The Australian government is reportedly exploring additional modifications to its Cheaper Home Batteries Program, including the possibility of an early wind-up, as the government seeks budget savings ahead of the May federal budget.
According to reports in the Australian Financial Review (AFR) this week, the government departments are currently modelling several options for the AU$7 billion (US$4.91 billion) programme, which provides rebates of up to 30% for household and business battery installations.
The options under consideration include winding up the programme early, reducing the discount level, or further limiting the size of batteries eligible for subsidies.
The report notes that the modelling exercise reflects broader government efforts to identify spending cuts across departments, with Treasurer Jim Chalmers under pressure to deliver savings in the upcoming budget.
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However, a government source familiar with the proposals told AFP that ideas modelled by the public service would not necessarily be adopted by cabinet, and maintaining existing settings remains the most likely outcome given the scheme’s popularity.
The Cheaper Home Batteries Program has experienced remarkable uptake since its July 2025 launch, with more than 250,000 installations delivering 6.3GWh of distributed energy storage capacity across households, small businesses and community organisations.
The rapid adoption has been a significant boost to Labor’s renewable energy transition goals, supporting the government’s target of achieving 82% renewable energy by 2030.
Energy-Storage.news has reached out to the Department of Climate Change, Energy, the Environment and Water (DCCEEW), which administers the Cheaper Home Batteries Program, and will update the article accordingly.
Previous modifications and cost blowouts
The programme has already undergone one major revision in December 2025, following its popularity and policy design, which caused costs to balloon from the original AU$2.3 billion estimate to more than AU$11 billion.
The December changes, which take effect on May 1, included closing a loophole that allowed homeowners to install oversized batteries at costs similar to those of appropriately sized systems. These modifications were accompanied by a new AU$5 billion funding allocation, bringing the revised total cost to AU$7.2 billion.
The expanded funding framework targets an additional 40GWh of energy storage capacity, potentially serving around 2 million people through home battery installations. Under the revised structure implemented from May 1, systems receive differentiated support levels based on capacity tiers: full Small-scale Technology Certificate factors apply to capacity from 0kWh to 14kWh, reduced 60% factors for 14kWh to 28kWh, and 15% factors for 28kWh to 50kWh.
The programme operates through the Small-scale Technology Certificate mechanism, supporting systems with capacities ranging from 5kWh to 100kWh for residential, community, and small-business applications.
Climate Change and Energy Minister Chris Bowen has regularly highlighted the scheme’s benefits, noting that batteries help households store cheaper, cleaner energy generated during daylight hours for use during expensive evening peak periods, reducing both grid pressure and reliance on costly generation sources.
Political pressure and criticism
The potential for further changes comes amid intensifying political pressure over the programme’s costs and beneficiaries.
The Coalition has criticised the scheme as primarily benefiting wealthier Australians who can afford the upfront costs, while remaining inaccessible to lower-income households.
The opposition abandoned its net zero commitment in November and has since escalated criticism of Labor’s energy and climate policies, arguing they impose unnecessary costs on households and businesses already facing cost pressures.
Similar scrutiny has been applied to the government’s electric vehicle tax incentive, which the Parliamentary Budget Office estimates could cost up to AU$23 billion in foregone revenue over the next decade.
Despite political criticism, the Cheaper Home Batteries Program remains highly popular, particularly among Australia’s more than 4 million households with rooftop solar installations.
Speaking at the All-Energy Australia 2025 conference in November, Carl Binning, executive general manager at the Clean Energy Regulator, said that roughly 8,000 Cheaper Home Batteries Program applications per week were being processed.
The consideration of further changes just two months after the December adjustments signals the breadth of the government’s cost-cutting efforts as it seeks to balance popular renewable energy policies with fiscal constraints ahead of the federal budget.
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