What the U.S. can learn from Australia’s home battery boom

Australia has become the world leader in home solar and batteries, and it points to where U.S. home energy incentives may be headed. About 40% of Australian houses have rooftop solar, and nearly 5% now have home batteries, with over 400,000 installed in the past year. A federal subsidy called Cheaper Home Batteries covers roughly 30% of a battery's cost and can be combined with state incentives. Owners can also earn ongoing payments by joining "virtual power plant" (VPP) programs, which let utilities draw on home batteries during periods of high demand in exchange for compensation. One Australian homeowner with solar, a battery and an electric vehicle recently received a $500 USD credit on his electric bill because of the flexibility his system gave the grid.

The U.S. lags far behind: about 9% of homes have rooftop solar and less than 1% have a battery, partly because equipment costs more here than in Australia. The U.S. also lacks widespread programs that pay homeowners for the grid flexibility their batteries or smart thermostats provide.

For now, this is mainly a policy comparison rather than a new program you can sign up for. But it signals that battery incentives and VPP payment programs, similar to Australia's, may expand in U.S. states as demand for electricity grows, driven partly by data centers. If you already have solar or are considering a battery, it's worth watching whether your state introduces a subsidy or a VPP program that pays you for letting your battery help balance the grid.