Australia Announces $81 Million Funding for Community Battery Deployment

Every community battery must have a capacity between 50 kW and 5 MW


The Australian Renewable Energy Agency (ARENA) has invited expressions of interest (EoI) for the first round of Community Batteries Funding of up to AU $120 million (~$81.2 million) to deploy community batteries across Australia.

The Community Batteries Funding Program is expected to facilitate the installation of community batteries nationwide to reduce energy costs and greenhouse gas emissions and alleviate strain on the power grid.

ARENA had invited proposals for the first round of the program, which involved a funding allocation of up to AU $20 million (~$13.5 million) to deploy at least five community batteries.

To qualify for funding, every community battery should have a capacity between 50 kW and 5 MW and be connected to the distribution network.

The first round of funding will be divided equally between two separate streams:

  • Stream A: This stream is designated for Distributed Network Service Providers (DNSPs), entities responsible for managing the local power distribution network.
  • Stream B: The second stream is for all eligible applicants other than DNSPs, such as community groups or businesses.

The federal budget announced in October 2022 included a A$200 million (~$134.98 million) allotment for the implementation of the Community Batteries for Household Solar initiative with the goal of installing 400 community batteries in Australia.

ARENA was allotted A$171 million (~$115.41 million) in funding to oversee the deployment of at least 342 of these batteries.

After completing the first round, the remainder of the funds will be utilized for a second round that would cater to projects with longer development timelines.

Australia’s Department of Climate Change, Energy, the Environment and Water (DCCEEW), which conducted the first round of applications for a similar program under the Business Grants Hub, is expected to deliver the first set of 58 batteries. The department is currently assessing the applications received.

Community batteries are designed to store excess solar energy in the distribution network, which can be used later. By doing so, they help to reduce household electricity costs and alleviate pressure on the local electricity grid.

According to ARENA CEO Darren Miller, community batteries are crucial in continuously optimizing distributed energy resources in the electricity grid.

Deploying such batteries will reduce network costs and alleviate constraints in areas with high solar penetration, leading to lower electricity costs for all consumers.

According to the latest Australian Energy Market Operator (AEMO) data, the total number of distributed energy resources is over 2.7 million. These resources include solar panels, batteries, wind turbines, and other technologies that generate or store electricity on a small scale, often for individual homes or businesses.

Over 190,527 new solar PV systems were registered across Australia in 2022, representing the largest share of new additions. Other technologies, such as batteries, wind turbines, and electric vehicles, also grew significantly.

As of the most recent update, the cumulative total of registered resources across Australia has reached over 12.8 million. Solar photovoltaic systems represent the largest share of cumulative registrations, followed by batteries, small wind turbines, and other technologies.

The data helps us understand the increasing adoption of distributed energy resources in Australia and the need for community batteries to support the integration of these resources into the grid.

In December last year, ARENA also announced A$176 million (~$118 million) in conditional funding to support eight grid-scale battery projects nationwide.

Recently, the agency also awarded AU$29.5 million (~$19.5 million) to the University of New South Wales’ (UNSW) School of Photovoltaic and Renewable Energy Engineering (SPREE) for research in solar technologies.