Australia’s Cheaper Home Batteries Program (CHBP) is going gangbusters. So much so, updated SolarQuotes analysis suggests the subsidy party could be over *much* sooner rather than later without intervention. But there’s good news.
How Much Funding Does The Battery Rebate Have?
The Cheaper Home Batteries Program was originally launched with a commitment to $2.3 billion in funding. The program is supported through the federal government purchasing Small-Scale Technology Certificates (STCs) — on which the subsidy is based — to finance the rebates.
How Many Batteries Have Been Installed?
Federal Minister for Climate Change and Energy Chris Bowen provided an update yesterday on installation numbers when delivering a speech to COP30 in Belem, Brazil.
“… over 125,000 households have now installed batteries since 1 July, thanks to our Cheaper Home Batteries program,” Bowen said. “That’s 1000 households each and every day installing a battery.”
Well, very close to it anyway. But back on November 1, the Minister put the tally at just over 108,000; so the rate over the last couple of weeks would be around 1,000 a day.
While the Clean Energy Regulator’s figures only show 90,546 systems, that’s for installations that are done, dusted and STCs have been issued up until 31 October. It doesn’t include installed systems with STCs still pending — which I assume Minister Bowen is factoring in.
Minister Bowen promoting Labor’s Cheaper Home Batteries program earlier this year.
How Long Will The Battery Rebate Last?
According to updated analysis carried out by SolarQuotes’ resident fact-checker, Ronald Brakels:
“Using the 90,546 installs in the first 4 months costing ~$678 million, then the scheme will last a total of 13.6 months and end some time around the middle of August next year. This assumes all the $2.3 billion goes in rebates and there are no administration or other costs.”
But Bowen’s 125,000+ installs so far is 21% higher.
“Using his figure, with the same assumption that the money all goes to rebates, the scheme will last a total of 11.2 months and end in early June next year.
If installations next year average 20% higher than they have so far, which definitely seems possible, then the first $2.3 billion will run out after a little more than 10 months and will be gone sometime in May.”
In the very early days of the scheme before it became apparent just how popular it would be, Ronald’s initial number-crunching found the CHBP could run out of money by early 2028 — still well before the program’s planned 2030 end date — unless adjustments were made.
But in addition to the tsunami of installations that followed, something else that’s also happened is average useable capacity of batteries is increasing, and the level of rebate is pegged to useable battery capacity.
Ronald’s original calculations were based on an average 17 kWh useable capacity per system, which was already higher than the average pre-rebate. But based on recent data from the Clean Energy Regulator, average capacity over the short life of the program so far is 20 kWh; and likely still increasing.
Changes to the program are now looking far more urgent in order to sustain it.
What Changes Can Be Made To Extend It?
Well, more funding for one – and that’s quite possible. Smart Energy Council CEO John Grimes recently stated:
“The good news is that this program is uncapped. That means $2.3 billion is the first payment, not the last payment.”
But let’s say it is, or the program needs to be reined in further beyond the already scheduled annual rebate reduction.
Ronald says:
“One way to stretch out the federal battery rebate is to reduce the battery capacity that receives STCs. The number could be cut in half from 50 to 25kWh, while doing little harm to typical households. But the maximum that can be installed should be kept at 100kWh, since we don’t want to discourage people from installing more if they want.
But there are advantages to people installing large 40-50 kWh home batteries. These big batteries can keep homes powered through long periods of bad weather without any need to draw on grid power at a time when the grid may be under stress.”
Treading Carefully
Ronald warns too much tinkering with the CHBP could have negative results.
“Making the scheme more complex to try to encourage the installation of perfect battery systems can do more harm than good,” he says. “Done poorly, it could increase the number of ways the rules could be abused. We may get better results just by requiring installers to inform homeowners of drawbacks of doing things such as installing a huge battery capacity with a small inverter.”
Don’t Panic!
While Ronald’s updated analysis may trigger some potential battery buyers to get a wriggle on; it’s a significant purchase that shouldn’t be rushed into. It’s not just your cash at risk, but also the safety of your household — and it’s an acquisition you’ll be living with for a long time for better or for worse; so ensure it’s the former.
At this point, it’s unlikely you’ll be able to get a system installed over the next couple of months anyway as installers are flat out. It’s an opportunity learn everything you need to know about choosing the right home battery (and installer). And to stay up to date with what’s happening, subscribe to the SolarQuotes weekly newsletter.
About Michael Bloch
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I found that the economics is now driven by expensive inverter + cheap cells = scale up capacity with a modular battery.
So I went 48kWh and 15kW as that was the best deployment of retirement capital and lowest LCOS. Spare capacity galore to soak up those grid-melting moments!
