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.
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.