13 Dec, 2025
1. Introduction
2. Why the Cheaper Home Batteries Program Is Being Revamped
3. Key Changes to Funding, Rebates & Battery Sizes
4. Impact on Australian Households & Installers
5. Conclusion
The federal government has announced major updates to Australia’s Federal Battery Rebate under the Cheaper Home Batteries Program in which there is significant expansion in funding while tightening rebate rules. An additional $4.9 billion has been allocated which lifts the total program budget from $2.3 billion to $7.2 billion over four years.
Alongside this funding boost, the government has restructured the battery rebate scheme to slow down spending particularly on oversized home battery systems that were rapidly depleting the original budget. These changes aim to make sure the program remains sustainable through to 2030 while continuing to support household battery adoption across Australia.
The Cheaper Home Batteries Program was originally designed to last across a four-year forward estimates period. However, uptake exceeded expectations with data showing the $2.3 billion allocation for Battery Rebate 2025 was on track to be exhausted by mid-2026, just one year after launch.
A key driver behind this rapid spending was the installation of much larger batteries than anticipated. Average battery sizes rose to around 28 kWh, compared to typical installs of 10–12 kWh in previous years. Many of these systems were larger than what most households realistically required.
To prevent the scheme from running out of funds early and to align incentives with declining battery costs, the federal government has now reworked the rebate structure to better manage demand and spread benefits across more households.
1. Program Budget Expanded to $7.2bn
The federal government has added $4.9bn to the original $2.3bn allocation which has now extended the Battery Rebate Scheme through to 2030 and supports over two million battery installations.
2. Faster & More Frequent Rebate Reductions
From May 2026, rebate values will decline every six months instead of annually to reflect falling battery costs and controlling overall scheme spending.
3. Reduced Rebate Value Per kWh Over Time
Estimated rebate values under the Solar Battery Rebate drop from $372 per kWh in 2025 to $84 per kWh by the second half of 2030.
4. New Tiered Incentives Based on Battery Size
Full rebates apply only up to 14 kWh with reduced incentives for batteries between 14–28 kWh and minimal rebates for systems above 28 kWh.
5. Cap on Rebated Battery Capacity
While batteries up to 100 kWh remain eligible in Battery Rebate Australia will only apply to the first 50 kWh of usable capacity.
6. Changes Effective From May 2026
All revised rebate rules will apply only to batteries installed from May 2026 onward, with further reductions each January and July.
Below are some major impacts points which can affect households:
Smaller and mid-sized batteries will receive the strongest rebate support.
Oversized battery systems will attract significantly lower incentives.
Homeowners have clearer timelines to plan installations and use a Battery Rebate calculator before future reductions.
Installers gain better certainty for pricing, stock planning and workforce training.
The Cheaper Home Batteries Program remains viable longer which will allow more households to benefit overall.
The revamp of the Federal Battery Rebate reflects both the success and challenges of Australia’s rapidly growing home battery market. While demand has far exceeded initial expectations, the updated funding model and tiered rebate system are designed to make sure the Federal Government Battery Rebate remains viable through to 2030.
By expanding the budget, accelerating rebate reductions and discouraging oversized installations, the federal government aims to support widespread battery adoption while delivering meaningful benefits for household energy bills and grid stability. For Australian homeowners, understanding these changes will be essential to Federal Battery Rebate eligibility and knowing how to claim Federal Battery Rebate benefits will be essential when planning a battery installation in the years ahead.
