Home Batteries Are Getting Bigger, but Is a 25 kWh System Right for You?

Here’s a surprising number. The average home battery installed in Australia in October 2026 was 26.74 kWh, according to industry analyst SunWiz. Two years ago, that would have been considered a monster. A typical battery back then was 10 to 13 kWh.

And it’s not a few outliers dragging the average up. Batteries of 20 kWh and above made up 85% of all home battery capacity installed that month.

So, what size battery do you need? It’s one of the most common questions homeowners ask, and the honest answer is that it depends less on the rebate and more on your roof and your evenings. A big battery you can’t fill is just an expensive wall ornament. Here’s why batteries are getting bigger, how the rebate really treats them, and how to size one for your home.

Why are home batteries getting bigger?

After the big rush to beat the rebate cut in April, a lot of people expected battery sales to fall off a cliff. They didn’t. Australians installed about 1,043 MWh of home batteries in October, the first month above 1 GWh since April, and the average size has now grown five months in a row.

Five things are driving it:

• The rebate still likes mid-size batteries. Capacity between 14 and 28 kWh earns 60% of the full rate. That’s a smaller carrot, but it’s still a carrot, and it makes 20 to 25 kWh look tempting.
• Each extra kWh is cheap to add. The installer’s time, the wiring and the inverter cost much the same whether you buy 13 kWh or 25 kWh. So the price per kWh falls as you go bigger, and installers know it’s an easy upsell.
• Solar systems have grown too. The average new rooftop system is now about 10 kW, which makes enough spare energy to fill a bigger battery on a decent day.
• Homes are going all-electric. EVs, heat pumps and induction cooktops all pile onto evening demand, especially as people quit gas.
• Stored energy is worth more than it used to be. With VPPs and time-of-use tariffs, a kWh in your battery at 6pm can be worth several times what you’d get for exporting it at noon.

How does the tiered rebate affect bigger batteries?

Since 1 May 2026, the federal Cheaper Home Batteries Program has paid out in three tiers, based on your battery’s usable capacity. Think of it as a rebate that gets less generous the more you buy:

• First 14 kWh: full rate, about $252 per kWh.
• 14 to 28 kWh: 60%, about $151 per kWh.
• 28 to 50 kWh: 15%, about $38 per kWh. Barely worth mentioning.

The Clean Energy Regulator has the official details if you want them. Here’s what it looks like in dollars, using an STC price of around $37, which is roughly what households receive once trading fees come off the current market price of about $40:

Usable capacity	Approximate rebate	Rebate per kWh
10 kWh	$2,516	$252
14 kWh	$3,522	$252
20 kWh	$4,428	$221
25 kWh	$5,183	$207
30 kWh	$5,711	$190
40 kWh	$6,089	$152

Here’s what that table tells you. Stretching from 14 kWh to 28 kWh still gets you about $2,100 extra in rebate, which is worth having. But going from 28 kWh to 40 kWh adds only about $450. Past 28 kWh, you’re paying close to full price for every extra kWh, so you’d better be sure you’ll use it.

One catch: these figures only hold until 31 December. On 1 January 2027, the STC factor drops from 6.8 to 5.7, cutting the rebate by about 16% per kWh. A 25 kWh battery installed in January will get roughly $840 less than the same battery installed in December. The factor then falls again in July 2027, and every six months after that until 2030.

This is a shift from Energy Matters’ earlier advice, when a well-matched 10 to 13 kWh battery looked like the better-value buy after the May changes. For many low-use homes, it still is. But falling battery prices and more households going all-electric have strengthened the case for a mid-size battery. For the full detail on the current rules, see our explainer on the May 2026 program changes.

What size battery do you actually need?

Here’s the simple version of how a battery saves you money. It soaks up solar you’d otherwise export for a few cents, then hands it back in the evening when grid power is expensive. So the right size is the one you can fill and empty on most days. Not the biggest one you can afford, and definitely not the biggest one you can be talked into.

Work through these four questions before getting a single quote.

How much power do you use after the sun goes down?

This is the big one, and it’s easier to find than most people think. Log in to your retailer’s app or portal and look at your smart meter data. Add up what you use from late afternoon to early morning, when your panels are doing nothing. For a lot of households, it lands somewhere between 8 and 15 kWh a day. That’s a 13 to 16 kWh battery, not a 25.

Can your solar fill a bigger battery?

This is where a lot of people get stuck. Each kW of panels makes roughly 3.5 to 4.5 kWh a day on average in most capitals, and noticeably less in winter. Take off what your home uses during the day, and what’s left is what you can actually store.

