Executive Summary
The Federal Government's Cheaper Home Batteries program and Solar Sharer tariff represent a fundamental shift in grid investment philosophy: public capital deployed into private assets. At current adoption trajectories, average household storage will exceed 25 kilowatt-hours—the threshold at which a home battery ceases to be a backup device and becomes a de facto grid asset.
Yet unlike traditional infrastructure, these assets operate without standardised monitoring, orchestration protocols, or network service obligations. This article examines the grid physics of mass storage deployment, the policy gaps in current rebate design, and the framework required to transform distributed storage from potential liability into genuine grid infrastructure.
The Paradox
The logic was sound. Rather than spend billions upgrading transformers and cables to handle rooftop solar exports, redirect that capital to batteries that absorb the surplus locally. The homeowner benefits. The grid benefits. Everyone wins.
Except for one problem: the grid cannot see what it paid for.
When a Distribution Network Service Provider (DNSP) invests in a transformer, that asset is monitored, maintained, and dispatched according to network needs. When the same capital flows through a rebate into a private battery, the DNSP knows only that a meter exists at that address. The battery's state of charge, health, and behaviour remain invisible.
The Rebate Paradox
Consider the contrast with other public infrastructure investments:
| Investment | Public Visibility | Public Control |
|---|---|---|
| Roads | Traffic sensors, usage data | Speed limits, tolling |
| Water | Smart meters, pressure monitoring | Demand management, restrictions |
| Battery Rebates | Meter data only | None |
We have created a class of publicly-subsidised infrastructure with less visibility and control than a suburban traffic light. This creates a "policy gap" where transmission-scale batteries (100MWh+) can access grid service revenues, but aggregated residential fleets cannot—despite providing equivalent value.
The Duck Curve Lesson
In the 2010s, solar rebates drove adoption without coordination, creating the "duck curve"—midday oversupply and evening ramping stress. The battery rebate risks repeating this failure pattern at greater scale. Subsidising hardware without governing software guarantees infrastructure stress.
The Physics
At what point does a private appliance become public infrastructure? For batteries, the answer is approximately 25 kilowatt-hours.
Below this threshold, a home battery functions as a load modifier. Above it, a neighbourhood of batteries becomes a distributed power station. A 25kWh battery with a three-phase inverter can import or export at 10-11kW continuously.
When the "Solar Sharer" tariff offers free power at 11:00 AM, 100 households responding simultaneously create a 1.1 megawatt load step on a residential feeder. This synchronised behaviour turns a solution into a problem.
Illustrative Scenario: Maplewood Circuit
Consider a representative 42-home street in outer Melbourne with 38 installations of 25kWh systems.
Unorchestrated
Tuesday, 11:00 AM. Solar Sharer window opens. Cloud cover limits rooftop generation. All 38 batteries charge at maximum rate.
Transformer sees 418kW load step (84% capacity). Thermal protection trips.
Result: 3-hour outage.
Orchestrated
Same Tuesday. Dynamic Operating Envelope (DOE) detects transformer thermal limit approach.
Batteries signalled to charge at 3kW. Full charge achieved over 2 hours.
Result: No outage. No damage.
The Coordination Framework
The 25kWh threshold is a principle, not a regulation. The actionable policy is an Orchestration Capability Standard. This moves beyond "VPP-capable" labels to active grid participation.
Core Principles
- Telemetry as Rebate Condition: No visibility, no subsidy. Batteries must report state of charge and capacity to network operators.
- Orchestrated Charging: Replace static time-windows with Dynamic Operating Envelopes (DOEs) that reflect real-time local constraints.
- Network Service Compensation: Pay households for infrastructure deferral, not just energy arbitrage.
- Consumer Agency: Opt-out rights for specific events preserve social license.
International Context
- Germany: Grid-support capabilities required for feed-in tariffs.
- California: SGIP rebate levels tied to demand response participation.
- UK: Flexibility Services market allows DNSPs to contract residential fleets.
- Australia: Currently an outlier—subsidising hardware without mandating the software.
The Implementation Bridge
Implementation requires a narrative pivot from "control" to "reward". We propose a Smart Rebate structure:
- —
Tier 1 (Base): Standard rebate for compliant hardware.
- —
Tier 2 (Grid-Ready): Enhanced rebate for systems enrolling in a 5-year Network Support Agreement.
The Imperative
Australia has made a bet that distributed storage equals grid resilience. This is only true if assets are coordinated. An unorchestrated fleet is a liability that stresses infrastructure and increases costs for all ratepayers—an equity issue as much as an engineering one.
Board Questions
For executives and policymakers:
- ? Does our rebate policy require telemetry as a condition of subsidy?
- ? At what capacity threshold do private assets acquire public obligations?
- ? Are we compensating for electrons moved (arbitrage) or infrastructure deferred (network value)?
The December 2025 revisions addressed capacity. The next revision must address coordination. We conclude with three non-negotiables for a sustainable distributed grid:
1. Visibility
We cannot orchestrate what we cannot see. Telemetry must be the price of public subsidy.
2. Alignment
Incentives must align private charging behaviour with public network health via Dynamic Operating Envelopes.
3. Value
Households must be paid for the infrastructure upgrades they defer, unlocking the true value of the battery fleet.
The storage threshold is here. The time to complete the policy framework is measured in months, not years.