Status: The Australian Government says these are intended changes to the Cheaper Home Batteries Program that are subject to regulations being made and are proposed to start 1 May 2026.
The Federal Battery Rebate launched in July 2025 has triggered a mass uptake in home batteries, with installations increasing from last year’s average of around 200 installations per day to over 1,500 installations per day. In addition to the number of installations increasing, the average battery size being installed by homeowners has doubled. This is in part due to the rebate cost dynamics we called out before the scheme began on why a big battery could be cheaper than a small battery under the federal rebate.
As a result the government has decided to make some changes to the way the rebate reduces over time and as battery sizes increase, along with adding $4.9bn to the budget. The intent is to increase the sustainability of the scheme and ensure it lasts til the initially intended target of 2030.
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Quick Summary of The Changes
The Australian Government has announced intended changes to the federal government’s home solar battery rebate that are subject to regulations being made, and are proposed to start on 1 May 2026.:
- Increase program funding from the original estimate of $2.3 billion to $7.2 billion over the next four years.
- Make two proposed adjustments to how the discount is calculated, aiming to keep the discount at around 30% across a range of battery sizes while aligning with falling battery costs over time:
- Change #1: The rebate amount declines faster and more frequently (every 6 months instead of annually).
- Change #2: The rebate factor tapers by battery size (full support for typical household sizes; reduced support for larger systems).
The Government says the expanded funding is expected to support more than 2 million battery installations by 2030, delivering around 40 gigawatt hours (GWh) of additional storage capacity.
Key Takeaway – If you want to install a battery greater than 14kWh in capacity, then you’ll receive a larger rebate if you can get it installed before 1 May 2026. After this date, the rebate for larger batteries will decrease significantly.
Table of contents
What’s not changing
The Government update indicates these settings remain in place:
- The program continues to deliver a discount via Small-scale Technology Certificates (STCs) under the Small-scale Renewable Energy Scheme (SRES).
- The program continues to support battery systems up to 100 kWh (subject to eligibility rules).
- Batteries can be connected to new or existing solar PV.
- Consumers generally do not apply directly to the Government or the Clean Energy Regulator (CER) to receive the discount.
- The discount continues to be based on usable battery capacity and the number of STCs the battery is eligible for.
If you want background on how STCs work in practice, see our overview of solar batteries and our guide on battery pricing.
Key dates
- Now → 30 April 2026: current calculation settings apply.
- From 1 May 2026 (proposed): the new, faster step-down STC factors and the new size-based tapering begin.
- From 2027 onwards (proposed): STC factors step down every January and July until 2030.
Proposed change #1: STC factor declines faster (every 6 months)
Now from 1 May 2026, the Government proposes the STC factor will decline every six months and at a higher rate than previously planned. It’s important to remember that the rebate is determined by the installation date.
STC factor schedule (existing vs proposed)
| Year | Period | Existing STC factor | Proposed STC factor |
| 2026 | Jan–Apr | 8.4 | 8.4 |
| 2026 | May–Dec | 8.4 | 6.8 |
| 2027 | Jan–Jun | 7.4 | 5.7 |
| 2027 | Jul–Dec | 7.4 | 5.2 |
| 2028 | Jan–Jun | 6.5 | 4.6 |
| 2028 | Jul–Dec | 6.5 | 4.1 |
| 2029 | Jan–Jun | 5.6 | 3.6 |
| 2029 | Jul–Dec | 5.6 | 3.1 |
| 2030 | Jan–Jun | 4.7 | 2.6 |
| 2030 | Jul–Dec | 4.7 | 2.1 |
Proposed change #2: STC factor tapers by battery size
From 1 May 2026, the Government proposes the STC factor will be reduced for larger batteries (still within the program’s supported range), by applying different percentages to different capacity bands.
Size bands (usable kWh) and how the STC factor is applied
| Usable battery capacity band | How the STC factor is applied (proposed from 1 May 2026) |
| 0–14 kWh (inclusive) | 100% of the STC factor |
| >14–28 kWh (inclusive) | 60% of the STC factor |
| >28–50 kWh (inclusive) | 15% of the STC factor |
What this means: the rebate per kWh is strongest for the first 14 kWh, then reduces for each additional kWh beyond that.
The Government points consumers to the “Summary of Revised Small-scale Technology Certificate Entitlement to 2030” to understand how many STCs are created per 1 kWh under the revised rules.
Example of how the changes will work
Our example uses the proposed May–Dec 2026 STC factor of 6.8 to make the tapering easy to understand.
| Battery Size | Jan – April 2026 Rebate | May Onwards Rebate | Reduction |
| 10kWh | $3,192 | $2,584 | -$608 |
| 25kWh | $7,980 | $5,323 | -$2,657 |
| 50kWh | $15,960 | $6,641 | -$9,319 |
* Assumes a typical STC price of $38 per certificate
Technically speaking this looks like:
- First 14 kWh: 6.8 STCs per kWh (100%)
- Next 14 kWh (14–28): 6.8 × 60% = 4.08 STCs per kWh
- Next 22 kWh (28–50): 6.8 × 15% = 1.02 STCs per kWh
If you want to know the best size for my home approach (rather than “how big can I go”), then try our free battery payback calculator.
Why the Government says it’s changing the program
The Government says the proposed adjustments are intended to:
- keep the discount at around 30% across battery sizes,
- align support levels with declining battery costs, and
- support battery installations through to 2030.
The Government describes them as intended changes that are subject to regulations being made. The proposed start date is 1 May 2026.
Yes. The Government states the discount you’re entitled to is determined by the STC factor on the date the battery is installed.
The program continues to support installations up to 100 kWh, but the Government proposes that the level of support will taper for the portion of usable capacity above 14 kWh, and again above 28 kWh (up to 50 kWh).
The discount depends on:
– the STC factor at the time of installation,
– the eligible usable kWh, and
– the STC price (which can vary).
For estimating outcomes in your own scenario, use our battery payback calculator and sizing tools listed above.
Compare solar and battery quotes from local installers now.
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