Australia’s home battery market is running hotter than expected, and the government’s flagship rebate may be heading for a recalibration. Industry groups have warned that the Cheaper Home Batteries program is burning through its budget faster than anticipated, driven in part by a surge in larger storage systems.
According to recent reporting, one of the key fixes now being considered is a shift to size-based discounts—a sliding scale approach designed to spread support more evenly and keep the scheme sustainable. It’s a tweak that could change the way households think about battery sizing and timing, especially as demand continues to rise across the country.
The problem: Bigger batteries are consuming a disproportionate share of the funding
The current Australian home battery rebate offers a flat percentage across a wide range of battery sizes, which means larger units automatically attract larger discounts. As installations surge, that structure is starting to show its limitations. Uptake in the 20 to 50 kWh range has accelerated, with these bigger systems drawing heavily on the scheme’s budget.
According to industry experts, this trend is creating pressure that could shorten the lifespan of the program and destabilise the market. Without adjustments, the risk is a familiar one: a quick boom followed by a contraction when funds tighten, leaving households and installers exposed.
The proposed solution
To ease the pressure on the scheme, industry bodies are urging a move toward a sliding-scale rebate that tapers as battery capacity increases. Instead of every system receiving the same percentage discount, the incentive would adjust according to size, preserving stronger support for the smaller-capacity units most commonly installed in Australian homes.
Larger batteries would still qualify, but at a reduced rate that reflects their higher cost and outsized impact on the rebate budget. This approach is designed to stretch the program further, avoid sudden rule changes, and provide a consistent framework that households and installers can plan around.
What sliding-scale rebates could look like
A shift to size-based discounts wouldn’t remove support for larger batteries, but it would rebalance how the rebate is shared across system sizes. Under the current structure, a flat percentage applies whether a household installs a modest 10 kWh unit or a 40 kWh system designed for heavy evening use. A sliding-scale model would introduce stepped reductions as capacity increases, keeping the strongest incentives for typical home batteries while moderating the discount on oversized systems.
Below is an example of how a tiered structure could work in practice. This is not a formal proposal, but a simplified illustration based on industry commentary:
| Usable Capacity (kWh) | Current Rebate | Possible Sliding-Scale Rebate |
| 5–10 kWh | ~30% | ~30% |
| 11–15 kWh | ~30% | ~27–28% |
| 16–25 kWh | ~30% | ~22–25% |
| 26–40 kWh | ~30% | ~18–20% |
| 41–100 kWh | ~30% | ~15–18% |
This kind of structure aims to support the greatest number of households while slowing the rate at which very large systems draw down the scheme’s funding.
Who benefits — and who pays more
A size-based rebate structure naturally favours the households installing the most common battery sizes. Units in the 10 to 15 kWh range — typically enough to cover evening demand and provide resilience during outages — would continue to receive close to the full discount. This keeps the rebate accessible for families looking to pair solar with practical, everyday storage.
This is less favourable for buyers considering larger systems, where the rebate would taper, and overall costs could rise. Those installations would still be supported, but not at the same level as before. Installers, meanwhile, stand to gain from a more stable market. By smoothing out demand and reducing the incentive-driven rush toward oversized batteries, a sliding-scale model creates steadier workloads and lowers the risk of abrupt policy swings disrupting their pipeline.
Why industry prefer this tweak over harder alternatives
A sliding-scale rebate is emerging as the preferred option because it avoids the shockwaves that often follow sudden policy changes. Reducing the maximum eligible system size or cutting the rebate outright would create immediate winners and losers, disrupt installation schedules, and leave businesses scrambling to adjust their stock and pricing.
A tapered model, by contrast, preserves access for all system sizes while easing the strain on the program’s budget. It offers installers a clearer path forward, gives households time to plan, and reduces the likelihood of a boom-and-bust cycle that could undermine confidence in the sector. By softening the adjustment rather than imposing rigid limits, the industry sees a sliding scale as the most practical way to maintain momentum without sacrificing long-term stability.
What homeowners should do next
For those considering a battery, the possible shift to size-based rebates doesn’t mean rushing into a purchase, but it does make timing and sizing more important. Those looking at larger systems may benefit from moving sooner, as any future tapering would reduce the discount on high-capacity units.
For typical homes aiming for a 10 to 15 kWh battery, the impact is likely to be minimal, meaning you can continue comparing options without pressure. What matters most is selecting a system that fits your energy profile rather than chasing the biggest rebate.
Gathering quotes now also helps lock in current incentives if policy updates occur later in the year. The broader outlook remains unchanged: batteries continue to offer solid long-term value through bill savings, backup capability, and improved solar self-consumption. The rebate adjustments are about sustainability, which means households can still plan with confidence.
Any move toward size-based discounts is less about cutting support and more about keeping the battery rebate accessible for as many households as possible. With demand rising and larger systems taking a bigger share of the budget, a sliding-scale model offers a practical way to extend the life of the scheme without disrupting installations or limiting choice.
For homeowners, the core calculation stays the same: choose a battery that aligns with your usage, your solar capacity, and your long-term goals. The market remains strong, storage continues to deliver meaningful value, and the rebate — even with tweaks — will still help households reduce upfront costs. The year ahead will bring adjustments, but the broader transition to home batteries is only gaining momentum.
Energy Matters has been in the solar industry since 2005 and has helped over 40,000 Australian households in their journey to energy independence.
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