Australia’s Residential Storage Boom Portends The Next Solar Trigger In India As Well

Australia is among the frontrunners in the recent surge of energy storage that the world is witnessing. Needed in order to support the robust renewable energy growth and the changing energy industry dynamics. The home / residential battery market, in particular, is experiencing significant growth in Australia, with a recent surge in demand attributed to new federal government rebates that reduce upfront costs. Interestingly, the storage subsidies have followed a winding down of solar subsidies earlier. The year 2025 is expected to propel the Australian battery market to new heights. India, where solar subsidies still rule in the residential segment, may derive a strategy from Australia example to tailor a stratagem for domestic market of residential batteries especially from 2028 and beyond.

The latest edition of annual Battery Market Report from industry data analysts SunWiz sheds light on the impressive growth of Australia’s battery market through the year 2024. The boom comes at a time when the threat of curtailment on solar output has risen yet again due to excess generation during solar hours. Batteries could allow users to avoid this wastage. 

Subsidies, Rebates, and Feed-in-tariffs Fueling the Growth

As per the SunWiz report, Australian households installed a record-setting 72,500 home batteries in 2024, a 27 per cent increase on installation numbers in 2023. With an addition of over 850 MWh of energy storage capacity, the installs set another record. The cumulative total of residential home battery storage installed in the country is a massive 3,600 MWh.

 

The report notes that about 23 percent of all new rooftop solar installations included a home (or, residential) batteries – nearly doubling the numbers from a year earlier. Over a half of the batteries installed in homes were in existing and unchanged solar systems. 

The solar and accompanying residential battery market mutually benefit each other, as storage options help boost rooftop solar adoption further, and more solar growth means increased demand of batteries for storage. Incentives offered by the administration and falling feed-in tariffs. 

Notably, the Northern Territory, which was responsible for just over 1,000 home batteries in 2024, tops the nation on solar attachment rate – that is, the percentage of new rooftop solar installs that include a battery – at more than 80 per cent. 

Billion Dollars Boost for Home Battery Revolution

Australia’s Cheaper Home Batteries Program (CHBP), a battery subsidy scheme, is dubbed to be Australia’s first ever national policy targeting consumer battery uptake. 

The AUD 2.3 billion program is planned in the 2025-26 federal budget and is expected to be launched on July 1. On coming to execution, CHBP would offer installation discounts of up to 30 percent – AUD 4,000 0r USD 2,400).

The program will be funded through the Small-scale Renewable Energy Scheme (SRES), which already offers subsidies for rooftop solar. Under this program, small businesses and community facilities will also be able to access the subsidy, with support for up to 50 kWh of batteries sized up to 100 kWh eligible.

A key requirement of the rebate is that the battery installed must be ready and able to participate in a virtual power plant (or, VPP). VPP is a network of interconnected solar and battery systems that are aggregated by one entity, such as a retailer, and controlled collectively to offer paid services to the grid.

Australia’s federal government is driving battery adoption through the Capacity Investment Scheme (CIS) as well, which runs biannual tenders from 2024 to 2027. The goal is to secure 23 gigawatts of new renewable energy and 9 gigawatts of clean storage capacity by 2030. 

The CIS provides long-term revenue underwriting, guaranteeing a minimum and maximum return for selected projects. So far, federal and state support has backed at least 3.9 gigawatts of battery storage. 

Utility-Scale on the Rise Too

Australia is among the leaders when it comes to the pace of battery storage adoption. Apart from rooftop solar + residential batteries and its huge success in recent times, the country is also treading with a utility-scale battery boom propelled by sustained high volatility in the power market, government policies that support batteries, and expected coal plant closures. 

 

BloombergNEF notes in one of its reports that utility-scale batteries are expected to grow 8x to 18 GW through the next 10 years compared to 2.3 GW in 2024. By 2035, Australia is expected to cut its dependency on coal by about 70 percent. Thus, to support the alternative renewable energy growth, batteries are set to play a pivotal role both as a home storage solution as well as utility-scale power banks.

