Near $5bn upgrade for Labor’s battery subsidy scheme revealed
Energy Minister Chris Bowen has announced an expanded budget and sustainability reforms for Labor’s battery subsidy scheme, confirming reports the initial $2.3bn budget would have been exhausted within a year.
Chris Bowen has revealed urgent reforms to the Labor government’s battery subsidy scheme after a cost blowout resulted in the program’s budget ballooning to $7.2bn.
The Climate Change & Energy Minister announced a nearly $5bn increase to the scheme’s initial $2.3bn budget at a press conference in Western Sydney alongside Smart Energy Council Chief Executive John Grimes.
“I’m announcing that in the mid-year economic update – there will be an upgrade to the expenditure for the cheaper homes batteries policy (from) around $2bn to around $7bn,” Mr Bowen said.
Mr Bowen insists the project’s heavily inflated budget is due to Australians taking up the scheme with “enormous enthusiasm” rather than due of flaws in the program’s design which was initially announced by the Labor Government in the lead up to the federal election.
Mr Grimes said the program’s budget had expanded to $7.2bn with the Labor government aiming to supply batteries to “over 2 million Australian households and businesses” by 2030, double what was initially estimated.
The battery subsidy scheme, which was unveiled in April and approved in July, offers households and small businesses a 30 per cent discount saving customers around $4000 when purchasing a typical battery.
The program is part of Labor’s ambitious objective of having 82 per cent renewables on the grid by 2030 and promises Australian households that installing a new solar and battery system could save up to 90 per cent off a typical family electricity bill.
The scheme’s initial $2.3bn budget was intended to last until 2030 but reports suggest much of that has already been spent only six months into the program.
When questioned about the battery subsidy cost blowout, Mr Bowen confirmed that while “not all” of the program’s funds had been exhausted they “clearly would be spent in the coming year”.
“Many people in the sector assumed that when the $2.3bn was spent (the program) would end, that was never our intention,” he said.
“I would say (the program) was even more successful than we thought.
“That’s a good thing, I don’t think this is something we should be embarrassed about.
“If no one had taken this program up you would be asking me, why did you design this program so badly? No Australians have taken it up.
“When you are managing strength and success, it’s a good thing.”
Mr Bowen claimed 1000 batteries were being installed “consistently” every working day and about 500 on Saturdays, demonstrating Australian’s uptake of the program.
The subsidy program has been criticised for offering rebates per kilowatt instead of per battery, incentivising installers to sell consumers the largest possible battery available under the scheme, likely adding to cost blowouts.
To combat this, Mr Bowen announced a new tiered system for battery subsidies starting in May to ensure “the program continues to be fair and sustainable”.
“We’ll introduce a tiered model of support for battery size,” he said.
“Zero to 14 kilowatt hours, no change, 14 to 28 kilowatt hours (there will be) a step down in the certificate price and then another step down at 28 to 50 kilowatt hours.
“This ensures that at the moment, the discount of 30 per cent will apply on a typical average battery across the board.”
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