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Cheaper Home Batteries deep long-tail

Why is the battery rebate smaller above 14 kWh, and what size is best?

Short answer

The tiers were added on 1 May 2026 to focus support on typical household batteries and stretch the program budget. The first 14 kWh earns 100% of the factor, 14 to 28 kWh earns 60% and 28 to 50 kWh earns 15%. For rebate value per dollar, 13 to 14 kWh is the sweet spot.

Written and checked by the Energy Merchants desk · Reviewed 3 October 2026 · For installers and homeowners

Two questions, one logic: why the rebate shrinks beyond 14 kWh, and what size makes the most of the full-rate band.

Why the tiers exist

Before 1 May 2026 the discount rose in a straight line with capacity up to 50 kWh. The program proved far more popular than first budgeted. The budget was expanded from $2.3bn to $7.2bn (as reported), and the government changed the settings: faster, six-monthly steps in the factor, and tiers that taper support as batteries get larger. The tiers cut spending on the largest systems, and the policy aim is to back household batteries that soak up midday solar rather than very large installations.

How the tiers work

Usable capacity band Share of the factor
First 14 kWh 100%
14 to 28 kWh 60%
28 to 50 kWh 15%
Above 50 kWh none

At the 6.8 factor the first 14 kWh earns 95 STCs, which is about $3,600 to $3,800 at $38 to $40, while the next 14 kWh earns only 57 STCs and the following 22 kWh earns only 22. The result is a rebate per kWh that falls from about $260 to $270 to about $160 and then about $40.

The best size under the 14 kWh tier

Every kilowatt-hour up to 14 earns the full 6.8 STCs, so the rebate share of the price is highest at the full-rate band. A 13.5 or 14 kWh battery captures the whole first tier. Going smaller leaves some of that discount unused, and going larger earns about 60% on the extra.

But size to your household, not the discount. A rough guide:

  • 5 to 8 kWh: low evening use, small solar surplus.
  • 10 to 14 kWh: a typical family home with solar of 6 kW or more.
  • Above 14 kWh: large evening load, EV charging, backup priorities or a VPP, where the extra is purchased on its own merits.

See the dollar figures for each size in 5 to 13.5 kWh and 15 to 28 kWh.

From the desk: Usable capacity decides which tier you land in, not the label. A battery labelled 15 kWh with 13.5 kWh usable sits wholly in the first tier.

What this means for installers

Quote customers a 14 kWh-or-under option alongside any larger one, and explain the tier split with the STC count. The customer can then see what the extra capacity costs in rebate terms. See nominal versus usable. To settle battery certificates on a published rate, see /pricing/ and /start-trading/.

What this means for you

Use the battery STC calculator to compare sizes. The 1 May 2026 changes and the battery STCs pillar set out the rules in full. Since the factor falls to 5.7 on 1 January 2027, timing matters as well as size.

Follow-up questions

People also ask

Was the tiering announced as a budget measure?
The program budget was expanded from $2.3bn to $7.2bn, as reported, and the tiering and faster factor reductions were part of keeping spending in check. Read the DCCEEW announcement for the government's own reasoning.
Is 14 kWh always the best size?
Best for rebate per dollar of hardware, usually. Not necessarily best for your load, backup needs or VPP plans.

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