Australia Initiates Solar Panel Recycling Pilot Amidst Significant Growth in Home Battery Installations

Australia Invests in Solar Recycling Amidst Battery Boom and Shifting Energy Trends

Australia has launched a national pilot scheme, funded by approximately $25 million, to manage the projected increase in end-of-life solar panel waste, with plans to establish up to 100 collection sites nationwide. Concurrently, the country has observed a substantial surge in home battery installations, driven by federal government subsidies, which led to over 183,000 battery units sold in the second half of 2025, equalling the total sales from the preceding five years. This growth in battery uptake has coincided with a reported decline in new rooftop solar panel installations and an initial contraction in the battery market in January 2026.

National Solar Panel Recycling Initiative

The Australian government has introduced a national pilot recycling scheme, funded between $24 million and $25 million, to address the anticipated 18-fold increase in solar panel waste by 2030. The initiative, announced in January and introduced by Treasurer Jim Chalmers and Environment Minister Murray Watt, aims to establish up to 100 collection sites across the country.

Approximately 4 million discarded rooftop solar panels are reportedly sent to landfills annually in Australia. While solar panels can last over 25 years, many are being decommissioned after an average of eight years due to homeowners upgrading to more efficient systems.

A Productivity Commission report highlighted that solar panels contain hazardous materials, including lead, cadmium, and lithium, which pose fire risks if not properly managed. They also contain valuable resources such as copper, aluminum, silicon, silver, and glass. Currently, most Australian states and territories permit solar panels to be sent to landfills, with exceptions in South Australia, Victoria, and the ACT.

Only about 17% of end-of-life solar panel components, primarily aluminum frames and junction boxes, are recovered for recycling. The majority are stockpiled, disposed of in landfills, or exported.

Recycling solar panels is estimated to be approximately six times more expensive than landfill disposal.

A primary barrier to a national recycling program is the cost of transporting panels to recycling centers, which can exceed the value of recovered materials. This has contributed to financial struggles and insolvencies among specialized solar PV recycling companies. Businesses importing solar panels into Australia are not currently legally responsible for end-of-life disposal.

The pilot scheme will test real-world collection, transport, and recycling processes to identify operational challenges and opportunities. Data collected from this program will inform a future product stewardship proposal, which is intended to legally obligate manufacturers, importers, and retailers to share responsibility for the disposal of their products.

The Productivity Commission estimated that such a stewardship scheme could deliver a net economic benefit with a present value of $7.3 billion. Industry bodies, including the Smart Energy Council, have expressed support for a national stewardship scheme, anticipating it could lead to an "urban-mining boom" and new investments in related sectors.

Growth and Trends in Home Battery Installations

Australia has experienced significant growth in its home battery market, with federal government subsidies playing a role in the increased uptake.

In the second half of 2025, over 183,000 battery units were sold, a fourfold increase compared to the same period in 2024, and equivalent to the total sales from 2020 to 2024 combined. By the end of 2025, over 450,000 batteries were installed across Australian homes and businesses.

The number of approved battery system models available to consumers increased by 65% in the second half of 2025, from 764 to 1,259. During this period, 13 new manufacturers entered the market, raising the total to 123. Sigenergy, a company launched in 2022, reportedly achieved market leadership in Australia by early 2025, holding a 25% market share.

The federal government's "Cheaper Home Batteries" rebate scheme, launched in July 2025, provides incentives that reduce the cost of a typical battery system by approximately 30%, or $4,000 for a 10-kilowatt-hour system. Energy Minister Chris Bowen stated that the scheme had reached approximately 200,000 installations since July.

The initial $2.3 billion budget for the scheme was projected to be depleted by mid-2026, ahead of its original 2030 target. In response, the government announced an additional $5 billion in funding and tightened eligibility criteria to prevent the sale of excessively large systems. Top postcodes for battery installations include Kellyville (2155) and Riverstone (2765) in Sydney, and Hoppers Crossing (3029) in Melbourne.

In January 2026, Australia's home battery market recorded a decline, marking the first contraction since the rebate's introduction. Small-scale battery registrations reached 983 megawatt-hours, a decrease from approximately 1.2 gigawatt-hours in December.

Industry analysts attributed this 17% decline primarily to installers' holiday breaks. Victoria was an exception, showing a 3% increase in registered home battery systems, while other states experienced contractions of over 20%. The average size of battery systems installed through the rebate continued to grow, reaching 35.64 kWh in January.

Rooftop Solar Installations

In 2025, installations of rooftop photovoltaic (PV) cells decreased by 20% compared to the previous year, totaling 254,664. This marked the first time since 2020 that annual rooftop PV installations did not exceed 300,000.

This trend suggests a potential shift in demand towards small-scale batteries, with approximately 4.3 million Australian households currently having solar installations.

Despite the decrease in new installations, the average size of new solar systems has increased to 10.6 kilowatts, up from 1.6 kilowatts about 15 years prior. Rooftop solar contributes significantly to the national electricity system, at times providing over half of the supply and meeting 14.2% of demand last year. Its combined capacity of 28.3 gigawatts surpasses that of Australia's fleet of coal-fired generators (22.5 gigawatts).

Rooftop solar registrations also declined in January 2026, with 244 megawatts of rooftop solar PV registered, representing a 32% decrease from December figures. This decline was noted as typical for January, mirroring figures from January 2025. Commercial solar installations in the 50–70 kilowatt (kW) segment showed a significant decline of 57% in January, while residential installations decreased by 24% month-on-month.

Broader Implications and Debates

The expansion of battery and solar adoption has generated discussion regarding its broader impacts. While the battery rebate scheme aims to reduce power bills, Associate Professor Rohan Best of Macquarie University suggested that subsidies might disproportionately benefit higher-income households.

The Clean Energy Council, however, countered that battery and solar adoption offers broader benefits, such as reducing peak demand by storing excess solar output and releasing it during evening hours, as well as supporting virtual power plants (VPPs). An Australian Competition and Consumer Commission (ACCC) analysis indicated that VPP participants generally pay lower power bills. Minister Bowen stated that the battery subsidy scheme empowers Australians to manage their power bills and contributes to a more affordable and reliable energy grid during peak demand.

In the second half of 2025, the number of approved inverter models increased by nearly 10% (from 1,897 to 1,965), and approved PV modules saw a 23% increase (from 2,596 to 3,195). By the end of December 2025, a total of 6,419 PV modules, inverters, and batteries were listed on the Clean Energy Council's approved product lists, marking a 24.5% increase from June 30, 2025.