China’s Manufacturers Eye Dominance in Australia’s Booming Home Battery Market Fueled by $11 Billion Subsidy

Australia’s Billion-Dollar Subsidy: Can Chinese Manufacturers Dominate the Home Storage Market?

As part of Australia’s “billion-dollar subsidy” initiative, the country has seen a surge in home energy storage installations. In just two months, over 43,000 batteries were installed, bringing the storage capacity close to the total amount installed throughout the previous year. In this sweeping energy revolution across Australian rooftops, Chinese battery brands have emerged strongly, becoming a new necessity for households.

The Australian government has been aggressively allocating funds to stimulate the home energy storage market. As reported in July by Global Zero Carbon, following the successful re-election of the Labor Party, the government launched a national battery storage subsidy program worth AUD 2.3 billion (approximately CNY 11.5 billion) starting July 1. This initiative, known as “Cheap Home Batteries,” aims to significantly enhance the uptake of home batteries by reducing installation costs by an average of 30%. This policy is part of Australia’s Small-Scale Renewable Energy Scheme (SRES), and the subsidy for home storage batteries can reach up to AUD 372 (CNY 1,716) per kilowatt-hour. For example, an 11.5 kWh storage battery could receive a subsidy exceeding AUD 4,000 (over CNY 20,000), while the Tesla Powerwall 2, which has a capacity of 13.5 kWh, could be subsidized up to AUD 5,000 (CNY 25,000).

The Australian government aims to encourage residents to utilize solar energy along with storage solutions to manage peak demand and achieve self-sufficiency, all while reducing high electricity costs and advancing Australia’s decarbonization goals. The launch of this policy has generated an enthusiastic response from Australian residents. Data from SunWiz, a solar and storage market analysis firm, shows that in July, Australia installed a total of 19,592 solar batteries, nearly a quarter of the total installed throughout the previous year. These batteries have a combined rated capacity of 344.1 megawatt-hours (MWh), averaging 18.2 kWh per unit. According to the latest figures from the Clean Energy Regulator (CER), by the end of August 2025, Australian residents had installed 43,517 solar batteries within just two months, averaging 888 installations per day. The total rated capacity of these batteries reached 825 MWh, nearing last year’s total installation of 852 MWh, with an average capacity of 19.0 kWh per battery.

This remarkable data reflects the beginning of a second revolution in Australian household electricity driven by home storage, following the rooftop solar boom that began 15 years ago. Australian residents and small businesses are rapidly transforming their suburban rooftops into some of the nation’s largest power stations. Reports indicate that solar battery systems are now more prevalent than backyard swimming pools in Australia. Local media has noted that the demand is so high that distributors and wholesalers are struggling to maintain stock. Warehouses are nearly empty, importers are overwhelmed, and installers are managing long waiting lists.

1. Surge in Home Storage Installations

Rooftop solar has become a key and growing contributor to Australia’s energy mix, accounting for 12.4% of total electricity generation in 2024 and 12.8% in the first half of 2025. As of mid-2025, Australia boasts 4.2 million residential photovoltaic systems with a total capacity of 26.8 GW. It is estimated that one in three Australian homes has installed a solar power system. In contrast, the number of home storage installations remains significantly lower than that of rooftop solar. By mid-2025, a total of 271,000 home batteries had been installed across Australia. According to the Department of Climate Change and Energy, only one in every 40 households has installed a battery. SunWiz reports that only 22.6% of new rooftop solar installations in 2024 included a paired battery.

For comparison, data from the German Solar Industry Association (BSW) indicates that in Germany, which has a similarly developed solar market, the penetration rate of home solar with storage reached 77% in 2023. Consequently, Australia’s grid faces immense challenges in accommodating solar energy and managing electricity dispatch. To mitigate peak demand and establish a more stable grid, while also reducing overall energy costs for residents, the Australian government launched the “Cheaper Home Batteries” initiative. Under this favorable policy, the number of newly installed storage batteries in July approached or even exceeded the number of new solar systems. For every 100 new solar systems, 72 batteries were installed. Notably, during the week of July 15 to 21, this figure surged to 137 batteries for every 100 solar systems. This indicates that not only are new solar systems being equipped with storage batteries, but existing systems are also adding batteries. The trend of integrating solar photovoltaic systems with storage solutions is significantly rising in Australia.