But if it is driven by politics, i.e. how many votes can be bought with $$ rather than how much capacity goes to the support the market, then smaller batteries would be the order of the day.
Let’s see what they do.
Thanks for the alarm bells on the CHBP “running out”- but let’s pump the brakes. The scheme isn’t a one-and-done federal piggy bank; it’s built to roll over like solar PV’s STC model, where a tiny levy on grid electricity (passed to retailers then in-turn consumers) keeps the certificates flowing indefinitely. No cliff-edge exhaustion here, just a seamless handoff from general revenue kickstart to consumer-funded sustainability.
That $2.3B is the booster rocket and is great for now, but if demand stays hot (and it is, with 125k+ installs already), expect tweaks: maybe the government will cap subsidies at 25kWh (or worse, 15kWh) to stretch it, with tapered rebates above. Mid-2026 top-up? Likely, per Bowen’s hints.
Better idea: Mandate solar minimums for rebates—6.6kW panels for ≤20kWh batteries, scaling to minimum 13.3kW + 10kW inverter for bigger ones (grid-approved). Maximizes self-use, eases grid strain, and turns “running out” into “ramping up.” Who’s with me?
Michael’s article makes it clear that the scheme could indeed be topped up and adjusted to reduce the cap on battery sizes. But the $2.3bn was envisioned to cover the forward estimates period through to mid-2029, so we’re clearly going to exhaust that funding pool much earlier than planned.
Mathew,
My sense is that the initial program aim is to absorb excess midday generation, already on the grid, not exacerbate that problem. If we have done that with the 125,000 batteries, then stage 2 would be your plan, I figure. (Granted, consumer self-interest predicates a bigger array, roof permitting.)
Either way, the batteries will help fill the evening peak, lowering peak cost for all consumers, and eating coal’s lunch, all the better to hasten its demise.
With South Korea announcing it wants to phase out coal purchases from Australia, fossil pushers will be clawing revenue where they can. Panels, batteries, and an adequate inverter, can then only become an ever better investment.
With Snowy 2.0 blowing out from $2B to $12B now, on the way to $20B, it makes eminent sense to take the CHBP funding from $2.3B to $20B, with a concomitant capacity increase – an actual return for the money.
I say no to the minimum kW of PV per kWh of battery. For one, batteries make sense without any PV at all (or would, if it were included in the scheme). Also, my 6.6kW array generates 40kWh on a sunny day at this time of the year and fills my 32kWh battery. Any more solar and it would fill too early and I’d spill into a negative market and because I am on Amber, I’d pay to export; or I would have to curtail. As it is, I need to export about 15kWh into the peak (you’re welcome, grid) to have room for the next day’s generation and that works well with a 10kW inverter over 1.5 hours of decent price (couple of bucks made last night).
Your proposal would mess with what I reckon is good balance for me.
I’ll have to keep an eye on it, i want to add another 20kwh to my system (original battery from just before the scheme was introduced) , but i am in no hurry, waiting for things to settle a bit and see how my usage goes over 12 months to be sure.
Yes, this is one bright spot for Labor and I can’t see them allowing the program to end early due to funds running out.
I agree with the 25kWh limit That should be more than ample for most households.
Can’t see it running out. Governments overspend all the time. Think NDIS. They’ll just top it up in the next budget. Limiting to 30 kWh would not be unreasonable. I’d probably remove the requirement for solar panels with it. It’s contradictory if they are making free three electricity mandatory
Constant overspending ultimately results in a crash though Mark. With job creation now basically reliant on government spending, and Chinese importing of Australian materials heading for a crash, Australia’s economy is on a precipice. How much debt can Australia afford?
The problem with socialism is that you eventually run out of other peoples’ money. — Margaret Thatcher
Hi John,
Speaking of socialism, I take it you’re not using roads, reticulated water or the sewer? And you’ve handed in your medicare card of course..?
People say Margaret Thatcher should have a monument erected in her honour, in every major town in the UK.
Sadly these people don’t realise these edifices already exist. They’re called food banks, and unfortunately they’re very well patronised.
Have to agree with you. Modern complex economies require government involvement, not just for regulation (of which there is insufficient, just look at the Wild West of agricultural pesticides) but to balance the animal spirits of the market (eg; Freddy Mac junk bonds etc in the US) and these kinds of comments tend to decry taxation as too much as their next step. À famous comment by Oliver Wendell Holmes points out that he loved paying taxes, because with these I buy civilisation. Take a trip through India, Indonesia, and elsewhere if you want to see low tax countries and still uphold that argument. So, subsidies for ultimately increased efficiency in electricity use and reduced investment in generating capacity is a good deal for both the government and the consumer.
