The Cheaper Home Batteries Program is the policy most associated with Energy Minister Chris Bowen in this term, and it has changed more than once since it started on 1 July 2025. If you only remember the headline, a battery discount of “30 per cent”, you are working from a year-old picture. This is what has actually changed, in order, and what the numbers do on a real job.
What the program is
The federal program creates small-scale technology certificates (STCs) for a home battery installed from 1 July 2025. The battery must be 5 to 100 kWh usable capacity (up to 50 kWh counts toward the rebate), CEC-approved, VPP-capable, and installed by an accredited installer. It works with new or existing solar, and one battery is eligible per property. The certificates are the rebate. They are not a cash grant paid to the household.
For the basic mechanics, see our guide for installers. This article is about what moved.
Change one: the budget
At the launch the program was reported at $2.3 billion. Strong uptake led the government to expand the budget to a reported $7.2 billion. The reason the money matters to you is that the program is demand-led through certificates: each STC created is a liability on electricity retailers through the small-scale technology percentage, and the percentage was set high for 2026 (11.67%) specifically to absorb battery volume. A bigger budget is, in effect, the government accepting more certificates and a longer runway.
Change two: the factor steps every six months
The factor is the number of STCs per kWh of usable capacity. The verified schedule is:
| Install period | Factor |
|---|---|
| July to December 2025 | 9.3 |
| January to April 2026 | 8.4 |
| May to December 2026 | 6.8 |
| January to June 2027 | 5.7 |
| July to December 2027 | 5.2 |
It continues to step down until 2030. Do not tell customers it “declines each January”. It now moves twice a year. At the time of writing it is 6.8, stepping down to 5.7 on 1 January 2027 and 5.2 on 1 July 2027.
Change three: the tiers from 1 May 2026
This is the change that surprised most customers. Since 1 May 2026, usable capacity earns STCs in bands:
- First 14 kWh at 100% of the factor
- 14 to 28 kWh at 60%
- 28 to 50 kWh at 15%
Worked example at a factor of 6.8 and a market price of roughly $38.50:
| Battery | Calculation | STCs | Approx. value |
|---|---|---|---|
| 10 kWh | 10 x 6.8 | 68 | $2,620 |
| 14 kWh | 14 x 6.8 | 95 | $3,660 |
| 24 kWh | 95.2 + (10 x 6.8 x 0.6) | 136 | $5,240 |
| 40 kWh | 95.2 + 57.1 + (12 x 6.8 x 0.15) | 164 | $6,320 |
The 40 kWh battery is almost three times the size of the 14 kWh one and creates only 1.7 times the certificates. For most households, the sweet spot is now around the 14 kWh mark where every kWh is paid at full factor. Our tier breakdown goes through it.
Change four: tougher evidence
From 1 March 2026 the Clean Energy Regulator tightened battery photo and evidence requirements. A claim without clear, timestamped photos of the battery, serial and installation is more likely to be held. See our guide to battery installation photo requirements.
Change five: the January 2027 step
The next step is 1 January 2027, when the factor falls from 6.8 to 5.7. On a 14 kWh battery that moves the count from 95 to 79 (14 x 5.7 = 79.8, rounded down). At $38.50 that is about $616 less discount. Any customer who signs in December and installs in January will cop it, which is why installation date, not signing date drives the entitlement.
From the desk: Write the install date commitment into the contract. If weather or stock pushes a 20 December job into January, the customer’s discount falls by hundreds of dollars and your margin takes the argument. Either carry the difference in the quote or tell the customer in writing who bears it.
What did not change
State incentives did. NSW took batteries out of its own PDRS incentive after the federal program began (BESS1 suspended from 1 July 2025), while the NSW commercial battery incentive started from 1 September 2026, as reported. WA runs its own scheme and requires VPP participation. Several state loans and top-ups have closed, including the NT battery scheme, Tasmania’s Energy Saver Loan, Queensland’s Battery Booster and Victoria’s Solar Battery Loan. We list them in energy rebates ending in 2026.
Who gains and who loses from the tiers
The tier design is a deliberate nudge. The first 14 kWh is where a typical household’s evening load sits, so the program pays full factor there and tapers beyond it. Households that want a 30 kWh battery for an electric vehicle or a large family still get a discount, but a smaller share of it.
For an installer, the effect shows up in the quote, not in the market. Three practical consequences:
- The average job gets smaller. Customers who would have bought 20 kWh at the old factor now ask whether 13.5 or 14 kWh will do. Have an honest answer ready.
- Stacked units are not a loophole. One battery per property is eligible, so two 14 kWh units do not earn two full-factor tiers.
- Margin is protected by sizing conversations. Selling the right battery beats selling the biggest one, and customers remember it.
The politics, briefly
Battery policy has been a visible plank of the government’s energy agenda, so announcements tend to arrive as ministerial statements first and detailed Clean Energy Regulator guidance second. The practical lag between the two matters. A media release is not a rule. Until the regulations and the CER’s installer guidance are published, quote conservatively, and keep an install-date clause in the contract so a late rule does not become your loss.
Questions customers keep asking
“Is the rebate going away?” It continues to step down to 2030. It is not ending at the next step, but each step is smaller in dollar terms. See should you buy a battery before 2027.
“Do I need solar?” No. It works with new or existing solar, and also for a battery installed on its own.
“Will I get cash?” No. The benefit is a discount at the point of sale, funded by the installer selling the STCs.
“Does the VPP matter?” Yes. The battery must be VPP-capable to be eligible, though joining a VPP is a separate decision, and some state incentives (such as WA’s) require it.
What it means for your book
- Quote the tier maths, not the old per-kWh headline
- Make the install date part of the quote
- Capture photos to the CER standard on the day
- Expect an early-December rush, then a quieter January (see pull-forward demand)
What to do next
- Run each battery quote through the battery STC calculator
- See what we publish for battery certificates on battery STCs and today’s rate on pricing
- Read the changes round-up for 2026
- Keep the scheme changes hub bookmarked for dates