If you’ve been quoted for a home battery system recently, you’ve probably seen a line item for “STC rebate” or “government incentive” that knocks a few thousand dollars off the price. Nice bonus, right?

Here’s the thing most people don’t realise: that rebate is about to change significantly. From May 2026, the way Small-scale Technology Certificates (STCs) apply to batteries is getting restructured. Depending on the size of the battery you’re looking at, you could be looking at a noticeably smaller discount if you wait.

Let me explain how it all works, what’s changing, and why the timing of your purchase actually matters.

What Are STCs and How Do They Work for Batteries?

Small-scale Technology Certificates (STCs) are the federal government’s main incentive mechanism for renewable energy systems. They’ve existed for years for solar panels, and were extended to batteries through the Cheaper Home Batteries Program.

Here’s the simple version: when you install an eligible battery system, you earn a certain number of STCs. Each STC has a market value (currently trading around $38–$40 each). Your installer typically handles the STC claim and gives you the value as an upfront discount on your system price.

The number of STCs you get depends on two things:

  1. The battery capacity (measured in kWh)
  2. The STC multiplier (currently 8.4 STCs per kWh)

The Current Rate: 8.4 STCs per kWh

Before May 2026, the calculation is straightforward:

STCs = Battery capacity (kWh) × 8.4

So for a 10kWh battery:

For a 13.5kWh battery (like a Tesla Powerwall 2):

That’s a meaningful chunk of money off the install price. And right now, it applies at a flat rate regardless of battery size.

The Cheaper Home Batteries Program

The Cheaper Home Batteries Program is the federal government’s initiative that extended STC eligibility to household battery storage systems. Before this program, STCs only applied to solar panels, solar hot water, and heat pumps.

The program was designed to accelerate battery adoption and reduce pressure on the electricity grid during peak demand. More home batteries mean more households can store their solar generation and use it in the evening instead of drawing from the grid when wholesale electricity prices spike.

To be eligible, your battery system needs to:

The installer handles the STC paperwork in most cases. You don’t need to apply or register separately. The discount should appear on your quote as a line item.

What Changes in May 2026

Here’s where it gets important. From May 2026, the STC rate for batteries is moving to a tiered system, and the rate is being reduced for larger systems.

The key changes:

For batteries up to 28kWh: The STC rate will be reduced from the current 8.4 per kWh, but remains at a single (lower) rate. The exact new rate will be confirmed closer to the date, but modelling suggests it’ll drop to somewhere around 6–7 STCs per kWh.

For battery capacity above 28kWh: The rate drops further. This is specifically targeting large residential battery installations and is designed to better align the incentive with the actual grid benefit of household batteries.

Why the change?

The government’s rationale is two-fold. First, the original 8.4 rate was set to kickstart the market, and battery prices have come down significantly since the program launched. The incentive doesn’t need to be as large to make batteries financially viable. Second, the flat rate meant that very large battery systems (some residential installs are now 30–40kWh+) received proportionally large rebates that didn’t align with their grid benefit.

The tiered approach is meant to keep the incentive meaningful for standard household batteries (10–15kWh) while reducing the windfall for oversized systems.

A Worked Example: Why Timing Matters

Let’s run the numbers for a common scenario: a 13.5kWh battery installed in 2026.

If you install BEFORE May 2026:

If you install AFTER May 2026 (estimated new rate of ~6.5 per kWh):

Difference: approximately $975 less rebate.

For a larger 20kWh system:

Before May 2026:

After May 2026 (estimated):

Difference: approximately $1,482 less rebate.

And for a really large 30kWh system that crosses the 28kWh tier threshold, the difference becomes even more pronounced because the capacity above 28kWh gets the lower tier rate.

Should You Rush to Install Before May?

This is the $4,000 question (literally). And the honest answer is: it depends.

Yes, timing matters if:

Don’t rush if:

Important caveat: The STC claim date is based on when the installation is completed and the STCs are created, not when you sign the contract. If you sign in April but the install doesn’t happen until June, you’ll get the new rate. Make sure your installer can commit to an installation date before May.

