Federal Battery Rebate Update: Bigger Funding, Limited Time
The Australian Government has significantly increased funding for the Federal Battery Rebate (Cheaper Home Batteries Program), expanding it from $2.3 billion to $7.2 billion. This major boost is designed to ensure long-term sustainability of the program helping more households store their excess solar energy and rely less on the grid—especially during peak-priced evening hours.
Alongside the funding increase, a new tiered rebate structure will be introduced based on battery size:
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🔹 Smaller batteries receive stronger support per kWh
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🔹 Medium and larger batteries remain supported, but at a reduced rate
⚠️ Important timing note:
Rebates will now step down faster and more frequently than expected, with the next reduction planned for 1 May. With further adjustments possible, there’s never been a better time to lock in the highest rebate available.
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🔋 Federal Battery Rebate Scheme – FAQs
Battery Rebate Now Live! You can access the latest details here: Federal Battery Rebate | NSW Battery Rebate
How much is the federal battery rebate worth?
In 2025, the Maximum subsidy was $372 per kilowatt-hour (kWh) of usable battery capacity — that’s around 30% off the cost of your battery installation.
After administrative fees and charges (related to STCs), the actual battery price reduction is likely to be around $300 – 330 per usable kWh.
Will the battery rebate decrease over time?
The federal battery rebate has been more popular than anyone expected, so the reductions are happening faster than planned. Instead of dropping once a year, the rebate will now decrease every six months until the program finishes in 2030.
Much like the Small-scale Renewable Energy Scheme (SRES), the rebate will gradually taper, so it pays to act sooner rather than later to get the most savings. For example:
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On 1 January 2026, the rebate after administration costs dropped to around $300 per kWh.
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Just four months later, on 1 May 2026, it will drop again to around $244 per kWh.
Putting your battery in place before the next drop could make a noticeable difference to how much you save.
I already have a battery. Can I add another and claim the new rebate?
If you already have a battery, you may still be eligible to receive the new federal rebate when adding a second one, although you will not be able to claim the Federal Battery Rebate twice. The additional battery must have a minimum usable capacity of 5 kWh, and the total nominal capacity of your entire system (after the upgrade) must not exceed 100 kWh, with the rebate coving up to 50kWh of the battery system’s usable capacity.
2026 STC Battery Rebate: How Will Tiered Support Affect You?
From 1 May 2026, the STC support will gradually reduce as battery size increases. The scheme will move to a tiered system, so larger batteries get a smaller portion of the rebate:
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0–14 kWh: full 100% STC support
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14–28 kWh: 60% STC support
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28–50 kWh: 15% STC support
Is there a size requirement for the battery?
Yes.
- Minimum usable capacity: 5 kWh
- Maximum rebateable capacity: 50 kWh
- You can install systems up to 100 kWh, but the rebate will only cover the first 50 kWh.
I live in NSW. Can I access both state and federal battery incentives?
If you’re based in New South Wales and haven’t already taken advantage of the state’s battery incentive, you may still be eligible.
- BESS2 – Rebate for customers who connect their battery to a Virtual Power Plant (VPP)
NSW residents can potentially, access both the Federal rebate and the state’s Peak Demand Reduction Scheme (BESS 2), effectively allowing you to benefit from two incentives, providing all requirements are met as outlined in that program. You can access the most up to date information here
Does the battery need to be VPP-capable?
Yes, your battery will need to be able to connect to a Virtual Power Plant (VPP), but you don’t have to join one —unless you want to also take advantage of the NSW VPP rebate.
Can I install a battery off-grid and still receive the rebate?
Yes – off-grid systems may be eligible for the rebate. To qualify, the installation must be at least one kilometre from the nearest mains grid line or where the cost to connect to the grid exceeds $30,000.
Is the rebate means-tested?
No, the federal battery rebate is not means-tested, so your income won’t affect your eligibility.
Can I connect the battery to an existing solar system?
Yes – the battery must be connected to a new or existing solar system to qualify.
Can I claim the rebate on more than one property?
Yes – the rebate is limited to one per property, but if you have multiple properties with solar, each could be eligible.
Please note: some information may be subject to change. While we endeavour to keep our content updated, we always recommend checking government websites for the most current information.
