Subsidy changes prompt battery installation collapse in Australia

The installation of household batteries in Australia has plummeted by more than 70 percent following significant changes to a multi-billion-dollar taxpayer-funded subsidy scheme. Official figures reveal a sharp decline in battery installations by small-scale consumers in May compared to the previous month.

This steep drop occurred after the federal government revamped the "Cheaper Home Batteries Program," scaling back the rebates available for larger battery systems. Data from the Clean Energy Regulator shows that just over 20,000 battery systems were installed in May, the month the new rules took effect, with a similar number in June. In contrast, April saw over 80,000 installations under the original, more generous terms.

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This often happens in solar industries when subsidies shift. You've brought forward a lot of customers that might otherwise have bought in an orderly fashion. They have all rushed to buy before that deadline. So you're actually going to have a quiet period afterwards. That's why it's called a solar-coaster.

Warwick Johnston, managing director of solar consultancy SunWiz, explained that much of the surge in demand leading up to April was artificial, pulled forward by the government's own deadline for scheme changes. He characterized the industry's demand fluctuations as a "solar-coaster," a common pattern when subsidies shift.

The Labor government's battery subsidy scheme, announced before the 2025 federal election, has been popular, with nearly 450,000 batteries installed to date. The government aims for two million installations by 2030. Initially, the subsidy covered about 30 percent of a system's upfront cost, intended to slash the price of a typical 10-kilowatt-hour battery by roughly $4,000. However, the original design allowed customers to claim much larger subsidies for bigger systems with minimal additional out-of-pocket expense, sometimes reaching $18,000 for a 50-kilowatt-hour system.

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The industry had figured out that the economies of scale that apply to these batteries meant that once you got past a certain point, certain size, then the subsidy was funding a very large portion of the subsequent capacity of the battery.