If you’re considering solar or adding a battery to your existing solar system, battery rebates can help reduce the upfront cost of your investment.
In 2026, one of the biggest incentives available to Australian households is the Federal Government’s
Cheaper Home Batteries Program, which provides around 30% discount on eligible battery
systems connected to new or existing rooftop solar.
For NSW homeowners, there is also a Virtual Power Plant (VPP) incentive, which can provide
additional financial benefits when an eligible battery is connected to a participating VPP.
What is the Cheaper Home Batteries Program?
The Australian Government’s Cheaper Home Batteries Program was introduced on 1 July 2025 to make battery
storage more affordable for households and small businesses. The program provides around a
30% discount on eligible small-scale battery systems connected to new or existing rooftop solar.
Rather than homeowners applying directly for a government rebate, the discount is generally provided through
an eligible solar or battery retailer and installer. The program operates through the
Small-scale Renewable Energy Scheme (SRES). This means the value of the incentive is
generally reflected in your battery installation quote.
Why is this important?
Solar panels generate electricity during the day, but many households use more electricity in the evening
when solar production has stopped. A battery allows you to store excess solar energy during the day and use
it later, helping you make greater use of the energy your solar system generates. The Federal battery incentive can therefore make it more affordable to add storage to a new or existing
solar system.
What is the NSW Virtual Power Plant incentive?
A Virtual Power Plant, or VPP, connects multiple household batteries so that stored electricity can be managed
and supplied to the electricity grid when it is needed.
For eligible NSW households and small businesses, connecting a battery to a participating VPP can provide an
upfront NSW incentive, as well as the potential to receive ongoing payments or bill credits for energy
exported through the VPP arrangement.The amount available depends on factors including the battery capacity, VPP provider and the terms of the
agreement.
The NSW Government currently allows eligible batteries between more than 2 kWh and up to 50 kWh to participate
in the VPP incentive, with the incentive calculated based on usable battery capacity made available to the
grid, up to 28 kWh.
| Incentive | Who Can Get It? | Benefit | Can It Be Combined? |
|---|---|---|---|
| Federal Cheaper Home Batteries | Homeowners, businesses, and community organisations installing an eligible battery with solar. | Approximately 30% off the upfront battery cost. dcceew.gov.au energy.gov.au | Yes, can be combined with NSW VPP incentives. energy.nsw.gov.au |
| NSW Virtual Power Plant | Households that connect their battery to an approved VPP. | Additional incentive and/or ongoing payments depending on the VPP provider. energy.nsw.gov.au | Yes, can be combined with the federal battery discount. energy.nsw.gov.au |
Can you combine the Federal and NSW incentives?
Yes. This is one of the key benefits for NSW homeowners considering a battery.
An eligible battery can receive the Federal Government’s Cheaper Home Batteries Program discount and then
be connected to an eligible VPP to access the NSW Government’s VPP incentive.
The NSW Government specifically confirms that its VPP incentive can be combined with the Federal battery discount. This can significantly reduce the effective cost of installing a battery while also creating an opportunity
to earn ongoing income or bill credits through a VPP.
Who is eligible?
Eligibility depends on the specific program and system. For the Federal Cheaper Home Batteries Program,
eligible battery systems must meet the program requirements and be connected to new or existing rooftop solar.
Approved battery products and appropriately accredited installers are also important requirements.
For the NSW VPP incentive, your battery must meet the relevant capacity requirements, and you must connect
through a participating VPP provider. Your chosen VPP provider will assess your eligibility and explain the
terms of the arrangement.
| Item | Cost Example |
|---|---|
| Battery system price | $12,000 |
| Federal battery discount (~30%) | -$3,600 dcceew.gov.au energy.gov.au |
| Estimated price after discount | $8,400 |
| NSW VPP incentive | Additional savings/payment depending on provider. energy.nsw.gov.au |
What should you do before installing a battery?
Government incentives can make battery storage more affordable, but the cheapest battery isn’t necessarily
the best option for every home.
Before choosing a system, consider:
- Your current electricity usage
- How much solar energy you generate
- How much electricity you use at night
- Your battery storage requirements
- Battery warranty and expected lifespan
- Whether the battery is eligible for the relevant incentives
- Whether the system is compatible with a VPP
- The expected payback period
- Your installer’s accreditation and experience
At SCE Energy Solutions we can help you understand your solar and battery options, determine which incentives may apply to your
project and design an energy solution around your home’s individual requirements.
Thinking about adding a battery to your solar system?
Get in touch with
SCE Energy Solutions to discuss your options.
Government programs, eligibility requirements and incentive amounts can change. The information in this
article is general information only and should be confirmed with an accredited installer and the relevant
government program before making a purchase.