Program governance

The Program will commence on 1 July

The Cheaper Home Batteries Program (the Program) will apply to batteries that are installed on or after 1 July 2025. This allows the department time to establish the necessary regulatory framework to support the successful delivery of the Program.

The Clean Energy Regulator (CER) is developing the verification arrangements to ensure that administrative processes are in place to manage applications for small-scale technology certificates (STCs) under the Program. This is critical work to be undertaken prior to commencement.

This period also provides time for:

• industry to prepare and ensure that accredited products and installers are ready for the Program, including compliance with electrical safety and consumer protections required under the Small-scale Renewable Energy Scheme (SRES)
• state and territory regulators to prepare for commencement and ensure information is made available to consumers about the Program.

Expanding the SRES to include battery systems

The SRES is a legislated, tried-and-tested scheme with an established regulatory framework that has provided consumer protection and safety measures for other small-scale renewable energy resources such as rooftop solar photovoltaics (PV).

The regulatory and compliance framework relies on a combination of state and territory safety requirements as well as measures specific to the SRES. This includes:

• The requirement that the products be on the Clean Energy Council’s (CEC) approved product lists
• training and accreditation of installers
• Tools to reduce regulatory burden and collect mandatory information
• An inspection program.

These measures will be leveraged to apply to batteries under the expanded SRES, while leaning on the CER’s extensive regulatory experience in small-scale renewable technologies.

Eligibility

The information presented here is subject to change, and this should be taken into account before any activity is undertaken in advance of amendments to the Renewable Energy (Electricity) Regulations 2001.

Eligibility for the discount will only apply when the scheme commences, which is proposed to be from 1 July 2025, subject to the amendment regulations being approved and in place.

Restrictions in the Program

Support will be provided for one battery system at a single premises and only for the first time a battery system is installed, added to, or replaced.

A ‘battery system’ in the policy paper includes both pre-assembled battery system equipment (battery) and pre-assembled integrated battery energy storage system equipment (BESS) as defined in the Best Practice Guide: Battery Storage Equipment – Electrical Safety Requirements (2018). This could include:

• a single battery comprising a standalone unit, or a system of modular batteries connected to serve as one unit
• a single battery energy storage system that comprises the battery or batteries (where it is a modular system), their related components and the inverter.

This could be installed at the same time, or additional battery units or components could be added later. Eligibility under the Program will depend on whether a battery system has been previously installed and received support under the Program. For inverters, multiple configurations are possible, which include using existing hybrid solar inverters, a separate battery inverter or an inverter built into the battery. All possible configurations of inverters are covered under the definition of a battery system.

The following scenarios are eligible for support under the Program:

• Installing a new battery system at a premises without an existing battery system.
• Adding to an existing battery system that has not previously received battery support under the Program to increase capacity.
• Replacing an existing battery system at the premises that did not receive support under the Program.

Definition of ‘a premises’ under the Program

The Renewable Energy (Electricity) Act 2000 defines ‘a premises’ as a:

1. structure, building or vehicle
2. a place (whether enclosed or built on or not)
3. a part of a thing referred to in (i) or (ii).

A premises for the purpose of battery installations will exclude a vehicle.

Eligibility for STCs in relation to battery installations under the Program will apply to the owner of the battery at the premises. This may include embedded networks where there are several owners each residing in their own unit (premises) in a communal environment such as a retirement village. The CER will provide further guidance similar to existing advice on small generation units and power stations.

Difference between nominal and usable capacity

The nominal capacity is the maximum amount of energy a battery can store at full charge, while the usable capacity of the battery is the amount of energy that can be discharged from a battery and represents the power that a home or business can draw from the battery.

Requirements for solar PV systems

Battery systems must be installed with either an existing or new solar PV system (that is less than 100 kW in capacity as eligible under the SRES). Battery systems installed without solar PV (which solely store energy from the grid) will not be eligible. This is to support storing excess solar energy during the day to provide for peak evening electricity needs.

The Program will enable the creation of STCs for a battery system that is installed with existing solar PV, or where a battery system and new or replacement solar PV are installed together.

Minimum size and threshold for eligible battery systems

An eligible battery system must be in the range of 5 kWh to 100 kWh in nominal capacity (whether it is a new battery or additional capacity). Systems up to 100 kWh in total nominal capacity are only eligible for STCS for the first 50 kWh of the new or added usable capacity.

STCs will be provided for the new usable capacity installed, or the additional usable capacity that is installed where there is an existing battery (provided the existing capacity has not previously received STCs).

The average household may consume anywhere from 12 to 30 kWh a day (with 70% of that during peak evening periods) requiring batteries ranging in size from 8.4 to 21 kWh. Smaller batteries may be stacked to achieve the minimum 5 kWh nominal capacity threshold. Where modular batteries are combined as one battery system, the combined capacity of the system would need to be at least 5 kWh (even if the individual units are smaller) and not exceed 100 kWh in nominal capacity.

