On 13 December 2025, the Australian Government announced major adjustments to the Cheaper Home Battery Program (CHBP), a national subsidy designed to make battery storage more accessible for Australian households and small businesses.
Following unexpectedly high demand and rapid uptake, the program’s original $2.3 billion budget is being expanded to $7.2 billion over the next four years. The expansion is expected to support more than 2 million battery installations and deliver around 40 gigawatt-hours of new storage capacity by 2030.
To ensure the scheme remains financially sustainable and continues offering fair support across a range of battery sizes, the government will introduce a revised tiered rebate structure and updated STC (Small-scale Technology Certificate) factors from 1st May 2026.
This article outlines:
- Why the rebate is changing
- What the new structure will look like
- How different battery sizes will be affected
- What these changes mean for households planning an installation
All information is drawn directly from official government updates and public statements, including reporting from ABC News and the Department of Climate Change, Energy, the Environment and Water.
Why is the Federal Battery Rebate Changing?
When the Cheaper Home Battery Program launched in July 2025, it came with a $2.3 billion budget and a clear goal: to help more Australians access battery storage by offering an upfront rebate on eligible systems. The response was immediate and strong. Within six months, most of the original rebate funds had already been claimed.
Federal Energy Minister Chris Bowen described it as “a program of success and strength” noting the enormous enthusiasm from households and small businesses. However, ABC News reported that the level of demand allegedly raised concerns from within the solar and battery industries, with some warning of a potential “boom-bust cycle” if the scheme wasn’t adjusted to manage long-term sustainability.
In response, the government moved quickly. As part of the December 2025 mid-year budget update, an additional $5 billion was allocated to the scheme, bringing the total to $7.2 billion over four years. This expansion is expected to enable more than 2 million battery installations across the country by 2030, with a projected 40 gigawatt-hours of additional energy storage coming online.
However, the scale of that ambition also required structural changes. According to the government, the revised rebate model is designed to:
- Keep discounts aligned with falling battery costs over time
- Maintain fairness across small, medium and large battery systems
- Ensure support remains available until 2030, as originally promised
With those goals in mind, the government will introduce a new tiered rebate structure and adjust the STC factor, the mechanism used to calculate battery subsidies — beginning 1st May 2026.
The Two Key Proposed Changes From 1st May 2026
Subject to regulations being made, two major changes are expected to begin on 1st May 2026.
1. Faster Rebate Step-Down Over Time
Currently, the battery rebate reduces once per year.
From May 2026, the proposal introduces:
- Six-monthly rebate reductions instead of annual step-downs
- Adjustments expected in January and July each year
- A rebate structure better aligned with declining battery costs
STC factor changes from 2026 to 2030
| Year | Period | STC Factor |
|---|---|---|
| 2026 | Jan to Apr | 8.4 |
| 2026 | May to Dec | 6.8 |
| 2027 | Jan to Jun | 5.7 |
| 2027 | Jul to Dec | 5.2 |
| 2028 | Jan to Jun | 4.6 |
| 2028 | Jul to Dec | 4.1 |
| 2029 | Jan to Jun | 3.6 |
| 2029 | Jul to Dec | 3.1 |
| 2030 | Jan to Jun | 2.6 |
| 2030 | Jul to Dec | 2.1 |
What this means for homeowners:
Installing earlier could result in a higher rebate, even within the same year. Waiting longer may reduce the available discount.
2. Rebate Tapering Based on Battery Size
The second proposed change relates to battery capacity.
From 1st May 2026:
- Typical household-sized batteries will continue to receive strong rebate support
- Larger-capacity battery systems will receive a lower rebate per kilowatt-hour (kWh)
- Rebate support will gradually taper as battery size increases
This approach is designed to encourage households to choose right-sized batteries while keeping the program financially viable.
Key takeaway for larger systems:
If you’re considering a battery above approximately 14 kWh, installing before 1st May 2026 may result in a higher overall rebate compared to installing later.
What’s not changing
The Government update indicates these settings remain in place:
- The program continues to deliver a discount via Small-scale Technology Certificates (STCs) under the Small-scale Renewable Energy Scheme (SRES).
- The program continues to support battery systems up to 100 kWh (subject to eligibility rules).
- Batteries can be connected to new or existing solar PV.
- Consumers generally do not apply directly to the Government or the Clean Energy Regulator (CER) to receive the discount.
- The discount continues to be based on usable battery capacity and the number of STCs the battery is eligible for.
How Does Battery Size Affect the Rebate?
The program will continue to support battery installations up to 100 kWh. However, subject to regulations being made, the level of support for batteries will shift.
The discount calculations have been adjusted to align with declining battery costs, with the aim of maintaining around 30% discount for a range of battery systems at each capacity level.
The STC Factor will taper according to the amount of capacity installed:
- From 0 kWh up to 14 kWh (inclusive): STC Factor applied at 100%.
- Every kWh greater than 14 and up to 28 kWh (inclusive): STC Factor applied at 60%.
- Every kWh greater than 28 and up to 50 kWh (inclusive): STC Factor applied at 15%.
Let’s say you install a 30kWh battery:
- The first 14kWh gets 100% of the STC factor
- The next 14kWh gets 60% of the STC factor
- The final 2kWh gets 15% of the STC factor
If you install a 12kWh battery, the entire system qualifies for the full 100% STC rate, which may make smaller systems especially appealing for homeowners looking to maximise rebate value.
What households should consider next
Timing now matters more than ever. The STC factor is locked in on the installation date.
Households should focus on fit, not size.
- Match battery capacity to your usage profile
- Avoid oversizing purely for rebate value
- Model payback carefully for systems above 28 kWh
- Use accredited products and installers
When choosing a battery installer, it’s important to work with a trusted and accredited provider. Solar Secure is an SAA-accredited retailer, ensuring all battery systems are designed and installed to meet Australian standards, compliance requirements, and best-practice guidelines.
With Solar Secure, homeowners can feel confident they’re investing in reliable solutions backed by industry expertise and quality assurance.