India’s Home Battery Storage Landscape: Prospects and Comparisons

Several factors fueled the recent boom of batteries in Australia: state rebates, an upcoming 30 percent federal battery subsidy, and declining feed-in tariffs. They pushed Australian homeowners to maximize self-consumption. In this context, we turn to India – a country with vast solar potential and growing energy needs – to analyze the prospects for residential battery storage adoption.

The battery market in India is in a very early stage. For comparison, India’s cumulative installed battery storage capacity (all sectors) was just 219 MWh as of March 2024, including utility-scale projects and pilot deployments. By contrast, the much smaller Australia grid added 852 MWh behind-the-meter in just last year.  

On the bright side, as millions of Indian households adopt rooftop solar, even a modest storage attachment rate could translate to huge capacity.

Lower Costs and Market Potential

One clear advantage in India is almost always lower costs –  cheaper labor, local assembly, and emerging domestic battery manufacturing in this case. A 10 kWh home battery system in Australia costs roughly AUD 10,000–14,000 (INR 5–7 lakh) installed. If we assume that the similar system costs about 15-20 percent lower in India, it will put an equivalent 10 kWh setup for INR 5.0 to INR 6.0 lakh. 

While the global trend of falling prices benefits the market, India’s Production-Linked Incentive (PLI) scheme for advanced batteries further promise to boost local production and drive prices down. However, unlike Australia, where battery prices are getting slashed by generous rebates, India currently offers no dedicated subsidy for residential batteries. As a result, the homeowners are bearing the burden of full upfront cost. 

If the Australia-like rebates are offered, it can enormously boost the home battery adoption in India. The studies indicate that falling battery costs could improve the value proposition of residential energy storage market – from nascent state of USD 150 million market in 2024 to about USD 623 million by 2030, clocking a CAGR of over 27 percent. 

As batteries become more affordable and more financing options emerge, more consumers might consider storage to shield against rising tariffs and outages. 

Steady Solar Growth a Good news for Batteries

The stellar growth of the residential solar sector in India is also fuelling the country’s residential battery sector. Every new rooftop PV owner is a potential battery customer in the future as Australia’s experience proves this – by 2024, nearly one in four new solar installations there included storage. 

In India, the current storage attachment rate is still very low as most new rooftop systems are installed without batteries. However, early signs of interest are emerging, especially among affluent and tech-savvy homeowners. The Indian government has also paved the way for growth in solar-plus-storage with a clarification informing that hybrid inverters and batteries are permitted under the national rooftop solar program.

The rise of domestic solar-storage solutions is another positive trend that is contributing toward battery adoption. A number of Indian companies and startups are offering lithium-ion home battery packs and integrated solar inverter systems. 

Way Forward

India may learn from the success story of Australia and implement a tailored strategy for its battery growth. Making solar +storage mandatory in institutional categories like schools, universities and many government owned buildng’s for instance, could add GWs of clean energy with minimal risk to the grid.

India’s millions of existing inverter-battery users (on lead-acid systems) represent a huge latent demand for better storage technology. As lithium-ion solutions approach price parity with lead-acid (especially considering lifecycle), many households may upgrade to longer-lasting batteries for their backup needs. This legacy of backup inverter adoption means the concept of home energy storage is familiar to consumers – an advantage Australia didn’t initially have to the same extent. Converting this familiarity into adoption of solar-chargeable, grid-interactive lithium batteries is the next step.

Even if direct subsidies for batteries are not on the table, policymakers can adopt enabling measures to make adoption attractive. Additionally, clear interconnection standards for batteries and VPPs should be developed. Central agencies and state regulators can facilitate pilot VPP projects in partnership with DISCOMs.

Governments could also consider tax incentives – for instance, GST reduction on energy storage systems or income tax rebates for homeowners investing in batteries. Another way is including storage in future rooftop programs, such as small viability gap incentives for the first few thousand residential batteries to kick-start the market, or a mandate that new government-subsidized solar homes be storage ready.