The Australian Competition and Consumer Commission (ACCC) recently reported that households with rooftop solar and home batteries pay, on average, 40% less in electricity bills compared to customers relying solely on the grid. The median annual electricity bill for conventional users in 2023-2024 was AUD 1,565 (approximately CNY 7,825). Households with rooftop solar saw their bills reduced by about 18% (down to AUD 1,279), while those with both solar and batteries experienced a 40% reduction in their median bills, bringing it down to AUD 936. Households connected to virtual power plants (a network sharing solar and battery energy) pay about 63% less than typical families, with annual bills dropping to AUD 580 (approximately CNY 2,900).

ACCC Commissioner Anna Brakey stated, “For Australians who can afford the upfront costs, home solar and battery systems remain an attractive option.” The Australian government’s “Cheap Home Battery Program” is helping lower battery prices and providing more households with opportunities to reduce their electricity costs.

2. Chinese Companies Seizing the Australian Home Storage Market

With government subsidy initiatives and increasing consumer demand for energy independence, Australia has become one of the most dynamic home battery markets globally. Historically reliant on imported batteries, Chinese brands have recently started to dominate the Australian battery storage market. According to SunWiz, Chinese manufacturers accounted for over 70% of the Australian battery industry in 2024, leaving other companies to compete for the remaining quarter of the market share. SunWiz Managing Director Warwick Johnston noted, “Just as China has established itself as a supplier of high-quality solar panels at very affordable prices, Chinese battery brands have also solidified their leadership position in the Australian market.” Recent reports from independent solar consultancy SunWiz indicate that Sigenergy topped the list of Australian battery manufacturers in March 2025, surpassing the previous year’s leader, Sungrow. Based on the month’s total energy consumption (kWh), Sigenergy captured a market share of 17.4%, outpacing all other brands. Although Sigenergy may not be a familiar name domestically, the company has strong roots, having been founded in 2022 by Xu Yingtong, known for leading Huawei’s inverter division to a seven-time championship, with a focus on overseas storage markets. In just three years, the company reportedly achieved revenues of CNY 1.33 billion in 2024, a staggering 22-fold increase year-on-year. Sungrow and BYD followed with market shares of 17.1% and 15.2%, respectively, while Tesla ranked fourth.

In a recent survey conducted by SolarQuotes, which involved 161 Australian home storage installations, Tesla and Sungrow were tied for first place as the best home battery systems for 2025, while newcomer Sigenergy ranked third, followed closely by BYD.

At a critical time when battery subsidies were being rolled out and the Australian market was expanding, Tesla encountered quality issues that allowed Chinese companies to capture market share. On September 16, the ACCC announced a large-scale recall of the Tesla Powerwall 2 home storage system due to the risk of battery thermal runaway. This recall affected approximately 18,000 units sold in Australia between November 2020 and June 2022, marking one of the largest single recalls in the global storage industry in recent years. According to the ACCC, 13 incidents of battery fires related to this model were recorded in 2024, including one fire in Victoria that resulted in the total destruction of a house with direct economic losses exceeding AUD 500,000. LG Energy, which previously held a significant share of the Australian home storage market, has become virtually absent due to quality issues. Australia’s “billion-dollar subsidy” is now benefiting Chinese companies.

3. Are Subsidies Running Out?

For Chinese companies, the rapidly growing home storage market in Australia presents a significant opportunity for expansion. The Labor government’s policies have concentrated demand for home storage, while the disparity between home energy storage and solar systems indicates substantial potential for growth in this market. However, due to overwhelming demand, recent analysis from SolarQuotes suggests that the AUD 2.3 billion subsidy may not last until the planned 2030 deadline. With an average battery capacity of 17 kWh as reported in July, if the federal subsidies are utilized, installations are projected to reach 133,000 in 2026 and 177,000 in 2027, leading to a depletion of funds by early 2028. This scenario assumes that all funds are allocated solely to batteries; when considering other costs, the funds may run out even sooner than expected. SolarQuotes analysts speculate that one possible way to extend the duration of subsidy funds is to lower the eligibility cap on battery capacity. This suggests that the subsidy-driven market incentive mechanism may not be sustainable, and Chinese manufacturers cannot solely rely on price subsidies to capture market share. For Chinese companies, seizing this critical window to adapt to changing consumer demands and establish long-term competitiveness will be essential.