Australian state offers $32.5M in grants and loans to bolster local battery manufacturing

The Western Australian (WA) government has unveiled more than $1 billion (USD 650 million) in energy-related funding support in the 2025-26 State Budget, including $50 million (USD 32.5 million) in grants and low-interest loans to support locally produced battery energy storage systems.

The Local Battery Manufacturing Program includes a $30 million grants scheme with eligible manufacturers able to access grants of up to $10 million that will be matched dollar-for-dollar by the companies to expand their capacity and produce battery products for local and international markets.

An additional $20 million in low-interest loans or provision of state government land is also available to encourage investments in technology and production facilities.

State Premier Roger Cook said the budget investment will help put WA businesses in the box seat to benefit from a surge in demand for household batteries to harness solar energy driven by the rollout of the state’s Residential Battery Scheme.

“Our economy has been made strong through the hard work of generations of Western Australians,” said Premier Cook said. “We want to build on that record, make more things here, power WA on clean energy, supply the materials required for the world’s clean energy transition, and diversify our economy by leveraging our existing strengths.”

The initiative, that has been funded with $337 million in this year’s budget, will work in combination with the federal government’s Cheaper Home Batteries program that kicks off on July 1 to offer rebates of up to $7,500 and no-interest loans to make renewable energy storage accessible.

The state government expects about 100,000 households are set to benefit from the combined state and federal schemes.

Cook said the grid-scale renewable energy effort will enhance energy stability and support the state’s goal of phasing out coal by the end of the decade.

“By 2030, coal will represent 0% of our energy mix,” he said. “Household solar and batteries, alongside wind and large-scale battery projects like those in Kwinana and Collie, will play a critical role in achieving a stable, renewable-powered grid.”

The funding for the rollout and local manufacturing of residential batteries is among a suite of power sector and electrification initiatives included in the latest state budget.

The measures include a $584 million investment to expand WA’s main power grid, the South-West Interconnected System (SWIS), through the Clean Energy Link – North and Regans Ford terminal projects.

In Budget papers, the state government said these projects will go some way to unlocking renewable generation resources in the north of the grid, helping offset the retirement of 1 GW of state-owned coal plant by 2030.

Other funding commitments include $83 million to produce electric buses and ferries in WA, and $30 million for a further round of funding for new energies industries through the Investment Attraction Fund to support critical minerals, hydrogen and carbon capture and storage projects.

Another $25 million has been committed to drive the local manufacture and supply of transmission towers and components required to deliver the state’s renewable energy transition, and establish a Local Industry Development Fund.

“We are working with local industry to maximise the opportunities provided by the energy transition, ensuring the creation of skilled local jobs to support the expansion of manufacturing capabilities,” WA Energy Minister Amber-Jade Sanderson said.

“We want to make more things here as we diversify our economy by leveraging our existing strengths. This will enable local suppliers to be engaged in long-term supply contracts, creating a pipeline of skilled jobs and delivering value for money with materials made right here in WA.”

From pv magazine Australia.