Why battery prices are likely to rise in 2027

For the last few years the price of a home battery has been heading down. In 2027 that is likely to turn around, at least for a while. The reason is not the Australian economy. It is a tax change in China, and it lands on the same day the federal battery discount gets smaller. Here is what is changing and what we think it means if you are weighing up a battery.

China is ending its export rebate on batteries

Most home batteries installed in Australia are made in China, or built around cells made there. For years, Chinese manufacturers have been able to claim back part of the value added tax on the goods they export. That rebate made their export prices cheaper than they would otherwise be.

On 9 January 2026, China's Ministry of Finance and State Taxation Administration announced it was winding the rebate back:

• Solar panels: the 9% rebate was removed in full on 1 April 2026.
• Batteries: the rebate fell from 9% to 6% on 1 April 2026, and is removed in full on 1 January 2027.

The battery change covers lithium ion batteries and battery packs, which is what sits in a home battery.

Panels showed what happens next

Because panels lost their rebate in one go, they are a useful guide. Why Solar, an Australian solar business, says the panel part of system costs rose 9 to 10% straight away, and that most quotes had moved within weeks.

Batteries are being done in two steps, so the effect is spread out. The same business estimates the April step added roughly 3% to the cost of imported batteries, and expects about 6% more after January. That is their estimate, and it assumes the whole change is passed on. Manufacturers competing hard for sales may wear some of it.

Lithium is part of the story too

Separately, lithium has become more expensive. Prices in China have been rising since the middle of 2025. In January 2026, Asia Financial reported lithium carbonate futures at their highest level since November 2023, up 167% from the low of 2025.

Lithium is one ingredient in a battery, not the whole cost, so battery prices do not move by that much. But it adds to the upward pressure at the same time as the tax change.

The federal discount drops the same day

The second half of the picture is closer to home. Under the Cheaper Home Batteries Program, the discount is set by an STC factor, a number of certificates for each kWh of usable capacity:

• May to December 2026: 6.8
• From 1 January 2027: 5.7

It was 8.4 for the first four months of this year, so 6.8 is not the peak, but it is the highest the factor will be from here on. It steps down again every six months until 2030.

For a 10 kWh battery that is 68 certificates this year and 57 from January, which is 11 fewer. We have set out the sums for other sizes in our article on the battery rebate step down.

What it adds up to

Two things move against you on 1 January 2027: the discount is smaller, and the battery itself is likely to cost the installer more. A few things keep that in proportion.

• The rise should be modest. As a guide, 6% on $1,000 worth of battery hardware is $60. The labour, the switchboard work and the cabling do not change.
• It will not be a cliff. Chinese exporters are expected to ship as much as they can before the deadline, and batteries already in Australian warehouses were bought at the old price. Any rise feeds through as new stock arrives.
• No one can give you an exact number. It depends on the brand, the exchange rate and how much each manufacturer decides to absorb.

Our advice

If you have already made up your mind, it makes sense to have the battery installed before 31 December 2026. You keep the 6.8 factor and you are ahead of the export change. Bear in mind that it is the install date that counts, not the date of your quote or deposit, and the weeks before Christmas book out.

If you have not decided, do not let a deadline decide for you. Getting the size right for your home and your solar is worth more than the difference between December and February. A properly sized battery in the new year is a better result than the wrong one in a hurry.

If you would like a battery sized and priced for your home, get started here or have a look at the home batteries we install.