Cheaper Home Batteries Program explained: eligibility and the 14/28/50 kWh tiers

Australia's federal Cheaper Home Batteries Program launched on 1 July 2025 to cut around 30% off the upfront cost of installing a small-scale solar battery. Delivered through the existing Small-scale Renewable Energy Scheme (SRES), the program passed 500,000 installations in its first year and was expanded in December 2025 to an estimated $7.2 billion over four years.

That expansion came with two major rule changes that took effect on 1 May 2026 under the Renewable Energy (Electricity) Amendment (Cheaper Home Batteries Program) Regulations 2026 (F2026L00093): a three-tier capacity taper at 14 kWh, 28 kWh and 50 kWh, and six-monthly step-downs in the certificate factor. Here is exactly how the rules work today.

How the program works (it's an upfront point-of-sale discount)

Despite being called a "rebate", you don't pay full price and wait months for the government to reimburse you. Instead, the program works the same way as the federal solar panel subsidy:

• When a Solar Accreditation Australia (SAA) accredited installer commissions your eligible battery, the system entitles you to create Small-scale Technology Certificates (STCs).
• You assign those STCs to your installer or solar retailer at the point of sale.
• The installer deducts their dollar value directly off your tax invoice, and the Australian Government purchases an equivalent number of certificates to fund the scheme.

Each STC is capped at $40 ex GST in the Clean Energy Regulator (CER) clearing house, and trades just under that on the open spot market ($39.65 per STC on Demand Manager as of 15 October 2026). Installers typically pass on $38 to $39.65 per certificate after admin fees — always check the STC line item on your quote.

Eligibility checklist: who and what qualifies

The core eligibility rules did not change on 1 May 2026. Under Clean Energy Regulator and DCCEEW rules, your installation must meet every item below:

• 5 kWh to 100 kWh nominal capacity. Your battery (or group of modular batteries installed together as one unit) must have a nominal label capacity between 5 kWh and 100 kWh.
• Paired with new or existing solar PV. The battery must be installed with a new or existing rooftop solar PV system of no more than 100 kW. Standalone batteries on homes without solar do not qualify.
• CEC-approved battery & inverter. Both the battery modules and the inverter must be on the Clean Energy Council (CEC) approved product list on the installation date.
• SAA-accredited battery installer. The system must be installed by a Solar Accreditation Australia (SAA) accredited installer holding a battery endorsement, complying with AS/NZS 5139:2019.
• Brand-new equipment. Battery cells must be new (manufactured within 12 months of installation) and never previously installed or claimed for STCs.
• One claim per property / NMI. You can only claim one subsidised battery system per National Metering Identifier (NMI) for on-grid properties, or one per dwelling for off-grid properties.

Can you upgrade an existing battery?

According to DCCEEW and CER rules, additional capacity added to an existing battery system is eligible only if the existing battery has never previously received a discount under the Cheaper Home Batteries Program, the added capacity is at least 5 kWh nominal, and the combined total nominal capacity does not exceed 100 kWh.

How the 14 / 28 / 50 kWh capacity tiers work

Before 1 May 2026, every kWh of usable capacity up to 50 kWh earned the full STC factor, which encouraged oversized 30–50 kWh installations. From 1 May 2026, the government introduced a progressive three-tier taper based on your battery's usable capacity (the energy you can actually discharge, which is often 5–10% lower than nominal capacity):

• Tier 1 (0 to 14 kWh usable): Earns 100% of the STC factor. For May–December 2026 (factor 6.8), every kWh in this band earns 6.8 STCs (about $270 per kWh at $39.65/STC). Popular single-unit batteries like the Tesla Powerwall 3 (13.5 kWh), BYD HVM 13.8 (13.8 kWh) and Sungrow SBR 12.8 (12.8 kWh) sit entirely inside this full-rate band.
• Tier 2 (above 14 kWh up to 28 kWh usable): Earns 60% of the STC factor. In May–December 2026, each extra kWh in this band earns 6.8 × 0.6 = 4.08 STCs (about $162 per kWh).
• Tier 3 (above 28 kWh up to 50 kWh usable): Earns 15% of the STC factor. In May–December 2026, each extra kWh in this band earns just 6.8 × 0.15 = 1.02 STCs (about $40 per kWh).
• Above 50 kWh usable (up to 100 kWh nominal): Your system is still eligible for the program, but capacity above 50 kWh usable earns zero additional STCs.

