Chris Bowen MP, Minister for Climate Change and Energy
Penny Sharpe MLC, NSW Minister for Climate Change and Energy
The Minns and Albanese Labor Governments have teamed up to double the incentives available for NSW households and small businesses to install a solar battery and connect it to a Virtual Power Plant, providing almost $5,000 in upfront benefits for a typical system that unlocks long-term cost-of living reductions.
The Australian Government's $2.3 billion Cheaper Home Batteries Program will support households and small businesses with a discount on the cost of installing small-scale battery systems. This will reduce the cost of a typical installed battery by around 30%, making this support around double the current incentive available to NSW consumers.
The Minns Labor Government will now almost double its incentive for households and businesses to connect their solar battery to a Virtual Power Plant. It will stack with the Commonwealth solar battery incentive, to unlock more cost-of-living relief.
From 1 July 2025, the Minns Labor Government is increasing the incentive to up to $1,500 to encourage more households and small businesses to install a battery and connect to a Virtual Power Plant. The incentive varies by the size of the battery.
It means NSW households and businesses will be able to access double the current incentive for installing a battery (through the Commonwealth program) and double the current incentive for registering it with a Virtual Power Plant (through the NSW scheme).
For example, if a household installs a typical 11.5 kWh system, the combined support would be almost $5,000. If the household installs a larger 27 kWh battery which costs just over $30,000 without support, it will receive a discount of around $10,000 from the Commonwealth program. If it then connects the battery to a Virtual Power Plant, it will receive an upfront payment of almost $1,500 from the NSW scheme.
Virtual Power Plants are connected groups of solar powered batteries owned by households and small businesses. Connecting to a Virtual Power Plant allows them to generate revenue on an ongoing basis by selling the excess energy stored in their battery to their neighbours and community when demand on the grid is high.
Virtual Power Plants also reduce demand on the electricity grid, which makes the state's energy supply more stable and less prone to outages. This prevents price spikes and drives down the price of electricity for everyone, while taking us closer to our Net Zero targets.
The increased Virtual Power Plant incentive will replace the NSW home battery installation incentive which has been doubled by the Commonwealth program.
The NSW Government incentive for solar batteries has been a huge success, with more than 11,400 battery installations in six months.
Anyone with a compatible solar battery, including those installed under the NSW incentive since November, who has not yet taken up the Virtual Power Plant incentive, is eligible for the newly doubled incentive from 1 July.
The Clean Energy Regulator is responsible for ensuring the safe installation of home batteries under the Commonwealth's Cheaper Home Batteries Program, including the eligibility of products and accreditation of installers. The program builds on Australia's well established and successful rollout of rooftop solar, which has seen more than 4 million solar installations and one-in-three homes harness sunshine for their power.
The NSW Government will continue working with stakeholders on future opportunities for the NSW Peak Demand Reduction Scheme, including considering what new activities could be incentivised.
Quotes attributable to Minister for Climate Change and Energy, Chris Bowen:
"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.
"We're working with the Minns Labor Government to make sure more homes and small businesses can slash their bills by installing a battery and connecting it to a Virtual Power Plant.
"The Albanese and Minns Labor Governments are teaming up to double the benefits available to NSW households and small businesses. We'll help more people in NSW access cheap, fast and safe solar energy in their homes and businesses night or day, when they need it."
Quotes attributable to NSW Minister for Climate Change and Energy, Penny Sharpe:
"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.
"The Minns Labor Government is working with the Albanese Government to double the current benefit available when you install a solar battery and connect it to a Virtual Power Plant.
"By increasing battery uptake we're reducing demand on the whole grid, putting downward pressure on bills for everyone."
