The New South Wales and federal governments have announced a significant boost to solar battery incentives for New South Wales households and small businesses, aiming to deliver nearly $5,000 in upfront benefits for a typical system and unlock long-term cost-of-living reductions.

Under the new measures, the Australian government’s $2.3 billion Cheaper Home Batteries Program will provide a discount of around 30 per cent on the cost of installing small-scale battery systems.

This effectively doubles the current incentive available to NSW consumers.

At the same time, the NSW government will almost double its own incentive for households and businesses that connect their solar battery to a Virtual Power Plant (VPP), with the incentive rising to up to $1,500 from 1 July 2025.

The total support for a typical 11.5 kWh battery system will be close to $5,000, while larger systems could see even greater discounts.

Virtual Power Plants are networks of solar-powered batteries that allow households and small businesses to generate ongoing revenue by selling excess stored energy to their communities during periods of high demand.

These systems not only provide financial benefits but also help stabilise the electricity grid, reducing the risk of outages and driving down electricity prices for all consumers while advancing progress towards Net Zero targets.

The increased VPP incentive will replace the NSW home battery installation incentive, which has now been effectively doubled by the Commonwealth program.

More than 11,400 battery installations have already taken place in NSW in just six months, highlighting strong consumer interest.

Anyone with a compatible solar battery installed since November who has not yet accessed the VPP incentive will be eligible for the newly doubled payment from July.

Minister for Climate Change and Energy, Chris Bowen, said: “NSW is world-leading when it comes to generating rooftop solar power – and attaching more batteries to soak up our sunshine and store that energy will be good for bills and good for the grid.

Bowen said the federal government is collaborating closely with the state government to ensure that more households and small businesses in NSW can cut their energy costs by installing batteries and joining Virtual Power Plants.

He added that by doubling the available incentives, both governments are making it easier for people across NSW to access affordable and reliable solar energy whenever they need it.

NSW Minister for Climate Change and Energy, Penny Sharpe, added: “We know the best benefit for the grid comes when these batteries are linked together, and NSW wants to be world-leading in encouraging households and small businesses to be a part of that.

“By increasing battery uptake we’re reducing demand on the whole grid, putting downward pressure on bills for everyone.”

The Clean Energy Regulator will oversee the safe installation of home batteries under the Cheaper Home Batteries Program, ensuring product eligibility and installer accreditation.

The initiative builds on Australia’s successful rollout of rooftop solar, with over four million installations nationwide and one in three homes now powered by solar energy.