Two things changed for batteries in 2026, and both cut the discount on larger systems. On 1 May the STC factor dropped to 6.8, and a tiered structure began, so only the first 14 kWh of a battery earns certificates at the full rate. The factor then falls again to 5.7 on 1 January 2027 and 5.2 on 1 July 2027. If you quoted batteries last year, your calculator is out of date.
This is an update for installers and households who want to understand what moved, by how much, and what it means for a quote. As always, confirm the current factor and bands with the Clean Energy Regulator (CER) before you rely on them, because the schedule is the part most likely to be revised.
The timeline so far
| Date | What happened |
|---|---|
| 1 July 2025 | Program starts. Batteries of 5 to 100 kWh usable earn STCs on up to 50 kWh. Roughly 30 per cent discount at launch. |
| 1 January 2026 | Factor steps from 9.3 to 8.4. |
| 1 March 2026 | Stricter photo and evidence rules for battery claims begin. |
| 1 May 2026 | Factor falls to 6.8 and size tiers start. |
| 1 January 2027 | Factor steps from 6.8 to 5.7. |
| 1 July 2027 | Factor steps from 5.7 to 5.2. |
| To 2030 | Factor continues to step down every six months. |
The factor used to move once a year, in January, and now moves every six months. The May 2026 reset made the decline steeper and the tapering by size is new.
What the tiers do
Before the change, every usable kWh up to 50 kWh earned the same number of certificates. Now:
- 0 to 14 kWh: 100 per cent of the factor
- 14 to 28 kWh: 60 per cent of the factor
- 28 to 50 kWh: 15 per cent of the factor
Above 50 kWh nothing earns certificates. The intent is to keep the discount meaningful for a typical household battery while limiting the cost of very large systems.
Worked numbers at a factor of 6.8
| Usable kWh | Certificates | Value at $38 | Value at $40 |
|---|---|---|---|
| 5 | 34.0 | about $1,292 | $1,360 |
| 10 | 68.0 | about $2,584 | $2,720 |
| 14 | 95.2 | about $3,618 | about $3,808 |
| 20 | 119.7 | about $4,548 | about $4,787 |
| 28 | 152.3 | about $5,788 | about $6,093 |
| 50 | 174.8 | about $6,641 | about $6,990 |
Read down the table and you can see the shape. Going from 14 to 28 kWh doubles the battery but adds about 60 per cent more discount. Going from 28 to 50 kWh nearly doubles it again and adds only about 15 per cent. For a household choosing between 13 kWh and 20 kWh, the question is no longer “what is the cheapest per kWh” but “what will I use”.
What the January 2027 step does
At the time of writing the factor moves from 6.8 to 5.7 on 1 January 2027 (and to 5.2 on 1 July 2027), a drop of about 16 per cent. On a 10 kWh battery that is 11 fewer certificates, roughly $420 at $38. On a 14 kWh battery it is about 15 fewer, roughly $580. We work through the buy-now-or-wait question in should you buy a battery before 2027.
For installers the effect is on the quote. A job sold in November and installed in January earns the lower factor. Contract wording that lets you adjust for the factor in force at installation protects your margin.
Evidence rules from 1 March 2026
Alongside the maths, the CER tightened the photo and evidence requirements for battery claims from 1 March 2026. In practice this means clearer images of the unit, the serial number and the installation location. These are the rejections we see most often on battery jobs, and the battery photo guide and submission guide cover them in detail.
Who is affected most
- Larger households and small businesses looking at 20 kWh or more. The tier structure trims their discount the most.
- Anyone quoting across a step date. A job straddling 1 January needs a clear installation date.
- Installers who carry the discount. A lower factor means less certificate value against the same battery cost, so cash flow and settlement speed matter. See how long STC payment should take.
Who is affected least
A typical 10 to 14 kWh household battery sits entirely in the full-factor tier. For these systems the 2026 change is mainly the factor itself rather than the tiers.
How to update a quote in practice
Here is a quick sequence for rebuilding a quote after the May 2026 changes, using a 16 kWh usable battery installed in late 2026.
- First 14 kWh at the full factor: 14 x 6.8 = 95.2.
- Remaining 2 kWh at 60 per cent: 2 x 6.8 x 0.6 = 8.16.
- Total: 103.36, so 103 certificates.
- At $38 that is about $3,914. At $40 it is $4,120.
- Repeat at 5.7 for a January install: 79.8 + 6.84 = 86.64, so 86 certificates, about $3,268 at $38.
The gap between the two dates is about $650. The point of doing the arithmetic yourself is that you can explain it to a customer without waving at a rebate calculator.
Why the program was changed
The reasons given publicly were cost and demand. The program proved more popular than expected, and uptake of larger batteries drove spending above early estimates. Tapering the discount by size and bringing the factor down faster were the levers chosen to keep the program running to 2030 within its budget. If that reading is right, further adjustments are possible, so the safest approach is to treat every figure as dated, not fixed.
What to do next
- Confirm the current factor, tiers and dates on the CER website before you quote.
- Rebuild your quote template around usable kWh and the date-based factor.
- Read the Cheaper Home Batteries Program overview for the full picture, or the battery STC page for how certificates are created and sold.
- Installers wanting to know what a battery certificate settles at can check today’s rates and start trading.