On 13 December 2025, the Australian Government announced updates to the Cheaper Home Batteries Program, set to start on 1st May 2026. This includes an expansion of the original $2.3 billion estimate to an estimated $7.2 billion. These changes may affect the amount of financial support Perth homeowners receive when installing a new solar battery system.
What is the Cheaper Home Batteries Program?
The Cheaper Home Batteries Program is an initiative launched by the Australian federal government in July 2025. It aims to reduce the high upfront cost of installing battery storage systems for households and businesses. The program currently provides a 30% discount on the installation of a range of small-scale battery systems. The discount applies to the first 50 kWh of battery capacity for systems up to 100 kWh. This can translate to thousands of dollars in savings for homeowners.
The program operates as an expansion of the existing Small-scale Renewable Energy Scheme (SRES). This means the discount is provided by issuing Small-scale Technology Certificates (STCs). The application for your STCs is typically handled by your solar installer, with the discount value then applied to your system’s upfront price on the quote. Western Australian households can combine this federal battery rebate with the WA solar battery rebate to further increase their savings.
Key Changes to the Federal Battery Rebate
Beginning on 1st May 2026, Australia’s Cheaper Home Batteries Program is being updated and adjusted. These are the key changes that were announced:
- Increase in Program Funding: The original funding estimates of $2.3 billion have been increased to an estimated $7.2 billion over the next four years.
- Adjustment of STC Factor: The STC Factor (the calculation used to determine your discount amount) will be adjusted to decline at a quicker and higher rate.
- Adjustment of Support Amounts: The discount calculations have been adjusted to align with declining battery costs to maintain around 30% discount for a range of battery system sizes.
Expansion in Home Battery Program Funding
When the Cheaper Home Batteries Program was first announced, the federal government gave it a budget of around $2.3 billion. Within the first 6 months of the program being open, nearly all of this budget had already been spent. This led the Australian Government to reassess and add another $4.9 billion to the program’s funding. This new $7.2 billion budget is expected to last until 2030 and see more than 2 million Australians install a battery.
Quicker and Higher STC Factor Decreases
The STC Factor determines the number of STCs a battery system is entitled to create per kWh of usable capacity. Originally, the factor was set to decline yearly, but from May 2026, the factor will be adjusted to decline every 6 months. The STC factor will also be reducing at a higher rate every period. The table below outlines the proposed changes to the STC factor:
| Year | Period | Existing STC Factor | Proposed STC Factor |
|---|---|---|---|
|
2026 |
January – April |
8.4 |
8.4 |
|
2026 |
May – December |
8.4 |
6.8 |
|
2027 |
January – June |
7.4 |
5.7 |
|
2027 |
July – December |
7.4 |
5.2 |
|
2028 |
January – June |
6.5 |
4.6 |
|
2028 |
July – December |
6.5
|
4.1 |
|
2029 |
January – June |
5.6 |
3.6 |
|
2029 |
July – December |
5.6 |
3.1 |
|
2030 |
January – June |
4.7 |
2.6 |
|
2030 |
July – December |
4.7 |
2.1 |
Tiered Support According to System Size
The discount calculations have been adjusted to maintain an approximate 30% discount for battery systems at all levels of capacity. Under the current program, the same STC Factor is applied to every kWh of a battery’s usable capacity. This meant that larger batteries received a larger discount. As of May 2026, the STC factor will decrease as the size of the battery increases. The proposed tiers of support are:
- STC Factor applied at 100% for 0 kWh up to 14 kWh (inclusive).
- STC Factor applied at 60% for every kWh greater than 14 and up to 28 kWh (inclusive).
- STC Factor applied at 15% for every kWh greater than 28 and up to 50 kWh (inclusive).
The program will continue to support battery installations up to 100 kWh. However, the discount will only be applied to the first 50 kWh of battery capacity.
What Do These Changes Mean for Perth Homeowners?
Timing is everything with these upcoming changes to the federal battery scheme. If you have your battery system installed before 1st May 2026, you will be entitled to the current, more generous discount rates. Systems installed from the start of May 2026 will fall under the new tiered structure and its lower rates. So the sooner you install your solar battery system, the larger the discount. Even when installing a battery under the new program, it’s better to have the system installed sooner rather than later to take advantage of the higher STC factor.
If you want a solar battery system for your home or business, contact Perth Solar Force. Our solar installation team will answer any questions you may have about solar and the related government incentives.