Verdict
No. The cost of installing a home battery is decreasing as more manufacturers enter the market and technology improves. Government subsidies are also helping to lower prices.
Analysis
Home battery systems were once considered a luxury purchase. As they are becoming more popular, with a range of government subsidies and improving technology, they are increasingly becoming accessible to more Australians.
A battery can store energy for use when your solar panels are not generating enough electricity (such as at night or when it is cloudy) or at times when electricity costs more. This reduces the amount of electricity you need to buy from the grid.
The extra benefit is battery systems also take the pressure off the electricity network during peak periods which helps to reduce energy prices for all consumers.
Popularity = lower costs
A key factor that is lowering battery costs is that they are becoming more popular in Australia and around the world.
While 75,000 new battery storage systems were installed in 2024 — up 47 per cent from 20231 – less than 5 per cent of the 4 million households with rooftop solar also have a battery installed.
Figure 1: Clean Energy Council – Cumulative number of batteries
As demand for home batteries increases, manufacturers can produce units in higher volumes, which typically lowers production costs. This reduction in cost is often passed on to consumers, making the systems more affordable.
This was seen when the small-scale renewable energy scheme was introduced, providing a financial incentive for solar panels. As demand increased and technology improved, production costs lowered. In under 20 years the cost of solar more than halved (see figure 2).
Figure 2: The fall in prices of solar since the introduction of the small-scale renewable energy scheme in 2012. (From Sunwiz – https://www.sunwiz.com.au/)
As the popularity of home batteries grows, and governments introduce more incentives it is expected that more manufacturers will enter the market, which intensifies competition. This often drives prices down as companies compete to offer the best value for consumers.
Government initiatives and subsidies
Like many new types of technology, batteries are supported by government schemes aimed at encouraging household uptake, increasing renewable energy and lowering electricity bills.
- New South Wales has the Peak Demand Reduction Scheme, offering upfront discounts on battery installations. Households can save up to $1,500 annually on energy bills with solar and battery adoption, and larger 13.5 kW batteries qualify for up to $2,000 in savings. Early indications are that this scheme has been successful in increasing take up across the state.
- The ACT Government has the Sustainable Household Scheme, which provides zero-interest loans of up to $15,000 for eligible households to install rooftop solar panels, battery storage systems, and other energy-efficient upgrades2.
- Victoria offers interest free loans of up to $8,800 or the installation of a solar battery system3.
- Western Australia plans to offer rebates between $5,000 and $7,500 depending on battery size and no interest loans4.
During the election campaign there has been policy announcements from Labor and an Independent candidate:
- In April 2025, the federal Labor government made an election commitment of a $2.3 billion “Cheaper Home Batteries Program” aimed at reducing the upfront cost of household battery installations by 30%. The program is designed to benefit a wide range of households, including those with moderate incomes, by making battery storage more affordable5.
- Independent Allegra Spender announced a ‘Permanent Energy Bill Relief Plan’ policy, which would introduce 10-year, zero-interest loans up to $25,000 for home energy upgrades like batteries, efficient electric appliances and insulation6.
- The Greens announced their electrification policy whereby households would be able to access a grant of up to $10,000 and low-interest loan of up to $20,000 to install battery storage as well, to maximise the benefits of rooftops solar.
These incentives are designed to make battery storage more accessible to households that may not have the upfront capital to invest in such systems. By reducing the initial financial barrier, these programs enable a broader segment of the population to benefit from renewable energy technologies.
Declining technology costs
The cost of installing home battery systems has been decreasing.
Batteries are following a similar trend as solar, which plummeted in cost as more solar is manufactured and installed worldwide.
For batteries, the cost reduction is related to three things:
- The price for lithium-ion batteries used for energy storage is now a fraction of what they used to be7.
Figure from ABC News, the falling price per kilowatt hour8.
- Improvements in manufacturing processes, particularly in China, have streamlined production, leading to reduced costs9.
- The prices of essential raw materials, such as lithium, have experienced significant drops, contributing to lower production costs for battery manufacturers10.
There are currently 555 approved battery models from 80 manufacturers11. With the introduction of additional government incentives it is expected that , more products and manufactures will enter the market. This additional competition will further drive down the costs of batteries.
Cost savings
When installing batteries, you need to look at the up-front cost and how much the battery will save you on electricity costs. When the amount you save each year equals the amount you spend on the system, this is called the payback period.
