Australian budget sees renewed calls for battery subsidy scheme, local manufacturing

Battery subsidies may be absent from Australia’s federal budget for the 2025-26 fiscal year, which starts July 1, but industry wants the government to support locally manufactured household energy storage.

The Australian Materials and Battery Council (AMBC) foresees a surge in demand for household batteries on the back of more than 4 million rooftop solar installations nationwide. To meet that need, AMBC wants subsidies for Australian-made batteries, to accelerate manufacturing jobs and sovereign energy capability.

AMBC Chief Executive Quentin Hill said the trade body does not support the current mass import of household batteries when Australian companies are carving out market share by their “bootstraps” only to be swamped by imported batteries supported by the government.

“Australia has the beginnings of capability to capture the 20% to 50% [rooftop solar] value-add in lithium batteries and if we are to follow [regulator] the Australian Energy Market Operator’s (AEMO) roadmap on rooftop solar, out to 2050, we must grow our capability in battery management systems and grid integration, and what better way than in battery booster schemes that foster local innovation?” said Hill. “We recognize that calibrating for local content will slow uptake [of batteries] but the benefits in jobs and capability will be rewarded in jobs for our children.”

AMBC’s proposed battery booster scheme would include local battery accreditation reform and the establishment of an Australian battery industrialization centre (ABIC).

The membership body, which represents the whole battery supply chain, said a battery scheme would provide higher incentives for Australian made batteries than for imports; would scale with domestic manufacturing capability, ensuring sustainable industry growth; and would apply to residential, commercial, industrial, fringe-grid, and off-grid solar batteries.

The ABIC would independently certify local and imported batteries for safety and compliance and end of life stewardship.

Australian battery component manufacturing capability includes modules, packs and racks, management systems, housings, inverters, and thermal systems – equivalent to 20% to 50% of a battery’s value.

The AMBC also called for an industrial platform, under the National Battery Strategy, to increase the capability of next-generation battery cell manufacturing, of which Australia has leading exponents.

“Controlled roll-out to grow with local capability cannot meet one million batteries today, therefore any scheme needs to be calibrated to build local industry capability quickly and to grow with increased industry capability,” added Hill.

Energy bills

Australian Capital Territory (ACT) independent senator David Pocock said the next federal budget offers consumers an energy band aid, instead of structural reform. Rather than temporary bill relief, Pocock said he wants large-scale support to help households adopt renewable energy with rooftop solar and home batteries.

Modeling commissioned from the parliamentary budget office, on the cost of electrifying suburbs in the ACT, showed the government could have supported the electrification of approximately 600 suburbs with the AUD 6.8 billion ($4.3 billion) it has spent on three rounds of energy bill relief.

“We know that getting households off gas and fully powered by renewable energy will save them thousands, year on year, and this is the kind of long-term structural change we need,” said former international rugby player Pocock.

Commenting in the Financial Review newspaper, Pocock said suburbs nationwide should be fully electrified, getting them off gas. He added, “They’d be saving thousands of dollars every single year, not this 150 bucks.”

Heidi Lee Douglas, CEO of non-profit consumer advocacy Solar Citizens, said the lack of a federal rebate for home batteries is a clear gap in household energy support.

“A significant federal rebate for home batteries would reduce the power load in the evenings that is driving up energy prices from using expensive, unstable coal power and expensive gas power,” said Douglas. “If a million solar households could soak up the power their panels generate during the day, to use at night, AEMO calculates this would be enough to firm the grid and keep prices lower for everyone.”

Douglas added, Solar Citizens data show Australians who have solar power “overwhelmingly” want batteries to provide backup storage and reduce their bills further, and to share that cheap power with their neighbors. “More than 70% say they can’t afford the upfront cost of a battery without a rebate or other financial support,” said Douglas. “This would be a smart way to slash energy bills now and long term, gaining much needed cost of living relief for the next 20 years for all Australians.”

A record 57,000 residential battery energy storage systems, with a combined storage capacity of 656 MWh, were installed in Australian homes in 2023, up 21% on the previous year. Around 250,000 Australian homes have batteries, with a total 2.77 GWh of capacity.

From pv magazine Australia.