A significant change is on the horizon for households and small businesses in New South Wales (NSW) with the introduction of a doubled cash incentive for installing solar battery.
Beginning July 1, NSW residents will be able to access an enhanced $1,500 rebate, which comes as part of a broader federal initiative aimed at reducing energy bills and bolstering the power grid. This change represents a major shift in Australia’s efforts to make solar energy more accessible and sustainable for its residents.
The new incentive is set to replace the current state battery incentive scheme, which is due to end on June 30. The program aims to increase battery uptake and encourage the creation of virtual power plants—groups of connected solar batteries that allow stored energy to be sold back to the grid. This move could have a significant impact on the state’s energy landscape, offering financial relief while addressing grid reliability concerns.
New Incentive to Cut Energy Bills
From July 1, both households and small businesses in NSW will be eligible for the $1,500 rebate to install a solar battery and link it to a virtual power plant. This amount represents a major increase from the current $800 rebate, which has been available under the state government’s scheme. The transition to a federal program is designed to make solar battery installation more affordable while encouraging widespread adoption of energy-saving technologies.
Climate Change and Energy Minister Chris Bowen emphasized that the new initiative will not only lower energy bills for individual households but also improve the stability of the entire grid. The virtual power plants will help balance demand and supply, making energy distribution more efficient and cost-effective. By investing in more solar batteries, the government hopes to bring down energy costs across the board.
NSW’s battery rebate is suspended, but the Federal Government’s Cheaper Home Batteries Program starts July 2025, offering up to 30% off home battery installations for households and small businesses.
— Energy Matters (@energymattersau) June 10, 2025
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Virtual Power Plants Set to Play a Key Role
Virtual power plants (VPPs) are central to the NSW government’s strategy to improve grid reliability. These systems connect multiple households and businesses with solar battery, allowing them to pool their excess energy and sell it back to the grid. The energy generated can be used during peak demand periods, which helps reduce the pressure on traditional power stations.
NSW Minister for Climate Change and Energy Penny Sharpe highlighted that VPPs will be crucial in future-proofing the grid. By encouraging more people to install batteries, the government is not only helping individual consumers, but also strengthening the state’s overall energy infrastructure. The VPPs are expected to provide downward pressure on electricity bills, benefiting all energy users by reducing overall demand on the grid.
A Federal and State Partnership for Sustainability
The $1,500 rebate is part of a larger $2.3 billion federal initiative aimed at making solar energy more accessible to Australian households. This federal program, known as the Cheaper Home Batteries Program, will reduce the upfront cost of installing solar batteries by around 30%. When combined with the state’s new incentive, it will significantly reduce the financial burden on homeowners and businesses considering solar energy solutions.
Households installing a 6 kWh battery, for example, could qualify for a federal subsidy of approximately $2,232, in addition to the NSW incentive of around $444. For larger systems, like an 11.5 kWh battery, the combined federal and state rebates could total more than $5,000. This makes solar batteries much more affordable and appealing to a broader range of people. However, only 4.5% of the 4 million households with rooftop solar currently have batteries, indicating room for substantial growth in the adoption of these systems.
The End of the Current State Battery Incentive
The current NSW state battery incentive, which has been available since November 2022, is set to end on June 30. In the last six months alone, more than 11,400 batteries have been installed through this scheme, indicating a strong demand for energy storage solutions. However, the new federal rebate program promises to offer greater financial support and encourage even more installations.
The transition from the state to the federal program reflects the government’s commitment to reducing energy costs and increasing the uptake of solar energy technologies. The NSW government has actively worked to improve the affordability of home energy solutions, and the new, more generous rebates are expected to further drive the uptake of solar batteries.
As the deadline for the current state incentive approaches, residents and small businesses have a small window of time to take advantage of the existing benefits before the larger federal program kicks in. The change marks a key moment in Australia’s transition toward a more sustainable energy future, with solar batteries playing a central role in the shift toward renewable energy.