How STCs Actually Get Claimed

Most people never deal with the STC process directly. Here’s how it typically works:

  1. Your installer quotes you a price that already includes the STC discount (it’ll be shown as a line item)
  2. They install the system and commission it
  3. They create the STCs through the Clean Energy Regulator’s REC Registry
  4. They assign (sell) the STCs, typically through a registered agent or the STC Clearing House
  5. They’ve already given you the discount upfront, so the STC sale reimburses them

The key thing to understand is that the installer is taking on the risk of the STC price. If the STC market drops between when they quote you and when they sell the certificates, that’s their problem, not yours. This is why some installers quote a slightly conservative STC value — they’re building in a margin for market fluctuation.

You can claim STCs yourself and sell them independently, but it’s complicated, slow, and usually not worth the hassle for residential systems. Let your installer handle it.

STC Market Price: A Variable to Watch

The STC value I’ve been using ($39) fluctuates. STCs trade on an open market, and the price moves based on supply and demand. The government sets a ceiling price of $40 per STC through the STC Clearing House, but the actual market price can be anywhere from $30 to $40.

In recent years, the price has been relatively stable in the $37–$40 range. But it’s worth knowing that the discount on your quote is based on the installer’s assumed STC value, and that value can change.

If you’re comparing quotes, check what STC value each installer is using. An installer quoting based on $35 STCs will show a smaller discount than one quoting based on $40 STCs — but the actual cash price you pay might be identical.

State-Based Rebates and Incentives

On top of federal STCs, some states offer additional battery incentives:

Victoria: Has had various battery rebate programs (Solar Victoria battery rebate). Check current availability — these programs have had caps and waitlists.

South Australia: The Home Battery Scheme has provided subsidies in the past. SA has one of the highest battery uptake rates in the country.

NSW: The Peak Demand Reduction Scheme provides incentives for battery installations that can reduce grid demand during peak periods. This is typically managed through your energy retailer or a network program rather than a direct rebate.

Queensland: Has had interest-free loan programs for batteries in the past. Check the current status of programs.

Other states: Programs vary and change frequently. Your installer should know the current state-level incentives for your area.

These state incentives can stack with federal STCs, making the total discount even more significant. But they also change frequently, have caps, and often run out of funding mid-year. Don’t assume they’ll still be available when you’re ready to install.

Beyond the Rebate: Does a Battery Actually Make Financial Sense?

Here’s the honest truth that rebate calculators won’t tell you: even with STCs, a home battery is still a long-term investment. The payback period for a typical 10–15kWh battery in 2026 is roughly 7–12 years, depending on your electricity usage, tariff structure, solar system size, and how much you self-consume.

The rebate makes the numbers better, but it doesn’t make a battery an instant money-saver. It’s not like solar panels, which typically pay for themselves in 3–5 years in most Australian locations.

That said, there are situations where a battery makes excellent financial sense:

If you’re considering going off-grid or setting up a serious battery storage system, you’ll need to think about more than just the rebate. System sizing, inverter compatibility, backup circuits, and load management all matter. I cover the full system design process in Off-Grid but Online, including how to size your battery bank, choose the right inverter configuration, and design a system that actually works year-round — not just in summer when the sun’s blazing.

The Bottom Line

Before May 2026: You get 8.4 STCs per kWh of battery capacity at a flat rate. For a standard household battery, that’s roughly $3,000–$5,000 off the install price.

After May 2026: The rate drops and becomes tiered, meaning less rebate — especially for larger systems. The difference could be $1,000–$2,000+ depending on battery size.

What to do:

  1. If you’re battery-ready, get quotes now and aim for installation before May
  2. Don’t rush into a bad decision just to save $1,000 on the rebate — a wrong battery choice costs a lot more than that
  3. Check your state-level incentives as well
  4. Make sure your installer includes a clear STC line item on their quote
  5. Confirm the installation timeline — the completion date matters, not the contract date

The rebate is a nice bonus, not the reason to buy a battery. But if you’re already planning to install one, the timing is worth getting right.

Make it count.

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