Breaking News: Changes to the Federal Battery Rebate could happen soon!

Why the Rebate Has Been So Popular and Why That Can Cause Issues

The Cheaper Home Batteries rebate aims to make energy storage more accessible by offering a discount of around 30 % off eligible systems through the Small-scale Renewable Energy Scheme (SRES).

Recent data shows that households are choosing larger batteries than before, with the average system installed since October sitting at around 28 kWh. At the same time, a big share of the rebate budget is being used on large batteries (50 kWh and above) in larger homes and commercial property settings.

The Smart Energy Council (SEC) — a key industry group — says that without sensible updates, the rebate risks a boom-bust cycle that could hurt both consumers and the battery industry. SEC CEO John Grimes has called for tweaks to system sizing and rebate settings to ensure the program remains sustainable and continues to deliver value.

1. The Rebate Was Always Meant to Come Down — But Not Like This

From day one, the federal solar battery rebate was designed to taper gradually, following this original glide path (before admin and trading costs):

• 2025: $372/kWh

• 2026: $336/kWh

• 2027: $296/kWh

• 2028: $260/kWh

• 2029: $224/kWh

• 2030: ~$188/kWh

Even in 2030, a typical 20 kWh battery would still receive more than $3,500 in support.

But right now?
That same system attracts more than $7,000 — almost double what was planned.

The problem isn’t that the rebate is decreasing. The problem is that the scheme expected a controlled descent — and instead, demand has gone vertical.

2. Why the Current Settings Are Unsustainable

This is where the SEC’s warning becomes stark.

Battery sizes have surged

• Early in the scheme: ~16 kWh average size

• Today: ~28 kWh and rising

At ~$300–$350 per kWh, that’s frequently $8,400+ rebates per install.

The November blowout

• 36,000 batteries installed

• ≈2,000 installs per day

• $350–$360 million spent in one month

Official figures show $850–$900 million already paid out.
But once you include systems already sold and deposits taken, total committed spend is closer to:

👉 just under $2 billion.

That leaves roughly $400–$600 million uncommitted —
only weeks of funding at current burn rates, not months.

This is why the Federal Government is alarmed

3. The Tiered Rebate: “The Least Bad Option”

The Smart Energy Council presented a tiered rebate structure as the fairest and most stabilising solution.

Proposed tier model:

• 100% rebate for the first 14 kWh

• 50% rebate for the next 14 kWh (to 28 kWh)

• 10% rebate from 28 kWh to 50 kWh

This model:

• Preserves choice for families needing larger systems

• Slows the funding burn dramatically

• Reduces oversized, rebate-maximising installs

• Pushes cheap “junk installs” out of the market

• Keeps the scheme operational for longer

It targets the extremes — from the $4,000 low-end, low-quality installs to the $20,000+ oversized rebate harvesters — and creates a more balanced landscape.

The question is whether the government will allocate another ~$500 million to extend the scheme into late 2026.

4. Why a Sudden Cutoff Is a Real and Dangerous Possibility

The SEC was crystal clear: hard caps or abrupt cuts would be catastrophic.

They risk:

• Stranded batteries and unsellable stock

• Broken customer contracts

• Installers and wholesalers collapsing under cashflow pressure

• Imported inventories becoming instantly non-viable

The SEC is urging government to avoid a sudden guillotine.
But — they also admitted — warnings don’t control the Federal Government.

5. The Political Reality Driving Federal Government’s Thinking

This is no longer an energy decision.
It is a Federal Government budget-protection decision.

The government just cut a $300 household energy bill rebate that would have supported:

• 8–9 million households

• ~20 million Australians

If that program couldn’t survive the budget process, the Federal Government may not protect a battery rebate helping a much smaller group, while burning $350M per month.

The maths is sobering:

A 3-month taper would add:
👉 $700M–$1B more unplanned budget spend.

Federal Government might simply not accept that.

6. The Long-Term Reality: Batteries Are Essential Infrastructure

Despite the rebate crisis, one truth remains:

Australia cannot meet its renewable energy goals without batteries.

Home batteries are:

• Supporting the grid during transmission delays

• Filling the gap while large-scale renewable projects stall

• Providing backup during extreme weather

• Enabling electrification of homes and vehicles

Killing the scheme outright would be:

• A short-term budget win

• A long-term energy system failure

This is the tragic crossroads Australia now faces.

What You Can Do Now

If you are considering a battery, acting sooner rather than later is the safest option — while the rebate is still high and before any sudden policy change.

Explore SEA’s recommended systems:

• Premium storage options:
  SEA Smart Batteries
  https://www.smartenergyanswers.com.au/sea-smart-batteries

• Federal battery rebate guide:
  https://www.smartenergyanswers.com.au/federal-battery-rebates-2025

• Powerwall 3 for advanced home backup:
  https://www.smartenergyanswers.com.au/tesla-powerwall-3-solar-storage

• Sigenergy high-capacity systems:
  https://www.smartenergyanswers.com.au/sigenergy

• ESY Sunhome for long-life performance:
  https://www.smartenergyanswers.com.au/esy-sunhome-1c

Want to learn more about how it can affect you? 

Book a call now?