The federal battery incentive is a discount, not a payment. When an accredited installer fits an eligible home battery, the system earns small-scale technology certificates (STCs) based on its usable capacity, and the installer sells those certificates and takes their value off your price. The program is called Cheaper Home Batteries, it started on 1 July 2025, and at launch it delivered a discount of roughly 30 per cent of a typical battery’s price.
Understanding how the number is built lets you check a quote yourself. It also explains why the discount shrinks each year, why bigger batteries do not always earn proportionally more, and what an installer has to prove before anyone gets paid. This guide builds the incentive from first principles. For the program rules and changes through 2026, see our Cheaper Home Batteries overview.
The ingredients
Four things determine the incentive.
- Usable capacity in kWh. Not the headline “nominal” figure on a brochure. The program uses usable capacity as published in the CEC listing for the model, within a 5 to 100 kWh range, with up to 50 kWh counted toward certificates.
- The STC factor for the install year. 6.8 per kWh for 2026 installs, falling to 5.7 on 1 January 2027 and to 5.2 on 1 July 2027, stepping down every six months to 2030.
- The STC price. The market has been roughly $38 to $40 at the time of writing, with a clearing house ceiling of $40.
- Eligibility. A CEC-approved battery, VPP-capable, installed by an accredited installer, one per property, with new or existing solar.
The arithmetic
STCs = usable kWh x factor, rounded down. Value = STCs x the price your installer credits.
| Usable kWh | 2026 STCs | Value at $38 | 2027 STCs | Value at $38 |
|---|---|---|---|---|
| 10 | 68 | $2,584 | 57 | $2,166 |
| 13.5 | 91 | $3,458 | 76 | $2,888 |
| 20 | 136 | $5,168 | 114 | $4,332 |
Programs adjust how larger capacities are treated. Use our answer on the May 2026 changes and the tier answer before relying on the larger rows for a real quote.
Why “30 per cent” is only a guide
The percentage depends on the battery price. At launch a typical battery cost enough that the STC value worked out to around 30 per cent. If the battery is cheaper, the same STCs are a larger share; if more expensive, a smaller share. And because the factor falls over time, the share of a given battery’s price covered by the incentive falls too, unless prices fall to match.
Why capacity matters more than brand
Two batteries with the same price can earn different STCs if their usable capacity differs. A cheaper battery with 10 kWh usable earns less than a dearer one with 13.5 kWh, but the extra capacity may cost more than the extra discount. Compare the net price per usable kWh after the incentive, not the sticker price.
Who gets the money
The certificates belong to the owner of the battery. In practice, the household signs an assignment form giving them to the installer, who creates the certificates, sells them, and applies the value to the invoice. The installer carries the wait for payment and the compliance risk if a claim fails. That is why a few installers will not quote the full STC value: they hold back a share to cover cost and risk. Ask for the STC count and the dollar value per STC on your quote.
What the installer has to prove
The Clean Energy Regulator requires evidence for each claim, including the battery model and serial number, proof the model is approved, photos of the installation, and details of the accredited installer. New photo and evidence rules have applied since 1 March 2026. The battery submission guide and our battery STC submission insight walk through them.
What the incentive does not cover
- A second battery at the same property. The program is one per property.
- Unapproved or non-VPP-capable models.
- Installation by a non-accredited installer.
- The VPP. Membership is optional, and any VPP payment is separate from the incentive. See battery rebate versus VPP.
State layers
Some states layer their own incentives on top, such as the NSW PDRS incentive for VPP connection and the Western Australian residential battery scheme. They have their own rules and funding limits. Our state comparison shows how to read them without trusting a headline.
Reading a quote: a worked example
Suppose a household in Zone 3 receives this quote for a 13.5 kWh usable battery installed in November 2026: gross price $13,500, 91 STCs credited at $38 each ($3,458), net price $10,042. Three checks take two minutes. First, 13.5 x 6.8 is 91.8, rounded down to 91, so the count is right. Second, $38 sits inside the current $38 to $40 range, so the credit is sensible. Third, the net figure is the gross price minus the credit, so nothing is hidden. The gross price here is an illustration, not a market figure.
Now change one fact. If the install slips to February 2027, the factor is 5.7 (5.2 from 1 July 2027) and the same battery earns 76 STCs, worth $2,888, so the net price rises by $570 to $10,612. The quote should say which factor applies and what happens if the date moves. A quote silent on this is incomplete.
Questions households ask most
Can I wait for prices to fall? Battery prices may fall, but the factor falls on a published schedule, so any saving in price has to outrun the step-down in the incentive. Run both numbers for your own battery.
Does solar have to be installed at the same time? No. The incentive works with new or existing solar.
What if my installer goes out of business after install? The certificates are created at or soon after installation. If a claim fails or the installer closes before lodging, the household can be left chasing. Choose an installer with a track record and confirm who lodges the claim and when.
What it means for installers
For installers, the incentive is a cash-flow arrangement: you fund the battery and wait for the STC money. At 91 STCs a job, ten jobs a month is 910 certificates and around $34,580 at $38, a sum worth having a published rate and settlement time for. See our battery STC pillar and pricing.
What to do next
- Find your battery’s usable capacity in the CEC listing.
- Multiply by the factor for your install year and round down.
- Ask for a quote showing STC count, dollar value per STC and net price.
- Read the Cheaper Home Batteries installer guide if you install batteries, and how it works for the settlement process.