning signs.
Cheaper Home Batteries Program FAQs
Do I need solar panels to get the battery discount?
Yes. The battery must be installed with a new or existing rooftop solar system. You can install solar and a battery together and still qualify.
Do I have to join a virtual power plant?
No. The battery inverter must be capable of joining a VPP, but signing up to one is your choice.
Is the discount the same for every installer?
The number of STCs for a given battery is set by the regulations, but the price each installer or agent pays per STC can differ, so the dollar discount on two quotes may not be identical.
When does the program end?
The program is scheduled to run until 31 December 2030, with the discount reducing every six months until then.
Can businesses use the program?
Yes. Small businesses and community organisations can access the discount as long as the battery and installation meet the same eligibility rules.
Get a Battery Quote From Sunloop Energy
Sunloop Energy designs and installs home and business batteries that are eligible for the Cheaper Home Batteries Program, working with new and existing solar systems. We’ll look at your energy use, recommend a battery size that makes sense under the new tiers, and show the STC discount clearly on your quote. With the discount stepping down on 1 January 2027, now is a good time to get the numbers for your property. Request a free quote from Sunloop Energy today.
