As of 30 June 2025, the NSW Government is suspending its battery installation incentive under the Peak Demand Reduction Scheme. However, a new federal program is launching to fill the gap, offering significant savings for homeowners and small businesses. NSW battery rebate suspension and the new federal Cheaper Home Batteries Program. Learn how to claim VPP rebates, compare incentives, and stay informed on energy storage savings.
Overview of NSW Battery Incentive
The NSW battery incentive, which will be paused after 30 June 2025, provided financial support for households and small businesses installing battery storage alongside existing solar systems. The program was designed to encourage energy storage adoption and help reduce peak electricity demand.
Key Features of the NSW Battery Rebate:
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Installation Discount: $1,600 to $2,400 off the cost of installing a battery for homes or small businesses with existing solar.
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VPP (Virtual Power Plant) Rebate: An additional $250 to $400 for connecting the battery to a VPP, which could be claimed twice over six years.
Why Was the NSW Battery Incentive Suspended?
The NSW Energy department has not publicly confirmed the exact reason for the suspension. However, industry experts suspect the pause is linked to potential conflicts with the upcoming federal battery rebate, aiming to streamline incentives and avoid duplication1.
Important Note:
While the installation incentive will be paused, the VPP rebate remains available for eligible batteries. This includes batteries that are on the approved list, have at least six years left on the manufacturer’s warranty, and have not previously claimed both VPP rebates. The VPP incentive will “nearly double,” according to official sources.
What’s Replacing the NSW Battery Incentive?
From 1 July 2025, the Federal Government’s Cheaper Home Batteries Program will take effect, providing broader support for battery installations across Australia.
Key Features of the Federal Program:
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Discount: Up to 30% off the cost of installing a home battery system.
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Targeted Support: Additional assistance for low-income and vulnerable households.
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Scheme Expansion: The Small-scale Renewable Energy Scheme (SRES) will now include batteries1.
This $2.3 billion initiative is a core part of the Albanese Government’s plan to achieve 82% renewable energy by 2030.
Can You Combine NSW and Federal Rebates?
Currently, stacking the NSW and federal rebates is not possible. The NSW installation rebate is suspended, and the federal program won’t start until July 2025. If NSW reactivates its program or launches a new one, stacking may become possible depending on eligibility.
What Should Households Do Now?
For those interested in battery storage, here’s what you should consider:
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Take Advantage of the Federal Rebate: Explore the new federal battery rebate launching in July 2025.
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Claim the VPP Rebate: If you already have a battery, ensure you claim the VPP rebate while it’s still available.
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Stay Informed: Keep an eye out for updates from the NSW Government regarding any new or reactivated programs.
Battery costs are expected to continue falling, and the federal scheme is likely to drive better deals, especially from approved VPP providers.
Detailed Breakdown: NSW vs Federal Battery Incentives
| Feature | NSW Battery Incentive (Until 30 June 2025) | Federal Cheaper Home Batteries Program (From 1 July 2025) |
|---|---|---|
| Installation Discount | $1,600–$2,400 | Up to 30% off |
| VPP Rebate | $250–$400 (claimable twice in 6 years) | Not specified |
| Eligibility | Homes/small businesses with existing solar | All households, extra support for low-income/vulnerable |
| Scheme Expansion | No | SRES now includes batteries |
| Total Funding | Not specified | $2.3 billion |
| Goal | Reduce peak demand | 82% renewables by 2030 |
How to Claim the VPP Rebate
If you already own an eligible battery:
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Ensure your battery is on the approved list.
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Check that at least six years remain on the manufacturer’s warranty.
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Confirm you haven’t already claimed both VPP rebates.
The VPP rebate can be claimed twice over six years, and the incentive amount is set to increase.
Future of Battery Incentives
The transition from state-based to federal incentives marks a significant shift in Australia’s energy policy. The federal government’s ambitious targets and increased funding are expected to accelerate the adoption of home battery storage, making renewable energy more accessible and affordable for all Australians.
FAQs
Q: Is the NSW battery rebate ending for good?
A: The installation incentive is suspended after 30 June 2025, but the VPP rebate remains available. The NSW Government may reactivate or launch a new program in the future.
Q: Can I claim both NSW and federal rebates at the same time?
A: No, currently, you cannot stack the NSW installation rebate with the federal rebate. If NSW reactivates its program, stacking may be possible depending on eligibility.
Q: Who is eligible for the federal battery rebate?
A: All households are eligible, with additional support for low-income and vulnerable households.