The payback period for home battery systems in Australia varies based on factors such as location, energy consumption patterns, and available incentives. Rewiring Australia report found adding a battery would generate about $900 in savings a year for the average household with solar and all-electric appliances.7
As of March 2025, the average payback period for a solar and battery system is approximately 8.3 years8.
Figure 2: Payback period for residential PV from ABC News14.
You can find out more about household batteries at Energy.gov.au
You can calculate your payback period on the independent website SunSpot.
Good news for everyone
Here is the good news story, even if you don’t have a battery. Increased battery adoption is good for everyone as it will bring prices down.
Home batteries allow homeowners to store excess solar power generated during the day for use at night which is typically when electricity is in of high demand and electricity prices are higher.
This means home batteries help all electricity consumers by:
- Reducing wholesale costs, by requiring less electricity when prices are high.
- Delaying the need for network investment.
- Better use of the distribution network by reducing evening peak use and soaking solar generation in the middle of day to avoid minimum demand events.
The Clean Energy Council analysis15 shows these wider systems savings could be as high as $190 million.
Conclusion
Home battery systems are no longer just for the rich. Through a combination of financial incentives and declining costs, battery storage is becoming a viable option for more Australians. As the costs continue to fall and government incentives increase, systems will become cheaper for everyone.
References
1 – ABC News (2025) The battery subsidy and all you need to know for your household. ABC News, 6 April. Available at: https://www.abc.net.au/news/2025-04-06/the-battery-subsidy-and-all-you-need-to-know-for-your-household/105138430
2 – ACT Government (no date) Sustainable Household Scheme. ACT Government. Available at: https://www.climatechoices.act.gov.au/policy-programs/sustainable-household-scheme
3 – Solar Victoria (no date) Solar battery loan. Government of Victoria. Available at: https://www.solar.vic.gov.au/solar-battery-loan
4 – Energy Policy WA (no date) WA Residential Battery Scheme. Government of Western Australia. Available at: https://www.wa.gov.au/organisation/energy-policy-wa/wa-residential-battery-scheme
5 – Australian Labor Party (2025) Labor to deliver one million energy bill-busting batteries. Australian Labor Party. Available at: https://alp.org.au/news/labor-to-deliver-one-million-energy-bill-busting-batteries/
6 – Spender, A. (no date) Energy bill relief. Allegra Spender MP. Available at: https://www.allegraspender.com.au/energy_bill_relief
7 – BloombergNEF (2023) Lithium-ion battery pack prices see largest drop since 2017, falling to $115 per kilowatt-hour. BloombergNEF. Available at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-see-largest-drop-since-2017-falling-to-115-per-kilowatt-hour-bloombergnef/?utm_source=semafor
8 – ABC News (2025) The battery subsidy and all you need to know for your household. ABC News, 6 April. Available at: https://www.abc.net.au/news/2025-04-06/the-battery-subsidy-and-all-you-need-to-know-for-your-household/105138430
9 – Our World in Data (2021) Battery price decline. Our World in Data. Available at: https://ourworldindata.org/battery-price-decline
10 – Reuters (2024) Lithium supply surplus set to stay with battery makers’ help. Reuters, 10 December. Available at: https://www.reuters.com/markets/commodities/lithium-supply-surplus-set-stay-with-battery-makers-help-2024-12-10/
11 – Clean Energy Council (2024) Home Battery Saver Program. URL: https://cleanenergycouncil.org.au/getmedia/51b67f74-01e5-4629-90f1-1a1ee1358051/home-battery-saver-program-public.pdf
12 – Rewiring Australia (2025) The electrification tipping point. Rewiring Australia, March. Available at: https://storage.googleapis.com/rewiring-aus-pdfs/The%20Electrification%20Tipping%20Point%20-%20Rewiring%20Australia%20-%20March%202025.pdf
13 – ABC News (2025) Household battery boom amid falling feed-in tariffs. ABC News, 19 March. Available at: https://www.abc.net.au/news/2025-03-19/household-battery-solar-feed-in-tariffs-energy-power/105063612
14 – ABC News (2025) Household battery boom amid falling feed-in tariffs. ABC News, 19 March. Available at: https://www.abc.net.au/news/2025-03-19/household-battery-solar-feed-in-tariffs-energy-power/105063612
15 – Clean Energy Council (2024) Home Battery Saver Program. URL: https://cleanenergycouncil.org.au/getmedia/51b67f74-01e5-4629-90f1-1a1ee1358051/home-battery-saver-program-public.pdf
