Solar Citizens CEO Heidi Lee Douglas explains why the new federal Cheaper Home Batteries Program is a game changer for household energy consumers, with some caution about the need for further information and protection around Virtual Power Plants. First published in Fifth Estate Thursday 3 July, 2025
Get ready for home batteries to become as widespread as rooftop solar and for Australia to become the global leader in home battery installation rates as well as solar.
With the start of the Cheaper Home Batteries program this month, offering around 30 per cent discount for behind-the-meter batteries from five to 100 kilowatt hour, home batteries will become more affordable and can save households up to $14,000 on energy bills over their lifetime.
For a household battery, the installed cost of a typical 10kWh battery should come down to as low as $5369, depending on the particular battery, equipment and installation requirements in each case [see Solar Citizens Analysis of household savings under the Cheaper Home Batteries program].
The lower upfront cost also brings payback periods down to between four and 7 and a half years, depending on location, which is much closer to the rate at which rooftop solar installations take off.
The 100 kWh batteries at the top of this scale are much above what any household might reasonably need, indicating that the scheme was also designed with small businesses with higher energy use in mind.
But it also opens up households to buying a larger battery, if their solar system generates much more energy than they need, so that they can supply that excess stored energy to the grid through a virtual power plant (VPP). Every battery that receives the federal home battery rebate must be “VPP enabled”.
Virtual power plants – consumer protection needed
Virtual power plants have the potential to democratise our energy system by turning homes into active energy producers – but this promise can only be realised if consumers are protected and provided with adequate information.
The Smart Energy Council highlights three principles essential to good VPP design - they must be:
- transparent - clear about how they make money and who gets what slice
- Accountable - to the people whose assets and trust they rely on
- consumer-centred by design, not an afterthought or compliance checkbox
Making stored solar energy from homes available to the grid will really shift us to a more distributed energy system and will mean households will play a significant role in “firming” the grid.
The Cheaper Home Batteries program was announced with a target of one million household batteries by 2030.
This aligns with modelling by the Australian Energy Market Operator (AEMO) that says we need 8 GW of consumer batteries installed by 2030 to help stabilise the grid and keep energy prices as low as possible during the clean energy transition.
State and territory impacts
Western Australia has the most generous offer, with New South Wales cutting its rebate while keeping a $1500 incentive for battery owners to join a Virtual Power Plant. Victoria, Tasmania the ACT and Northern Territory all offer loan schemes for home batteries:
Western Australia
The WA government’s Residential Battery Scheme, from 1 July, 2025, has changed but will still offer an additional rebate on top of the federal program, to take the total for each individual battery of 10kW up to $5000 for Synergy customers and $7500 for Horizon Power customers. As well as $10,000 interest-free loans for low and middle-income households to help with battery and solar installation costs.
New South Wales
From 1 July the NSW government recently announced it will no longer pay up to $2400 to subsidise the cost of a home battery under their Peak Demand Reduction Scheme, but it has doubled the size of the rebate for joining a virtual power plant (VPP). The payment for connecting a 27 kWh battery to a virtual power plant has the potential to increase from up to $800 before 1 July 2025, to up to $1500 from 1 July 2025.
Victoria
Victoria’s Solar Battery Loan provides up to $8800 in interest-free loans for battery storage. With the rebate from the Cheaper Batteries program, an average solar-connected Victorian household can pay off its battery cost through interest-free loan repayments.
Tasmania
Tasmania’s Energy Saver Loan Scheme provides interest-free loans of $500 to $10,000 to help households, landlords, small businesses, and community organisations purchase and install energy-efficient products and upgrades, including battery storage.
ACT
The ACT’s Sustainable Household Scheme offers a low interest loan with a 3% interest rate for up to $15,000 for household energy storage,, and other selected energy efficiency improvements. ACT offers zero interest loans for solar installations to eligible concession card holders under the Home Energy Support Program.
Northern Territory
The Northern Territory’s Home and Business Battery Scheme provides has reached its $6million funding allocation and is no longer available.
This article was first published in Fifth Estate on 3/7/2025: The revolution in home batteries around the country
Further reading:
Solar Citizens: Calculating Home Savings Under the Cheaper Home Batteries Program
Department of Climate Change, Energy, Environment and Water:
- Cheaper Home Batteries Program
- energy.gov.au - get to know solar/batteries