Government announces $4.9 billion funding boost and changes to discounting regime
A funding boost of around $5 billion will extend the government’s popular battery rebates, as the program’s initial $2.3 billion pot will be drained 12 months after the subsidy begins.
The government has also announced changes to the discount regime, which it says will increase the prices of many models but provide a fairer pricing structure, especially for those buying smaller batteries.
The government also announced on Friday it would review the controversial electric car rebate, which eliminates the cost of fringe benefits tax on the purchase of a new car bought on lease through a pre-tax pay deduction.
As announced during the 2025 election campaign, the rollout of the home battery scheme has exceeded expectations and the government now estimates that 2 million home batteries will be installed by 2030; This is twice the estimate of six months ago.
Energy Minister Chris Bowen said on Saturday that 160,000 home batteries have been installed since July and that the government’s extra $4.9 billion for the program will benefit not just battery-powered homes but across the electricity grid.
“We want more Australian households to have access to bills- and grid-friendly batteries – because it means cheaper, faster, safer solar power is available in our homes when and where it’s needed, day or night.”
Four million households have already installed rooftop panels, and Bowen said increased battery consumption would help more people store solar energy for use when the sun goes down, reducing pressure on the electricity grid at times of peak demand.
“Australia is a solar nation; we have more solar energy on our rooftops than pools in our backyards, and we want to match that success with home batteries to reduce everyone’s bills,” Bowen said.
Changes to the discount program starting from May 1, 2026 were also announced.
In the old system, the same discount was also applied to storage capacity. This meant that some larger battery systems were sold cheaper than smaller models.
The changes are designed to ensure that the 30 percent rebate is applied more evenly across small, medium and large-sized home battery categories, with support reduced in proportion to battery size.
For example, under the current plan, a customer would pay $8,305 for a 13.5-kilowatt-hour Tesla battery after discounting the $12,950 sticker price. According to the new regime, starting from May, the customer will pay $ 9,553.
FOXESS’ relatively large 42-kilowatt-hour system will cost $6999 after discounting the $21,392 sticker price. According to the changes, its cost will be $ 15,230. The government has said it is confident that prices for many models will continue to fall as incentives boost sales and increase competition in the retail market.
The program is limited to homes with solar panels, but homeowners can still benefit from the program if they install the panels and battery at the same time.
According to the government, a household that installs a 10-kilowatt-hour rooftop solar system can save approximately $1,000 a year in electricity costs. If they also install a 15 kilowatt-hour battery, they can save another $600 per year.
Kilowatts refer to the rate at which something charges or discharges energy, while kilowatt-hours (kWh) measure the amount of energy that thing can store. For example, a kilowatt-hour battery can pump out one kilowatt of energy in 60 minutes.
The Smart Energy Council, which represents home battery dealers and installers, welcomed the changes to the rebate scheme.
“Giving Australia’s four million solar homes the ability to time-shift the use of energy generation is a consumer energy revolution,” said John Grimes, Chief Executive of the Smart Energy Council.
The government has said it is confident that prices for many models will continue to fall as incentives boost sales and increase competition in the retail market.
Experts told this piece that the average household of four, consisting of two adults and two children, should consider installing a battery rated between 10 kWh and 15 kWh, given that they have at least an average-sized rooftop solar panel installation.
The popular fringe benefit tax exemption for electric vehicles applies to cars priced below $91,387. The government announced that it has waived $1.35 billion in taxes this fiscal year.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
