Solar Batteries and the 2026 STC Deeming Period Reduction: What Australian Homeowners Need to Know

Solar batteries and the 2026 STC deeming period reduction explained

From 1 January 2026, the Australian Government will reduce the deeming period used to calculate Small-scale Technology Certificates (STCs). These changes affect solar batteries, solar PV systems, solar water heaters, and air-source heat pumps installed from that date onward.

For homeowners planning a solar-plus-battery installation in late 2025 or early 2026, it is important to understand how this change affects the size of your upfront discount.

This guide explains the deeming period, what is changing in 2026, and how the updated STC rate impacts battery pricing with full worked examples for 10 kWh, 20 kWh, 30 kWh, 40 kWh and 50 kWh systems.

What Is the STC Deeming Period?

Every small solar or energy efficient system installed under the Small scale Renewable Energy Scheme (SRES) receives STCs based on the number of years left until the scheme ends in 2030. This timeframe is called the deeming period.
 
The longer the deeming period, the more STCs the system receives. More STCs means a larger upfront discount.

What Is Changing From 1 January 2026?

1. The deeming period will drop by one year

From 1 January 2026:

  • Systems installed in 2025 receive up to 6 years of deeming
  • Systems installed in 2026 receive up to 5 years
  • The deeming period reduces each year until the scheme ends in 2030

This reduction lowers the number of available STCs for:

  • Solar PV systems
  • Solar water heaters
  • Air-source heat pumps

2. Battery STC Rate Will Also Decline in 2026

Unlike solar panels (which receive STCs based on expected generation), battery STCs are based on usable energy capacity, up to a maximum of 50 kWh.
 
From 1 January 2026, the STC rate for batteries drops from:
  • 9.3 STCs per kWh (2025)
to
  • 8.4 STCs per kWh (2026)
Because of this lower rate and the shorter deeming period, the federal incentive for batteries will be slightly smaller.

2026 STC Examples for Common Battery Sizes

The following table shows STC values for common battery sizes using:

  • 2026 STC rate: 8.4 STCs per kWh
  • Assumed STC market value: $38
  • Eligible capacity: First 50 kWh only

2026 Battery STC Values (8.4 STCs per kWh, $38 per STC)

Battery Size (Usable kWh) STCs Earned (2026) Estimated STC Value ($38 each)
10 kWh 84 $3,192
20 kWh 168 $6,384
30 kWh 252 $9,576
40 kWh 336 $12,768
50 kWh (maximum eligible) 420 $15,960

2025 vs 2026 Comparison

To highlight the impact of the deeming period reduction for batteries, the table below compares the same battery sizes using both the 2025 and 2026 STC rates.

Assumptions:

  • 2025 rate: 9.3 STCs per kWh
  • 2026 rate: 8.4 STCs per kWh
  • STC value: $38
  • Eligible up to 50 kWh

2025 vs 2026 Battery STC Comparison

Battery Size 2025 STCs 2025 Value 2026 STCs 2026 Value Difference ($)
10 kWh 93 $3,534 84 $3,192 –$342
20 kWh 186 $7,068 168 $6,384 –$684
30 kWh 279 $10,602 252 $9,576 –$1,026
40 kWh 372 $14,136 336 $12,768 –$1,368
50 kWh 465 $17,670 420 $15,960 –$1,710

Key Takeaways for Homeowners

  • Smaller batteries (10 kWh) lose around $342 in 2026.
  • Medium-sized batteries (20–30 kWh) lose $684 to $1,026.
  • Large batteries (40–50 kWh) lose $1,368 to $1,710.
If you are planning a larger battery system or multiple modules, the timing difference becomes more significant.

Why Is the Deeming Period Reducing?

The deeming period reduces each year because the Small-scale Renewable Energy Scheme winds down by 2030. The closer we get to that end date, the fewer certificates the government issues for new installations.

Will Batteries Still Receive STCs After 2026?

Yes.
Solar batteries will continue to receive STCs until the scheme ends in 2030, although the number of STCs will decrease each year as the deeming period shortens.

Government Calculators Updated for 2026

The Clean Energy Regulator has updated:

  • Small Generation Unit STC Calculator (now includes batteries)
  • Solar Water Heater STC Calculator
Homeowners and installers can now use these updated calculators to estimate STC entitlements more accurately.

Installers: Accurate STC Claims Are Essential

The Clean Energy Regulator audits STC applications. If a claim is incorrect or improperly created:

  • Certificates may be rejected
  • Enforcement action may occur under the Renewable Energy (Electricity) Act 2000
Accurate system documentation is critical.

Should Homeowners Install Before 2026?

If you are planning a solar-plus-battery installation and want to maximize the federal incentive, installing before 1 January 2026 will deliver:

  • A longer deeming period
  • A higher STC rate
  • A larger upfront discount
For many households, this can mean savings between $300 and $1,700, depending on the battery size.

Final Thoughts

The 2026 deeming period reduction is part of the planned wind-down of Australia’s Renewable Energy Target. Batteries will still receive federal incentives, but the discount will be smaller from 2026 onward.
Understanding these changes helps homeowners make informed decisions about when to install a battery and how much they can expect to save.

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