Let’s run the numbers. A 6.6 kW system makes about 26 kWh on an average day. If your home uses 10 kWh of that while the sun’s up, you’ve got about 16 kWh left for the battery. Bolt a 25 kWh battery onto that, and it’ll rarely fill. Now take a 10 kW system: it makes about 40 kWh, which can fill a 25 kWh battery comfortably on a good day.

What’s changing in your home over the next five years?

This is the honest case for going bigger. An EV can add 5 to 7 kWh a night for a typical commute. Swapping gas for a heat pump, induction cooking or reverse-cycle heating adds evening load too. If any of that is on the cards in the next few years, sizing up now is usually cheaper than adding capacity later.

Do you need backup power?

If keeping the lights on in a blackout matters to you, size for the essential circuits you’d want running overnight. And check that your system does backup at all. Plenty don’t, and people are often surprised to find that out the hard way.

When does a 25 kWh battery make sense?

None of this means big batteries are a bad buy. For the right home, a 25 kWh system is a great investment. Here’s a quick gut check.

A bigger battery is likely worth it if you

• have 10 kW or more of solar, or are installing it with the battery
• use 15 kWh or more in the evening and overnight
• own an EV, or plan to within a few years
• are going all-electric or replacing gas appliances
• want to join a VPP or use a time-of-use tariff to earn from stored energy
• want several hours of whole-home backup

A smaller battery is probably better if you

• have a 5 to 6.6 kW solar system and no room to expand it
• live alone or as a couple and use little power at night
• are out most days, so you’ve no daytime use to shift into the evening
• are on a tight budget, since the first 14 kWh gets the highest rebate per kWh

Sitting somewhere in the middle? Be careful with the “start small, add modules later” plan. Under the program rules, extra capacity only qualifies for the rebate if the original battery never received it, and the addition is at least 5 kWh. Add modules to a battery that’s already had the rebate, and you’ll pay full price for them. If you think you’ll need more capacity within a few years, it’s usually cheaper to size up now.

Frequently asked questions

What size battery do I need for a four-person home?

For most four-person homes, 13 to 20 kWh is a sensible starting point. That covers the 8 to 15 kWh a typical family uses between sunset and sunrise. Go bigger if you’ve got an EV, ducted air conditioning or a pool, but only if your solar system can fill the battery on most days.

Is a bigger battery always better value?

No. Bigger batteries are cheaper per kWh to install, but you only save money on energy you actually store and use. If your solar can’t fill the battery, or you don’t use the stored energy overnight, the extra capacity just sits there and stretches out your payback.

How much is the federal rebate on a 25 kWh battery?

If installed before 31 December 2026, a 25 kWh battery gets a federal rebate of around $5,180, based on an STC price of about $37. The first 14 kWh earns the full rate and the other 11 kWh earns 60%. From 1 January 2027, the same battery gets about $4,340.

How much solar do I need to fill a 25 kWh battery?

As a rule of thumb, you’ll want around 10 kW of solar to fill a 25 kWh battery on an average day, after covering what your home uses in daylight. Smaller systems might only manage it in summer. A good installer will model your generation and usage over a full year, not just a sunny day.

Can I add more battery capacity later?

You can, but don’t count on a rebate for it. Added capacity only qualifies if your original battery never received the federal discount and the addition is at least 5 kWh. Modules added to a rebated battery get nothing. They also need to be compatible with your system. If your needs will grow soon, size up from the start.

Key takeaways

• The average Australian home battery reached 26.74 kWh in October 2026, and 85% of new capacity came from batteries of 20 kWh or more.
• The federal rebate pays the full rate on the first 14 kWh, 60% up to 28 kWh and only 15% beyond that.
• Size your battery on your evening and overnight use, not the national average.
• Make sure your solar can fill the battery, which for 25 kWh usually means about 10 kW of panels.
• Bigger makes sense for homes with EVs, all-electric appliances or VPP plans. Smaller often wins for low-use homes with modest solar.

Sources

• Cheaper Home Batteries Program (Department of Climate Change, Energy, the Environment and Water)
• Battery rebates are changing 1 May 2026 (Clean Energy Regulator)
• Approved battery list (Clean Energy Council)
• Cheaper Home Batteries Program changes explained from 1 May 2026 (Energy Matters)
• Australia is headed for its biggest year of rooftop solar growth ever (Renew Economy, reporting SunWiz data)
• Cheaper Home Batteries scheme faced $14 billion bill before rebate changes (Renew Economy)
• The solar system you installed for 60 cents is now working in a 3-cent world (Energy Matters)