Battery Rationing is Required to Contain an Aussie Green Subsidy Blowout – Watts Up With That?

Essay by Eric Worrall

“… A possibility to discuss is lowering the 50kWh threshold to 15kWh. …”

Australia’s $2.3 billion green energy program is funding oversized batteries and blowing out in cost

Published: December 8, 2025 12.07pm AEDT
Rohan Best
Senior Lecturer, Department of Economics, Macquarie University

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There has been a massive uptake. The Clean Energy Regulator, which administers the program, told The Conversation that around 146,000 batteries have been installed in just five months.

But digging into the data reveals some major concerns about the program – many of which I previously anticipated. The average size of the batteries installed under the program is roughly double what a regular household requires to meet its energy needs. And that has resulted in a major cost blowout.

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In September, when the Clean Energy Regulator revealed 50,000 batteries had been installed in just two months, Minister for Climate Change and Energy Chris Bowen said:

This program is working in the suburbs, in the regions and in our cities. Australians are proving the naysayers and climate change deniers wrong – they want to be part of the clean energy future.

The average system size of battery installation is more than 22 kilowatt-hours, which can cost around A$18,000. The most common system size installation is roughly 19kWh. 

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Currently, batteries above 100kWh are ineligible, and batteries above 50kWh only get a discount with respect to the first 50kWh. A possibility to discuss is lowering the 50kWh threshold to 15kWh.

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Read more: https://theconversation.com/australias-2-3-billion-green-energy-program-is-funding-oversized-batteries-and-blowing-out-in-cost-271206

I find Rohan’s apparent implicit use of average energy requirements interesting.

In subtropical Queensland, 15Kwh of battery capacity would be more than enough for our mild winters, and a fair chunk of Fall and Spring. But in Summer pretty much every day where I live is in the low to mid 80s with high humidity. Our 6Kw of home air conditioning hasn’t been switched off since mid November.

The reverse is true in Australia’s south, where lots of home heating is required to drive back the cold and damp of our southern winters. But even in Summer, southern cities can experience dramatic heatwaves in Summer, along with the occasional cold Summer day when home heating is required.

My point is Rohan is wrong about 10KWh of battery capacity being enough. For a battery to be any use, it has to be able to handle at least expected seasonal peaks in demand, not just average demand.

I’ve seen University academics use average when they should be using peak before, with disastrous consequences.

There was a string of embarrassing public software disasters in the early 90s, when banks and other major institutions first started going online with automated telephone and dial up services. The disaster was caused by academic consultants called in to assist using average demand to calculate system capacity requirements rather than peak demand. Despite objections from senior programmers, the average demand narrative consistently prevailed, perhaps because it produced lower cost estimates.

The result was a string of launch day failures of high profile software projects, until companies learned through bitter experience to use peak demand to estimate hardware and software capacity requirements.

If Rohan’s apparent use of average capacity is typical, if that same academic mistake of using average demand rather than peak demand for capacity calculations has infiltrated Australia’s grid planning process, Australia is in for one hell of a ride.