The Clean Energy Regulator (CER) has unveiled its Quarterly Carbon Market Report for Q1 2025, expecting a strong year for carbon markets with new government incentives for home batteries, a pipeline of new renewable projects and the continuation of the reformed Safeguard Mechanism.
The CER said the biggest news for homeowners and small businesses is the new Cheaper Home Batteries Program, which will expand the Small-scale Renewable Energy Scheme (SRES) from 1 July 2025 to include small-scale battery systems.
This is expected to lower the cost of a typical battery by around 30 per cent, providing direct bill savings. When batteries are installed at scale, peak prices and broader system costs reduce, providing energy savings for everyone – not just those who install a battery. The CER said additional storage will also support the overall transition to a low carbon electricity grid.
The report found the SRES has strong safety and compliance processes, including the obligation to comply with relevant state and territory electrical safety requirements, which gives battery consumers confidence as they lower their energy bills and reduce their carbon footprint.
Under the Cheaper Home Batteries Program, eligible battery installations will create small-scale technology certificates (STCs) – as the SRES does with solar photovoltaic (PV) systems and heat pumps.
Because STCs equivalent to those created by batteries will be regularly purchased by the government, the costs are not expected to be passed on to electricity consumers.
CER Chair, David Parker, said the share of renewables in the electricity mix will continue to grow as new large-scale renewable developments come online and more rooftop solar is installed.
With 43 per cent renewables in the National Electricity Market, Q1 2025 has already set a record first quarter.
“The CER has so far approved a total capacity of 1.7GW of new wind and solar power stations that have reached first generation. With a further 1.2GW of applications received, the 2025 pipeline is healthy,” Mr Parker said.
In the newly reformed Safeguard Mechanism, as published by the CER on 15 April 2025, 142 facilities surrendered 1.4 million Safeguard Mechanism credit units (SMCs) and 7.1 Australian carbon credit units (ACCUs) to manage their excess emissions.
The CER said the Safeguard Mechanism is designed to work overtime to incentivise emissions reduction by large emitters to help meet Australia’s 2030 and 2050 emissions reduction targets.
The CER expects tightening baselines to reduce SMC issuances and increase total ACCU and SMC surrenders. The CER said this will also strengthen the incentive for facilities to identify, invest in, and deliver on-site emissions reductions.
Mr Parker said these market schemes working in tandem represented a robust and healthy carbon market.
Read the full report here.
