The subsidy frenzy forced the government to urgently reduce subsidies.

Australia will add 1.2 GWh of residential and commercial battery storage in December 2025, marking the second consecutive month that it has exceeded the GWh mark, indicating that the market is continuing to heat up under the impetus of subsidy policies.

1. Record-breaking monthly additions: Residential energy storage capacity registered through the Small Renewable Energy Scheme (SRES) reached 1,203 MWh in December 2025, marking the second consecutive month exceeding 1 GWh.

2. Market growth slowed but remained steady: The national market grew by 19% in the month (a slowdown from 42% in November), but the upward trend was clear and no plateau had yet appeared.

3. System capacity continues to increase: The national average system size has risen to 32.86 kWh (32.74 kWh in November). Users prefer larger capacity batteries to maximize subsidy benefits, and sales of small capacity products have declined.

4. The subsidy policy has yielded significant results: From July 1 to December 31, 184,700 households installed 4.27 GWh of energy storage systems and received a 30% discount (applicable to systems of 5-100 kWh, with the first 50 kWh fully subsidized).

5. Policy adjustments to address surging demand: In December, the government announced adjustments to the subsidy mechanism, with subsidies decreasing in tiers starting May 1, 2026 (full subsidy for ≤14kWh, decreasing for 14-28kWh, and further reduction for >28kWh) to avoid the budget being exhausted prematurely.