Battery tier factor

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

The battery tier factor is the sliding scale that makes each extra kilowatt-hour of a large battery earn fewer STCs. Under the Cheaper Home Batteries Program, usable capacity is split into bands, and each band is multiplied by the STC factor at a different percentage.

Since 1 May 2026 the bands are:

Up to 50 kWh of usable capacity counts. Anything above that earns nothing more. See usable capacity.

A worked example

At the 2026 factor of 6.8 (at the time of writing, stepping to 5.7 on 1 January 2027), take a battery with 20 kWh usable capacity.

• First 14 kWh: 14 x 6.8 x 100% = 95.2
• Next 6 kWh: 6 x 6.8 x 60% = 24.48
• Total: 119.68, which rounds down to 119 STCs

A 10 kWh battery sits entirely in the first band, so it earns 10 x 6.8 = 68. Doubling the size to 20 kWh does not double the STCs. It earns about 75% more. At roughly $38 to $40 per STC, the extra 10 kWh adds about $1,940 to $2,000 of discount, against a price that rises more steeply.

In practice

Tiering is why bigger is not always better value for a household. Most homes sit in the first band, and the second band helps those with high evening use or backup needs. The third band is for very large systems. Quote the STC discount for the exact usable capacity, and use the battery STC calculator to confirm.

For a commercial or multi-battery job, check the program’s rule of one battery per property, and how stacked modules are treated. See the Cheaper Home Batteries Program installer guide.

Common confusion

The tier percentages are not the same as the factor. The STC factor is 6.8 per kWh in 2026. The tier percentage decides how much of it applies to a given band. Also, the tiers use usable, not nominal, capacity.

See battery STCs and the glossary.