Solar Battery STCs Explained: How the 2026 Changes Affect Battery Pricing

STCs, or Small-scale Technology Certificates, are the mechanism used to provide the Australian Government's battery incentive.

Since 1 July 2025, eligible home and small-business batteries connected to new or existing rooftop solar can receive STCs under the expanded Small-scale Renewable Energy Scheme (SRES). The incentive is generally passed through to customers as an upfront discount from a participating retailer or installer.

So when comparing battery quotes in 2026, you need to understand usable capacity, STC factor, capacity taper and the actual installed price — not just the advertised "30% rebate".

Thinking about a battery in 2026? Don't ask only: "How much rebate do I get?"

Ask your installer:

1. What is the battery's usable capacity?
2. What STC factor has been used?
3. How many STCs are being claimed?
4. Has the 14kWh capacity taper been applied?
5. What is the battery price before and after the STC discount?
6. Is the quoted incentive based on the current 2026 rules?
7. Is the battery eligible and VPP-capable?

STC stands for Small-scale Technology Certificate. STCs are tradable certificates created under Australia's Small-scale Renewable Energy Scheme (SRES).

The SRES has historically supported eligible rooftop solar installations. Since 1 July 2025, eligible small-scale batteries were added to the scheme through the Cheaper Home Batteries Program.

Instead of the government simply sending every homeowner a fixed battery rebate, the incentive operates through the certificate system.

That's why you may see a battery advertised as: "$X,XXX after rebate". The "rebate" is generally not a separate cheque that arrives in your bank account.

Let's simplify the mechanism. Suppose an eligible battery installation creates a certain number of STCs. The installer or registered agent can assign the STC rights and use their value to reduce the upfront cost.

So the customer's quote may effectively look like:

This is the most important part of the 2026 rules. The Clean Energy Regulator changed both:

Current 2026 structure

Only the first 50kWh of usable capacity can generate STCs under the scheme.

For battery installations during 1 May 2026 – 31 December 2026, the published STC factor is:

The next published factor is 5.7 from January–June 2027, followed by 5.2 from July–December 2027.

Published battery STC factors

This distinction is extremely important.

Let's use a simple example. Assume an eligible battery has 10kWh usable capacity and it is installed in September 2026. The current factor is 6.8.

This is the simplified STC entitlement calculation before considering any other eligibility or calculation requirements. The important point:

It does not mean:

The STCs have a monetary value, but the number of certificates and their dollar value are different things.

A 13.5kWh usable battery sits entirely inside the first 14kWh tier. Therefore:

So, conceptually:

The actual CER process determines certificate creation and validation, so these figures should be treated as illustrative calculations, not a promised customer rebate.

This is where the new 2026 rules become much more important. A 20kWh usable battery contains:

The important thing is not the decimal. It's the structure:

• The first 14kWh receives the full factor.
• The next 6kWh receives only 60% of that factor.

This is a useful way to understand the 2026 change.

The government designed the changes to keep the program broadly around a 30% discount while accounting for falling battery costs. The CER says the STC factor will decline more frequently and at a higher rate, while the capacity taper helps maintain broadly similar support across different battery sizes.

The practical result for homeowners is:

Usually, yes in absolute terms — but not proportionally. A 20kWh battery can generate more STCs than a 10kWh battery. But the additional capacity above 14kWh gets a reduced factor.

That's one of the biggest practical effects of the May 2026 changes.

Imagine you receive two quotes.

You might initially think: "The 20kWh battery is twice the size, so I should get roughly twice the rebate." That's not how the 2026 STC structure works.

The first 14kWh receives the full factor. The capacity above 14kWh is tapered. Therefore, you need to compare:

• Installed cost
• Usable capacity
• STC entitlement
• Expected battery utilisation
• Electricity savings

Another important detail is the difference between:

The CER specifically states that STCs are calculated using usable capacity, with only the first 50kWh eligible for STCs. For example, a battery marketed as "15kWh" should not automatically be assumed to have 15kWh usable capacity. You need to check the product specification.

The current CER requirements include several conditions. For an eligible solar battery system, the battery must generally:

• Be new
• Have nominal capacity between 5kWh and 100kWh
• Be installed with new or existing solar PV of no more than 100kW
• Be on the Clean Energy Council approved battery list
• Comply with applicable Australian and New Zealand standards
• Meet electrical safety requirements
• Be installed by an appropriately accredited installer
• Meet the program's VPP-capability requirements for grid-connected systems

Yes. This is one of the most useful parts of the current program. An eligible battery can be installed alongside:

• New solar, or
• Existing solar

The Australian Government explicitly states that the Cheaper Home Batteries Program applies to eligible batteries connected to new or existing rooftop solar. That means a Melbourne homeowner who installed solar several years ago doesn't necessarily need to replace the entire system simply to investigate battery storage.

