Starting 1 July, the NSW government’s Peak Demand Reduction scheme, which aims to reduce peak electricity demands, will end support for battery installations. Instead, it will be replaced with the federal government’s Cheaper Home Batteries Program – an election promise of $2.3 billion that covers around a 30 per cent discount on the upfront cost of installing small-scale battery systems for households and businesses.
The state government’s reduction scheme currently allows NSW consumers to access a rebate of up to $2400 to purchase a battery for their rooftop solar system, and there have been 11,400 battery installations across the state since November.
However, the state government said that the new federal government scheme would offer a higher discount for consumers, and support for battery discounts will end to ensure consumers cannot stack two battery schemes together.
Instead, funding for the Peak Demand Reduction Scheme will be redirected to increasing the incentives for the Virtual Power Plant (VPP) part of the scheme that enables people to share solar energy with each other.
Households are being offered up to $1500 to install and connect their solar home batteries to a VPP, and consumers can claim six years’ worth of incentives upfront for this.
But if you read between the lines…
However, the renewables community advocacy group Solar Citizens is calling on the NSW government to reverse its decision, calling the decision “premature” and a “betrayal”.
Chief executive Heidi Lee Douglas says that this was “a blow to solar homeowners planning to buy a home battery in the coming months and a betrayal of the Prime Minister and Federal Minister for Climate and Energy, Chris Bowen’s assurance that the federal Cheaper Home Batteries program can be “stacked with state initiatives.”
Douglas added that the federal government’s rebates were to make the transition easier and this backstep would instead make the transition harder.
“The NSW government’s own Net Zero Commission says the state will not reach its target to reduce emissions by 50 per cent by 2030 or 75 per cent by 2035.
“The NSW Premier has put taxpayers on the hook for as much as $450 million for this extension through a sweetheart deal with Origin Energy.
Douglas also points out that the timing of the initiative lined up with the state government offering to subsidise “any extension of the life of the Eraring coal-fired power plant to 2029.”
“This bizarre decision puts the timely closure of the Eraring coal-fired power plant at risk. A key justification for extending the life of the plant was the lack of energy storage.”
Yet at a time when the state needed a greater influx of home battery storage to safely kick the Eraring coal-fired power plant out of the system, instead, the NSW government is backing big energy companies and increasing carbon pollution, Douglas said.
She argues that if the coal-fired power plant were extended, the government would be “directly responsible for up to 12 million tonnes of carbon emissions being released over two years.”
Other states are keeping faith
Other states are holding up Albanese’s agreement that the federal program can be stacked with state rebates – including Western Australia. WA solar owners will be able to receive both federal and state battery subsidies starting 1 July.
The updates to the NSW government’s new scheme will also include new rules and bans on door knocking campaigns that promote and sell energy-efficient upgrades and demand reduction upgrades related to the old scheme. This would also include the state government’s Energy Savings Scheme, which is currently reviewing feedback from community consultation on potential changes. These changes will come into effect in August 2025.
Every other state is rejoicing
News of the federal government’s program coming into play has otherwise been met with excitement. The Climate Council claims that one in two Australians are seeking to install a household battery alongside a new or existing rooftop solar system – according to their latest report, Battery Boom: Supercharging Australia’s Renewable Rollout.
The organisation says adding two million more household batteries will save consumers more than $4 billion a year on power bills. There are also more than 20 gigawatts of big battery storage in the pipeline – which is double from last year.
State wise, it seems like South Australia is leading the country overall, with Western Australia leading in big batteries, boasting eight projects connected to the grid, and Victoria installing the most community batteries in the country at 140. The Northern Territory is also in the lead for household battery uptake, with 15.9 per cent of all homes now having solar with batteries.
The NSW government was noticeably absent from the array of compliments from the organisation.
“Installing more batteries means more gigawatts of renewable energy we can store. The return on investment for communities: lower bills, less climate pollution from polluting coal and gas, and a more resilient grid.”