Solar and Battery Market Cools After New Rebate Changes
The federal government’s intervention in the Cheaper Home Batteries programme has significantly moderated an overheated market for both home solar and energy storage. Monthly installations of batteries plummeted from a record high in April to just 1.51 gigawatt-hours in May.
According to the latest figures from industry analysts SunWiz, the adjustments made to the national battery rebate scheme on May 1 resulted in an anticipated “comeback” from the frenetic activity seen in April when consumers rushed to take advantage of full rebates on larger batteries and the accompanying solar arrays required to support them.
Changing Landscape of the Battery Programme
For over a month, the federal Labor’s Cheaper Home Batteries programme has been operating under new guidelines. These include minor tweaks initiated at the beginning of the month alongside more substantial changes announced in December aimed at ensuring the programme’s longevity and effectiveness.
The rapid uptake of subsidized home batteries, with nearly 450,000 installations to date and average battery sizes approaching 50 kilowatt-hours (kWh) by March, proved to be unsustainable.
Under the new rules, households may now receive a full but slightly reduced discount for the first 14 kWh of a battery system’s usable capacity. For larger batteries, discounts stand at 60% on capacities from 14-28 kWh and a mere 15% on capacities from 28-50 kWh.
Market Adjustments and Installation Trends
The recent changes have already begun to yield noticeable results, as noted by SunWiz managing director Warwick Johnston. He described the decline in installation volumes as “the expected unwind from the pre-cliff rush rather than a genuine downturn.”
Johnston remarked that May’s energy storage metrics reverted to levels last seen in March, likely reflecting significant installations from April being registered late, combined with a sharp correction post-rush.
“With the new subsidy criteria now active, installers are shifting focus towards the sub-20 kWh segments, where growth appears to be emerging,” he explained.
Even with the slower growth trends, Johnston emphasised that new home battery installations are still surpassing historical averages, and potential registration delays may underrepresent May’s true figures.
Average battery size saw a slight drop to just under 38 kWh, although Johnston noted that systems of 40 and 50 kWh remain prevalent, despite a general retreat across all size categories from April’s extraordinary surge.
Solar Market Insights
Similar trends are being observed in the rooftop solar sector, which enjoyed a significant boost from the battery market in April, resulting in a record high of 442 megawatts (MW) of new small-scale photovoltaic (PV) capacity registered across the country—a remarkable 31% increase month-on-month, according to SunWiz.
However, in May, the market pulled back to 341 MW, marking a 22% month-on-month decline but still standing approximately 46% above installation rates from a year ago. Notably, Victoria was the only state to continue its growth trajectory.
Johnston also shared that the total for rooftop solar installations from January to May this year is the highest ever recorded, running about 36% ahead of the same period in 2025.
Looking Ahead
The impending reduction in rebates has driven demand for larger batteries and the requisite solar arrays forward into April, creating the record surge. Johnston reassured that May’s figures reflect a cooling off from that spike rather than an enduring slowdown, indicating that all categories and states remain well above figures from the previous year. Moreover, the Cheaper Home Battery Programme continues to amplify the growth of PV.
He concluded that the electrification of appliances and electric vehicles is likely to be the next phase of growth in this sector.
