The State and Federal governments are joining forces to boost the upfront incentive to almost $5000 for New South Wales households and small businesses to install a solar battery and connect it to a virtual power plant (VPP).
The Federal Government’s $2.3 billion Cheaper Home Batteries Program will provide a discount on the cost of installing small-scale battery systems, which is expected to reduce the cost of a typical installed battery by around 30 per cent – around double the current incentive available in New South Wales.
From 1 July 2025, the State Government will increase the incentive to up to $1500 to encourage more households and small businesses to install a battery and connect to a VPP. The incentive varies by the size of the battery, and will stack with the Federal Government’s battery rebate to unlock further savings and cost-of-living relief.
It means New South Wales households and businesses will be able to access double the current incentive for installing a battery (through the Federal program) and double the current incentive for registering it with a VPP (through the state scheme).
For example, if a household installs a typical 11.5kWh system, the combined support would be almost $5000. If the household installs a larger 27kWh battery – which can cost more than $30,000 without support – it will receive a discount of around $10,000 from the Federal program. If the household then connects the battery to a VPP, it will receive an upfront payment of almost $1500 from the New South Wales Government’s scheme.
The increased VPP incentive will replace the New South Wales home battery installation incentive, which has been doubled by the Federal program.
The State Government said its incentive for solar batteries has been a huge success, with more than 11,400 battery installations in six months.
Anyone with a compatible solar battery – including those installed under the New South Wales incentive since November 2024 – who has not yet taken up the VPP incentive will be eligible for the newly doubled incentive.
The Clean Energy Regulator is responsible for ensuring the safe installation of home batteries under the Cheaper Home Batteries Program, including the eligibility of products and accreditation of installers. The program builds on Australia’s well established and successful rollout of rooftop solar, which has seen more than four million solar installations and one-in-three homes harness sunshine for their power.
The New South Wales Government will continue working with stakeholders on future opportunities for the NSW Peak Demand Reduction Scheme, including considering what new activities could be incentivised.
Federal Minister for Climate Change and Energy, Chris Bowen, said New South Wales is world leading when it comes to generating rooftop solar power – and attaching more batteries to soak up the sunshine and store that energy will be good for bills and good for the grid.
“We’re working with the State Government to make sure more homes and small businesses can slash their bills by installing a battery and connecting it to a virtual power plant,” he said.
“The Federal and State Governments are teaming up to double the benefits available to New South Wales households and small businesses. We’ll help more people in the state access cheap, fast and safe solar energy in their homes and businesses night or day, when they need it.”
New South Wales Minister for Climate Change and Energy, Penny Sharpe, said, “We know the best benefit for the grid comes when these batteries are linked together, and New South Wales wants to be world-leading in encouraging households and small businesses to be a part of that.
“The State Government is working with the Federal Government to double the current benefit available when you install a solar battery and connect it to a virtual power plant.
“By increasing battery uptake we’re reducing demand on the whole grid, putting downward pressure on bills for everyone.”