Extending STC eligibility to 50 kWh reflects a broad spectrum of household needs but also provides support for businesses and community groups who may require bigger batteries.

Definition of on-grid and off-grid batteries

Batteries that are installed on-grid and off-grid are supported under the Program, provided they meet the accreditation and other eligibility criteria. A battery system (including inverter) that is installed on-grid must be VPP capable, while a battery system installed off-grid does not need to be VPP capable.

An on-grid battery is a battery connected to an electricity grid (including the National Electricity Market and smaller networks including micro-grids). The definition of ‘off-grid’ will align with the current definition applied to ‘off-grid small generation unit’ in s23B of the Renewable Energy (Electricity) Act 2000:

• at least 1 km from the nearest main-grid line; or
• where it is less than 1km from a main-grid line but the owner has provided written evidence from the local network service provider that the total cost of connecting the battery system is more than $30,000 making it uneconomic to connect the unit to the main-grid.

When a battery system is considered ‘installed’

Battery systems ‘installed’ on or after 1 July 2025 will be eligible to create STCs under the Program. A battery system is considered ‘installed’ by meeting all installation and evidentiary requirements.

Under existing requirements for ‘small generation units’ such as solar PV, installation requires:

• testing the capacity of the solar PV to generate and deliver electricity
• confirming the installation has met state or territory electrical safety regulations
• issuance and signing of the certificate of electrical safety (in its state or territory equivalent).

For batteries, installation will need to test that the battery system can store excess energy from the solar PV and of discharging it to the premises and the grid (for on-grid batteries). The date of issuance of the certificate of electrical safety (in its state or territory equivalent) is the date the system is considered ‘installed’. The date of issuance of the certificate of electrical safety (in its state or territory equivalent) is the date the system (whether off or on-grid) is considered ‘installed’.

Approved batteries and inverters

The battery system will need to be accredited under the CEC’s Battery Assurance Program (commonly called the CEC approved battery list) to receive support. The CEC approved battery list includes lithium-based batteries that meet Australian standards and industry best practice requirements and are independently tested to confirm they meet electrical safety and quality standards.

The battery inverter will need to be accredited on the CEC’s list of compliant inverters that are approved for installation under the Small-scale Renewable Energy Scheme (SRES) to receive support. This list includes solar, hybrid and battery specific inverters that are eligible under the scheme. The CEC’s approved battery list contains some batteries that include the inverter as part of the approved battery energy storage system. This list is dynamic and will be updated over the life of the Program.

In instances where batteries and inverters are on the CEC approved product list due to false or misleading information, or where they present a risk to the integrity of the scheme, the CER will have the authority to deem them as ineligible.

Similar requirements will be applied to off-grid batteries, where they differ in substance and make to batteries that are installed on-grid.

Eligibility of existing solar PV components removed from the CEC list

If the existing solar PV system has components that are no longer on the CEC’s list but were listed at the time of installation and those components (such as the inverter) will be used for battery, the battery installation will be eligible provided the battery meets other Program requirements. This would apply in situations where the product is no longer listed as the model has been updated for example.

However, if there are components that have been delisted for safety or other concerns subsequent to the solar installation and those components such as the inverter would have been used for the battery installation, the battery system would not be eligible for STCs under the SRES. The battery installation will need to be installed with components that meet accreditation requirements as well as other installation and electrical safety requirements under the SRES.

Defining ‘VPP capable’

In addition to being on the CEC approved product list, battery systems installed on-grid must be capable of being coordinated through a virtual power plant (VPP). This includes capacity to connect to the electricity grid, respond to signals from third party VPP operators, and maintain ongoing internet connection.

Additional requirements may be developed to ensure ‘VPP capable’ reflects technical and consumer expectations including over time.

Under the Program, a battery system is not required to participate in a VPP but must have the capability to be operated as part of a VPP. As such, installers and designers would advise system owners on the requirements that would need to be met to participate in a VPP to assist decisions on whether to participate in a VPP. As such, installers and designers would advise system owners on the requirements that would need to be met to participate in a VPP to assist consumer decisions on whether to participate in a VPP.

Off-grid battery systems would not be required to be capable of connecting to a VPP. However, battery systems on the CEC approved list that are VPP capable may be suitable for off-grid installations.

Eligibility of portable and electric vehicle batteries

Neither portable batteries nor electric vehicles will be eligible under the Program. Eligibility for the Program applies only to batteries that are on the CEC approved list, connected to or installed with a solar PV system at a premises, and installed by an accredited installer in accordance with state and territory electrical safety regulations.

‘Appropriately sized’ batteries

The regulation amendments will not prescribe a method for determining an ‘appropriately sized’ battery. Due consideration should be given to the needs, context, and energy profiles of different premises when installing a battery system. This should be clearly communicated to the consumer when recommending or installing a system.