“The problem with socialism is that you eventually run out of other peoples’ money. — Margaret Thatcher”.
I lived in the UK for four years, 1987-1990, by 1990 under Thatchers trickle down economics, the amount of people begging in the streets and in the Tube was staggering and at the same time, the rich were absolutely swimming in money and had never had it sooo good, also by 1990 in the USA under Regan, exactly the same story, absolutely vast numbers of people living on the streets and begging and that was all over the entire USA,
I know, I saw it in it’s fullness, and it’s not pretty!
So be thankful of what we have here and why.
The fed govt would have clearly known that there would be a massive demand for batteries due to the advent of Australia having a huge 4 million rooftop solar systems. The addition of batteries is a no brainer!
If anything both the solar and battery rebates should be extended both financially and time wise, it’s much cheaper than rebuilding the grid.
Hi Smood,
Wealth inequality is now worse than that which kicked off the French revolution.
By some measures our society is now worse than feudal England.
In fact some places in the US are demonstrably medieval.
The widest use of “non compete” clauses is US employment law is actually by fast food & convenience chains.
So if you have a job with a fast food joint or petrol station, you can’t take up a better offer over the road.
Of course you’re “free” in America to move state, but if you have student loans to repay & can’t afford rent without your local friends/family support, then you can’t leave.
You’re effectively tied not to a lord & his castle estate, but to corporate overlords who own the jobs which don’t pay enough and the debt traps, and the grocery stores and the housing stock.
They’re talking about 50 year mortgages now…
Except NDIS addresses a basic need and this is more of a luxury for generally well off people. There is not a definite need to prolong this scheme.
Well if they do not extend it they will have to find a way to gracefully exit it – otherwise we will have the solar/battery boom/bust cycle again. It is a great way for the Govt to leverage their investment as opposed to Grid scale storage, (and is being done in parallel with that by a completely different workforce).
Continue it for the next 4 or 5 years. Let the industry have some certainty – which will attract more wholesale (utility) solar – knowing that they will not be fighting the solar duck curve.
Longer term get some of the larger installers to start rolling out 500Kw/h systems onto sporting ovals, council car parks and the like i.e. upskill more of the workforce to speed up the transition.
By rolling out at the scale that this is promoting we are enabling EVERYTHING in the supply chain to be optimised and streamlined.
Craig
avoiding a boom-bust cycle would be better for industry and safety. A steady rollout scheme so installers can earn their keep on safe professional solar and battery work for the long term would be a better aim. I think there are still plenty of sites to work on both on homes, commercially and community for those without roofs or opportunity to benefit easily.
Steve, say rather NDIS is supposed to address a basic need. The reality is mass rorting, semi-opaque rulings on who and what is or is not eligible, billing for services that may depend if it’s taxpayer or user paying, and a country going broke.
Speaking as someone who has family on NDIS, and more likely eligible but not claiming anything, just how much can the country afford?
I’d query the statement “mass rorting” here (yes sure there are problems and fraud), but on NDIS or in fact any welfare (including pensions) or health and education I’d say we can afford “Nuclear submarine base AUKUS” levels of spending. It’s amazing what we have money for when we want it. What do we want to support as a nation, health and education or militarisation and foreign at that?
For an estimated $300 million the federal government could construct 150 20-plug fast charger EV charging parks at distances of no more than 100 km apart over populated Australia. This would ensure safe EV motoring in the country. Maybe it would be worth rounding the battery scheme to $2 billion and implement the charger parks.
¿Por qué no los dos? (why not both?)
Why are you running with the narrative that the battery subsidy might run out without intervention? There is no cap, there is no intervention required, as verified by the Smart Energy Council CEO. The $2.3 billion is simply an estimate, the policy is demand driven and there is no way for it to run out unless the government changes its policy. So intervention is required to cut off the funding, not to keep it going.
Labor announced a $2.3bn election promise, and on winning government earmarked that funding to cover the four-year forward estimates period, but it is set to be exhausted in just one year. When this happens to government programs, they are reviewed and typically adjusted.
My experience: i just installed a 48 kwh modular battery with a 15kw inverter. Its linked to an existing solar array of 14kw. I did extensive modelling of the expected outcome, and found:
– the system just pays for itself (after federal subsidy) in about 7 years using NPV
– in some winter months (in SA) I will likely need the grid (or link a small generator), or an increase to my PV array.
– in Spring, Summer and Autumn there will be little or no reliance on the grid
– there was some (small) initial benefit in savings by going for 48kwh rather than say 24 kwh, but not much
– the larger battery sets me up to go off grid in future
– you only get 1 bite at the cherry with the feds subsidy, hence go big
– as the battery capacity degrades over 20 years i will still have enough energy to power my electricity intensive home.