Labor have been declared the winner of the 2025 Federal election and will likely form a majority government for a second term. Like most Federal elections in Australia this century, the result has big implications on energy policy that impacts solar, battery and electrification projects. So, where did we land and what are the impacts.
A major announcement in the lead up to the election was the $2.3 Billion ‘Cheaper Home Batteries Program’ from Labor, which now looks certain to come into effect on 01 July 2025. The program is projected to reduce the cost of installing a battery by around 30%, for batteries up to 50 kWh and 15% for batteries up to 100 kWh. The impact on the estimated cost of installing a 70 kW solar system with a 50 kWh battery can be seen in the images below, with and without the incentive, with a $18,800 reduction in the cost of the battery. This doesn’t yet make the battery a no-brainer, but once you factor in the potential benefits of reduced downtime and participation in a virtual power plant, which could make the payback much better for your operations.
From the announcements made to date, this is what we know:
This program represents a great opportunity to install a battery at your site, depending on your eligibility. For businesses that are not a ‘small business or community facility’ considering batteries <100 kWh for implementation before 01 Jul 2025, we recommend making the incentive a key part of the contract for when eligibility is confirmed.
To see how this will impact your site, and what savings and incentives you could receive:
The Labor government has generally been pro-renewable energy (relative to the Coalition) and this will likely continue in their second term. We therefore can expect continued support of agencies and programs such as the Australian Renewable Energy Agency (ARENA), the Clean Energy Finance Corporation, the Renewable Energy Target and the Guarantee of Origin scheme.
The impact of this will be the continuation and potential increase in incentives, funding and support for solar, battery and electrification projects in Australia.
Although Nuclear was unlikely to ever be implemented under a Coalition Government due to cost and timing, it would have likely delayed the closure of coal fired power and roll out of renewable energy on the grid. With nuclear now off the table we are likely to see the continued closure of coal fired generators and increased roll-out of solar and wind power on the grid. This will likely lead to more spikiness in energy prices with daytime electricity becoming cheaper and evening electricity becoming more expensive.
The impact of this will be solar projects becoming less attractive over time as the grid becomes saturated with solar. Batteries however will become more attractive as they are able to shift this energy into the high priced evening period and take advantage of price spikes with a virtual power plant (VPP).
Another Coalition policy announcement was a potential gas reservation policy on the East Coast, which if implemented well would have reduced natural gas prices particularly for commercial and industrial users. This is now off the table and gas prices will remain linked to the international gas price thanks to mot of Australia’s gas being exported to overseas customers as LNG. As such, gas prices are likely to remain high for the foreseeable future.
The impact of this, combined with more renewables on the grid, will be that electrification projects will become more and more attractive. The majority government also provides more certainty for businesses to invest in heat pump, electric boiler and thermal energy storage systems to electrify and displace fossil fuels.
To see how the 2025 federal election will impact your site, and what savings and incentives you could receive, please get in touch.