Before opting to add, or upgrade a battery system, or to add, upgrade or replace a solar PV system consumers should also refer to available independent advice including the Solar Consumer Guide to support their consideration of an ‘appropriately sized’ battery and or solar PV under the expanded SRES Program.

Calculation of the discount and small-scale technology certificates

Accessing the discount

The SRES is designed so that consumers can choose to receive the discount at the point of installation by assigning over their right to create small-scale technology certificates (STCs). Where the consumer chooses to assign the STC creation rights to designers and installers, much of the administration, including that of applying for and creating STCs, will be performed by designers and installers.

The discount is typically included in the retailer or installer’s quote. The consumer should be provided with information on the upfront discount being provided through the SRES. This information should be clearly displayed against the price of the system.

Consumers can also choose to retain STC creation rights, directly apply to the Clean Energy Regulator for the STCs, and to sell STCs in the open market or the STC Clearing House that would act as a rebate on the battery.

STCs calculation

The discount is calculated in proportion to the size of the battery system (its usable capacity in kWh). The number of STCs that can be created per battery installation will be 9.3 STCs per kWh of usable capacity in 2025, to be applied at a flat rate for usable capacity of up to 50 kWh. In instances where usable capacity results in a partial STC total, STCs should be rounded down in line with the regulations for solar, wind, and SGU STC calculation.

It is assumed that each STC is worth $40, which is the price of STCs traded in the STC Clearing House, though this may not reflect the value of STCs paid to the consumer after administrative costs are included.

The number of STCs that a battery system would be entitled to would decline from 9.3 STCs (worth around $372 a kWh) in 2025 to 4.7 STCs in 2030 (worth around $188 a kWh), in line with expected decline in the cost of batteries over time. Batteries with a capacity larger than 50 kWh and up to 100 kWh can still receive STCs, up to and including 50 kWh of its usable capacity, but not beyond.

The estimated value per kWh is approximate and based on $40 per STC for a battery installed in the year. This could vary over time in line with reviews of whether the discount remains appropriate.

Compliance, consumer protection and safety

Ensuring compliance and electrical safety

The Australian Government is committed to ensuring battery systems supported under the Program are safe and installed properly. The SRES contains safeguards for consumers in the form of established certification and compliance frameworks. This ensures that products and installers meet industry accreditation requirements, and systems comply with relevant state and territory law including electrical safety.

As with solar, the regulator will apply strict standards on where and how batteries are installed, ensure certification of installation businesses with the skills, training, and accreditation to install batteries safely.

The regulator also has an established inspection program that will expand to inspect installed battery systems and will refer any issues identified to the state and territory regulators responsible for electrical and safety regulation.

Compliance and consumer protection measures include:

• battery installations must be undertaken by or with supervision on site from an accredited battery installer under Solar Accreditation Australia (SAA)
• the battery and the installation complies with relevant state and territory law, including electrical safety regulations
• installation must comply with Australian Standards and Best Practice Guide: Battery Storage Equipment
• written statements, evidence and documents from the designer, retailer and installer are provided to the system owner and to the regulator
• supporting informed decision making through information including in the Solar Consumer Guide published on the department website
• extending enabling powers of the regulator over batteries and expanding the inspections program to cover batteries.

These requirements aim to ensure:

• the products are safe and meet standards for electrical safety
• the people designing, selling and installing the battery system are qualified and accredited, and have installed the battery in accordance with electrical and technical requirements set by the state or territory.
  Existing measures to inform consumer decision making, including the information to be provided by the retailers that apply to the sales of solar PVs, will be extended to batteries.

As with all consumer contracts, state and territory fair trading laws will also apply to battery systems purchased under the program. The CER will continue to work with state and territory fair trading and consumer authorities and the Australian Competition and Consumer Commission (ACCC) with respect to any consumer issues raised.

Miscellaneous

Minimised waste through the Program

Minimising waste that ends up in landfill as homeowners and businesses seek to replace or update existing solar PV systems and batteries is an important consideration of the Program.

Product stewardship and recycling are key ways to minimise waste. The department has stewardship schemes in place to manage the lifecycle impacts of different products. While a targeted solar PV and battery stewardship scheme will not be in place by the time the Program commences, this is something the department is investigating. In the meantime, it is important that industry recommends solar PV and battery systems (and replacements) that are appropriate for needs of the system owner.

This will also be critical to minimising perceived financial ‘wastage’ on the part of consumers who may want to upgrade part of their systems as part of the Program. Assessing the age and capacity of existing solar PV or batteries before replacing under the SRES will help inform consumer decision making and minimise perception of ‘lost’ investment. Installers should consider consumer needs and provide advice on the sizing of the battery relative to the solar PV and electricity needs.

Further advice on whether it is appropriate to remove existing systems that are operating effectively and if removing an existing system will impact eligibility for additional STCs for replacement solar under the SRES should also be provided.

Before opting to add, upgrade, or replace a solar PV system, refer to the regulator’s advice on STC eligibility for these systems.