This is more complicated. You shouldn't assume that adding another battery module automatically creates a new full STC entitlement. The CER has specific rules for expanding existing battery systems, including requirements around whether previous STCs have already been claimed and minimum additional nominal capacity.

This phrase is frequently misunderstood. The Australian Government describes the Cheaper Home Batteries Program as providing around a 30% discount on eligible battery installations.

It doesn't mean:

Nor does it mean:

The STC factor is adjusted over time, and the capacity taper means the effective support differs across battery sizes. So when you see "30% battery rebate", think of it as the program's broad support level, not a fixed coupon.

A good battery quote should make the incentive understandable. Ideally, you should be able to see something similar to:

A good installer should be able to answer these questions clearly.

STC questions

1. What STC factor has been used?
2. How many STCs are being claimed?
3. How has the 14kWh capacity taper been applied?
4. What is the STC dollar value used in the quote?
5. Is the quote based on the current September 2026 rules?

Battery questions

6. What is the nominal capacity?
7. What is the usable capacity?
8. What is the battery's power output in kW?
9. What warranty applies?
10. Is backup included?

Installation questions

11. Does my switchboard need upgrading?
12. Does my inverter need replacing?
13. Has DNSP approval been checked?
14. Is the installation compliant with current requirements?

Future-energy questions

15. Can the system support an EV?
16. Is the battery VPP-capable?
17. Can I add capacity later?

For an on-grid battery to claim STCs under the current scheme, the battery system — including the inverter — must be technically capable of participating in a Virtual Power Plant (VPP).

You don't necessarily have to join a VPP. The requirement is about capability. A VPP connects multiple distributed batteries and allows them to be coordinated as a larger energy resource.

This distinction is critical.

An STC calculation cannot tell you whether a battery is right for your home. It doesn't know:

• When your household uses electricity
• How much solar you export
• Your electricity tariff
• Your feed-in tariff
• Your evening consumption
• Your future EV charging
• Whether you need backup
• Whether your battery will cycle every day
• Whether your roof produces enough solar to fill it
• Whether your existing inverter is suitable

Not automatically. This is an important distinction. The 14kWh threshold is relevant to the incentive. It does not mean: "14kWh is the best battery size."

A battery above 14kWh can make sense where there is enough energy to charge it and enough demand to use it. For example:

• Large solar system
• High evening electricity consumption
• Multiple air conditioners
• Electric hot water
• EV charging
• Large family household
• Business with evening loads
• Backup requirements

Consider a Melbourne home with 10.5kW solar and significant evening consumption. The home may produce substantial excess solar during the middle of the day but still import electricity after sunset. A battery can shift some of that daytime generation into the evening.

Now compare that with a smaller household that:

• Has lower electricity consumption
• Uses little power after sunset
• Has modest solar generation

Samsun Energy currently works with battery technologies including Dyness, Sungrow, GoodWe Lynx and AlphaESS. A practical battery assessment should work backwards from the household rather than starting with the rebate.

Rather than relying on a fictional "average Australian home", Samsun's published project portfolio includes real battery installations.

These are illustrative calculations only, using the current May–December 2026 factor of 6.8.

The CER itself provides a 40kWh example that results in 164 STCs under the May–December 2026 rules.

The May 2026 changes make old battery quotes particularly risky to interpret. The CER itself advised retailers to check quotes and ensure they are not out of date. It also advised consumers to confirm that the installation is possible and that the quoted price will be honoured.

This is especially important when comparing:

because the applicable STC factor changed from 8.4 to 6.8, alongside the introduction of the capacity taper.

For Melbourne homeowners, there are two separate things to keep in mind.

Use this simple checklist. Ask your installer:

• "What is the usable capacity?"
• "What STC factor are you using?"
• "How many STCs are being created?"
• "How have you applied the 14kWh taper?"
• "What dollar value have you allowed for the STCs?"
• "Is the price based on the current September 2026 rules?"
• "Is the battery CEC-approved?"
• "Is the system VPP-capable?"
• "Does my existing solar/inverter support this battery?"
• "Are network and electrical upgrades included?"

The 2026 battery incentive is still valuable, but the way it is calculated matters more than ever. The current structure is:

with:

and STCs calculated using usable battery capacity.

So don't choose a battery simply because its advertised rebate looks attractive. Choose the battery that makes sense for your:

• Solar generation
• Electricity consumption
• Evening demand
• Future EV / heat-pump loads
• Backup requirements
• Electricity tariff
• Budget
• Expected utilisation

• Australian Government — Cheaper Home Batteries Program
• Clean Energy Regulator — Solar Batteries & STC Factors
• Clean Energy Regulator — 2026 Battery STC Changes
• Solar Victoria — Solar Homes Program
• Solar Victoria — Solar PV Rebate
• Energy Safe Victoria — Battery Storage Safety