Dollar discounts by battery size (May–Dec 2026 vs Jan–Jun 2027)

The table below shows the exact STC count and estimated dollar discount at the current open-market spot price ($39.65/STC) for common usable battery sizes installed between 1 May and 31 December 2026 (factor 6.8), compared with waiting until January–June 2027 (factor 5.7):

Want to test a different battery size or STC price? Enter your exact spec sheet number into our home battery rebate calculator, or see how these discounts affect installed system prices in our 2026 Australian home battery price guide.

VPP capability vs actually joining a VPP

One of the most common points of confusion in solar quotes is the Virtual Power Plant (VPP) requirement. Here is the official distinction from DCCEEW:

• On-grid batteries must be VPP-capable: If your battery is connected to the grid (or is an off-grid system located within 1 km of the grid), the battery and inverter must have the technical ability to connect to the internet and respond to remote VPP signals. Almost all modern batteries on the CEC approved list meet this requirement.
• You do NOT have to join a VPP for the federal discount: Participation in a VPP is completely optional under the federal Cheaper Home Batteries Program. You can take the federal upfront discount and run your battery purely for your own household self-consumption.
• When joining a VPP IS required: Only if you want to claim an additional state or retailer incentive on top — specifically the WA Residential Battery Scheme (where joining Synergy or Horizon Power's VPP is mandatory), the NSW PDRS VPP incentive, or a South Australian REPS VPP credit.

How the STC factor steps down every 6 months until 2030

Before May 2026, the battery STC factor stepped down once a year. Under the amended regulations, it now drops every six months on 1 January and 1 July to track declining battery hardware costs until the scheme ends in December 2030:

Crucial timing rule: Your STC factor is locked in by the date your battery is installed and certified as complete, not the date you sign a quote or pay a deposit. If you sign a contract in December 2026 but the installer fits the battery in January 2027, you get the 5.7 factor (about 16% fewer certificates).

Can you stack the federal discount with state rebates?

Yes — the federal Cheaper Home Batteries discount stacks with any open state, territory or retailer VPP incentive. As of 24 October 2026, here is what stacks on top in each state:

• Western Australia: Stacks with the WA Residential Battery Scheme — up to $1,300 (Synergy) or $3,800 (Horizon Power) at 10+ kWh usable (minimum 5 kWh), plus optional no-interest loans up to $10,000 for household incomes under $210,000. VPP participation is mandatory.
• New South Wales: The old upfront NSW battery installation discount ended on 1 July 2025, but you can stack the NSW PDRS VPP connection incentive on top of the federal discount (paid by accredited VPP providers on capacity up to 28 kWh).
• South Australia: The old SA Home Battery Scheme closed in September 2022, but households can stack a VPP connection incentive under the Retailer Energy Productivity Scheme (REPS) through participating energy retailers (varies by retailer and concession status).
• ACT: Stacks with low-interest (3%) finance under the Sustainable Household Scheme (up to a $20,000 household lifetime loan limit).
• Victoria, Queensland, Tasmania & Northern Territory: No state or territory battery grant or loan is currently open (Solar Victoria's battery loans, QLD's Battery Booster, Tasmania's Energy Saver Loan Scheme, and the NT Home and Business Battery Scheme are all closed). Households in these states receive the federal Cheaper Home Batteries discount only.

Check your combined federal and state estimate in our rebate calculator, or test whether a battery pays back on your electricity tariff in our battery payback calculator.