Cheaper Home Battery Program Reduction: What It Means for You in 2026
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 1 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 1 May 2026.
What Changes Are Being Made to the Rebate?
To make the Cheaper Home Batteries Program more sustainable over the long term, the government is updating how the battery rebate is calculated. From 1 May 2026, the program will shift to a tiered support model that varies depending on the size of the battery and the date it’s installed. These changes are designed to keep the discount at around 30% for a range of battery sizes, align with falling battery prices, and ensure the rebate remains available through to 2030.
Two key changes will take effect from 1 May 2026, subject to regulations being finalised:
1. STC Factor Reductions Over Time
The rebate is delivered through the creation of Small-scale Technology Certificates (STCs), which are issued based on the usable kilowatt-hour (kWh) capacity of the battery. The number of STCs a system is eligible for is determined by the STC Factor.
From May 2026, the STC Factor will:
- Decline more frequently (every 6 months instead of annually)
- Decline at a steeper rate, reducing the rebate amount over time
You can see the full schedule of proposed STC factor reductions below:
Source: Australian Government – Department of Climate Change, Energy, the Environment and Water
The rebate you’re entitled to is based on the STC factor at the time your battery is installed — not when you apply or receive a quote. This means timing your installation could make a significant difference in rebate value.
2. Tiered Support Based on Battery Size
Currently, all eligible systems up to 100kWh receive the same STC factor per kWh. Under the new structure, the rebate will scale down as battery size increases, applying different percentages of the STC factor across three tiers:
- 0–14kWh (inclusive):
Full 100% of the STC factor applies - >14kWh to 28kWh (inclusive):
60% of the STC factor applies - >28kWh to 50kWh (inclusive):
15% of the STC factor applies - >50kWh to 100kWh:
No additional rebate (capped at 50kWh of supported capacity)
This means if you installed a 98kWh battery system, you would get STCs on the first 50kWh and nothing on the remainder. If you Installed a 110kWh system then you would not be eligible for any rebates (as it would be over the permissible 100kWh limit).
This approach keeps the rebate proportional, discouraging over-sizing purely to maximise subsidy value while still supporting medium and large systems with some discount.
These changes, according to Energy Minister Chris Bowen, are designed to ensure the program continues to deliver value “right up to 2030 like we promised at the last election.”
How Does Battery Size Affect the Rebate?
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.
Why This Matters
Under the current system, all batteries up to 100kWh receive the same rebate rate per kWh — regardless of size. But under the new structure, larger systems will see their rebate taper off significantly. The government’s goal is to align support with typical residential needs and avoid over-subsidising systems that exceed household usage.
At the same time, this still allows homes with larger energy demands to claim a partial rebate on bigger systems — just with a steeper drop-off after 28kWh.
The new rules aim to ensure fairness, prevent overspending, and stretch the program’s budget to support more households over time.
Plan With the Cheaper Home Battery Program Timeline in Mind
The Cheaper Home Batteries Program has already helped more than 160,000 Australian households access battery storage, with the vast majority of those installations in suburbs and regional areas. Now, with a larger budget and a tiered structure in place, the scheme is set to continue — but in a more targeted, tapered format.
If you’re considering a battery for your home or business, it’s important to understand both the timing and the sizing implications:
- The install date determines what STC factor applies
- The system size determines how much of that factor you receive
While support will still be available through to 2030, the most generous terms are front-loaded, favouring earlier and smaller installations. That doesn’t mean you should rush — but it does mean planning matters.
To see how these changes could impact your installation — or to get tailored advice based on your energy usage and goals — reach out to our team. We can help you size your battery appropriately, explore eligible systems, and lock in your rebate while the current rates still apply. Contact Lenergy today to find out what your battery rebate could look like before the changes take effect.