The government has announced a federal battery rebate that comes into effect on the 1st of July, although many eligible installations have already taken place. The battery rebate offers customers as discount based on the usable kWh capacity of the battery that is installed and equates to around $335 per kWh assuming a STC price of $36.
The government has been describing it as a 30% discount, which in the past has been roughly correct for a typical 10kWh battery.
However, with the latest modular and stackable battery technology, the marginal cost of increasing a batteries capacity is much lower. This is because additional battery modules can be added into the ‘stack’ like lego requiring only a few minutes from the installer and no additional components or wiring.
In fact, the marginal cost of additional battery modules will be lower than $335 per kWh for some of the cheaper battery brands on the market. This has led us to an outcome where a customer can install a big battery for less overall cost than a small battery.
I have been hearing reports of very large residential battery systems being installed exceeding the households energy consumption needs and the ability of the attached solar system to charge the battery. This led me to do some research on the dynamics of battery costs and understand why this is happening.
The below examples use 2 battery brands in the Australian market. Please note this article is not intended to rank or comment on these brands which have just been selected as an example. Please refer to our independent product reviews to research their quality.
Big Battery vs Small Battery – Sigenergy
| Cost to Install a 8kWh Sigenergy Battery | Additional Cost to Install a 48kWh Battery | |
| Labour | $1,500 | $0 |
| Electrical Wiring and Components | $300 | $0 |
| Battery BMS / Inverter | $3,000 | $0 |
| Floor stand | $220 | $0 |
| Back Up Gateway | $710 | $0 |
| Battery Module | $4,000 | ~$20,000 (5 x $4,000 per module) |
| Installer Profit Margin | $1,500 | ? |
| Federal Battery Rebate | -$2,680 | -$13,400 |
| Total | $8,550 | $6,600 (additional) |
Assumptions
- It takes negligible time/effort to install an extra battery module (if installer is already there)
- Installer doesn’t increase profit margin with larger battery
- Battery price breakdown estimated by Solar Choice’s vetted installers for single phase system
- Federal battery rebate estimated using Solar Choice’s federal rebate calculator
In this scenario, it only costs the homeowner $8,550 to get the first 8kWh of energy storage and an additional $6,600 to get a 48kWh battery that is 6x the size.
Big Battery vs Small Battery – ESY Sunhome
When we look at some of the cheaper battery brands on the market, this equation shifts so that the rebate exceeds the marginal cost as you increase the battery size.
| Cost to install a 5kWh ESY Sunhome battery | Additional cost to install a 30kWh battery (max) | |
| Labour | $1,500 | $0 |
| Electrical Wiring and Components | $300 | $0 |
| Battery BMS / Inverter | $2,000 | $0 |
| Back Up Gateway | Built-in (EPS only) | $0 |
| Consumption Meter | $300 | $0 |
| Battery Module | $1,500 | ~$7,500 (5 x ~$1,500) |
| Installer Profit Margin | $1,500 | ? |
| Federal Battery Rebate | -$1,675 | -$8,576 |
| Total | $5,425 | –$1,076 (additional) |
*Same assumptions as table above
With cheaper battery brands the federal battery rebate will be greater than the wholesale cost of additional modules. This means as you increase the battery capacity, the final cost to the customer will decrease!
Noting that ESY Sunhome was selected to illustrate this pricing dynamic, there are other brands where the wholesale net cost will get cheaper as battery capacity increases.
Should homeowners get a big battery, if they don’t need one?
One thing to point out about batteries is that as the battery capacity increases, the utilisation of the battery decreases. This is illustrated in our battery payback and sizing calculator. The battery utilisation refers to the ability of the paired solar system to fully charge the battery on a daily basis.
Historically our recommendation has been to keep the battery utilisation high (around 80%) to ensure you’re not paying a lot of much to have an expensive battery sit there unutilised. Many of the batteries that I’ve heard stories of (e.g. 30kWh battery with a 6kW solar system) will sit there dormant through the winter months where solar production is low. As a solar battery is designed to cycle regularly, long periods of dormancy may impact the longevity of the battery.
If homeowners don’t have enough solar to consistently charge their battery, then there might be some other ways to make money. There are new energy plans then enable homeowners to participate in the market through a VPP or a wholesale pass through electricity plan like Amber Energy or Flow Power. Although the revenue you can generate is difficult to estimate, and not guaranteed to last into the future if battery storage is adopted by the masses.
Limitations Of This Analysis
Now it should be noted that the indicative prices referenced above will change for a variety of factors across Australia, including extra install requirements like bollards, shading enclosures or 3 phase systems.
Additionally its probably fair to say that many installers will choose to increase the size of their profit margin as the battery size increases (although there’s really no significant additional costs).
What does this mean for the Australian battery market?
We’re already seeing the evidence of Australian homeowners ‘going big’ to take advantage of the rebate. In many cases the battery capacity will far exceed the electricity consumption requirements.
The fact the homeowners only have one chance to claim the federal battery rebate for their property provides an additional incentive to oversize the battery to avoid a more costly expansion in the future.
The government’s intended ‘30% discount’ is likely to cover a much larger proportion of the battery costs as many homeowners will install a larger battery size. Over time as new batteries are designed and brought to the Australian market, it seems that the foundations are set for a ‘free battery upgrade’ to hit the market.
Our hope is that customers continue to do the right research on battery brands, and are not attracted to very large battery solutions with untested brands that offer lower quality products. We encourage you to do your research and check out our solar battery reviews.
- Why a big battery could be cheaper than a small battery with the federal rebate? - 19 June, 2025
- Heat Pump Costs – Solar Choice Price Index - 1 June, 2025
- Solar Panel Costs: Solar Choice Price Index | July 2025 - 1 June, 2025
The chart in the original version of this article does a good job of communicating the main point that some are missing when reading the tables in the OneStepOffTheGrid version. Despite the second column being labeled “additional cost” the bottom cell “total” isn’t really additional at all, it is just the total. So in the case of ESY the actual additional cost for going big is negative.
I think that perhaps there are some issues with the details of your calculation, e.g. I think the federal rebate is calculated based on the usable capacity, not the nominal capacity. Also 5*1500=7500, not 6000.
I did a similar calculation myself, however it seems that many installers have moved their prices up after the Federal rebate was announced, then haven’t moved back down again after the NSW one was withdrawn.
Is there a good source for information on wholesale prices of battery components? Solarchoice have for years been the best source for residential PV price information, but the “battery price index” is a blended average of installed costs, not that useful for this sort of granular analysis.
Hi James,
Thanks for your feedback and we picked up that mislabeling of the tables as well.
That’s also a good pick up on the usable kWh and miscalculation, a bit embarassing. We’ve corrected that now too.
Unfortunately wholesales costs of products are in the public domain. We estimated those figures through trusted partners, but the article is meant to describe the cost trajectory as batteries scale. Our intention is not to reveal particular brands exact costs, there are many other brands that sit lower and higher than each option in this article.
We are also working on an improvement to the Solar Choice Battery Index as well!
Regards,
Jeff