Rooftop Solar Climbs to New Heights Amid Battery Safety Scrutiny

SYDNEY/JAKARTA/BERLIN – The global rooftop solar sector is now in an unusual situation due to its recent growth; Residential photovoltaics are being incentivized with decreased pricing, increasing energy costs, and favorable policy's for batteries but at the same time concerns about the safety of these batteries have risen as a result of several large-lithium battery fires that have happened around the USA (California, New Jersey, New York).

Nowhere is this tension more visible than in Australia, where rooftop solar installations just broke all previous records.

Australian households and businesses installed more rooftop solar in April 2026 than in any other month on record, according to new data from solar and storage market analyst SunWiz. A total of 442 MW of sub-100 kW rooftop PV capacity was registered nationwide-a staggering 31% increase from the 341 MW registered in March and nearly double the 225 MW installed in April 2025.

"We have now reached the strongest month in the history of STC (small-scale technology certificates)," said SunWiz Managing Director Warwick Johnston, adding that the market is now running 35% ahead of the same point in 2025.

All states in Australia showed strong growth in April with NSW adding 143MW of capacity (35% increase over last month). WA had 62% growth in NSW with Queensland showing 36% monthly increases. The standout segment was the 20-30kWs which added almost double of the capacity installed in March with 98% increase. The 15-20kW received 61% growth and 30-50kW grew by 45%.

The shift toward larger installations pushed the national average system size up to 11.35 kW.

At first glance, the connection between home batteries and rooftop solar might seem straightforward: homeowners who install batteries need enough generating capacity to charge them. But Australia's April surge tells a more nuanced story-one in which a government battery subsidy inadvertently supercharged the entire residential PV market.

Johnston attributed the solar registration surge largely to changes in the federal government's Cheaper Home Batteries Program, which has supported the installation of more than 350,000 small-scale battery energy storage systems over the past 10 months. Changes to the rebate scheme, which provides discounts of up to 30% on the upfront cost of installing small-scale battery systems alongside new or existing rooftop solar, took effect on 1 May 2026.

The revised program maintains the full discount on the first 14 kWh of usable battery capacity, while batteries between 14–20 kWh receive 60% of the discount, and units in the 28–50 kWh range receive only 15%. The tiered structure, which effectively favors mid-sized installations over very large ones, triggered what industry observers describe as a "rush" among households seeking to lock in more favorable terms ahead of the deadline.

But the impact extended far beyond batteries themselves.

"The rebate cut sent households scrambling for large-format (40–50 kWh) batteries, and the bigger solar arrays needed to run them followed, turning the Cheaper Home Battery Program into a multiplier well beyond its original scope," Johnston explained.

This pattern-battery subsidies driving solar expansion-has been evident since the program's early days. In March 2026 alone, the program supported the deployment of about 300,000 batteries, with average battery size reaching a record 40 kWh. New South Wales recorded over 600 MWh of battery installations that month, a 44% increase from February and a new state-level high.

While Australia's rooftop solar market is red-hot, global trends remain mixed.

Overall, there has been a marked cooling trend in residential solar installations throughout Europe over the past few years. For example, home rooftop solar systems made up only 14% of total solar additions within the EU during 2025, down from 19% in 2024 and 28% in 2023. According to SolarPower Europe, this decline can be attributed to diminishing urgency to install solar energy systems following the end of the energy crisis; phased-out direct federal and state incentives for rooftop solar projects; and consumers experiencing less pressure from rising electricity rates.

"The momentum generated by residential solar following the Ukraine war, energy insecurity, and elevated electricity prices is now branching into adjacent technologies," noted an EUPD report, pointing to energy storage, balcony systems, and smart energy management as the new frontiers of residential solar growth.

In contrast, the situation in the United States is much more mixed. For instance, California's Net Energy Metering (NEM) 3.0 policy has cut solar export compensation rates by 75%-80%, thereby extending the payback period on residential solar and decreasing sales of residential solar systems by 60%-80% since the introduction of NEM 3.0 in April 2023; nationwide, however, the Solar Energy Industries Association (SEIA) reports that on average, a residential solar project was completed every 59 seconds across America during 2025, resulting in an estimated total of nearly six million residential solar systems installed throughout the United States.

"Even when policy is trending against it, the fundamental economics of solar remain compelling," said Shawn Shaw, CEO of Camelot Energy Group. "Solar PV remains the fastest electricity source to deploy and the lowest-cost form of new generation. More importantly, as grids become increasingly dependent on storage to balance load, solar remains the most economical way to charge those batteries today."

The contradiction is less puzzling than it seems. As grid electricity prices rise and feed-in tariffs decline, self-consumption-using solar electricity directly rather than selling it back to the grid-has become the primary economic driver for both solar and storage. Batteries allow households to store excess daytime generation for evening use, bypassing expensive peak grid rates.

In California's NEM 3.0 regime, the economics of standalone solar have deteriorated so dramatically that batteries have effectively become necessary for residential solar to remain financially viable. "Under the new Net Billing Tariff, solar systems without storage face significantly reduced financial returns," analysis shows.

Australia's Cheaper Home Batteries Program has accelerated this same logic, but with an unexpected twist: by subsidizing batteries, the program inadvertently increased demand for larger solar systems, creating a virtuous cycle now known as the "multiplier effect".

Research by BNEF suggests rooftop solar will reach 50.8 gigawatts of installed capacity in Australia by 2035; additionally, continued rapid growth in behind-the-meter battery markets will bolster new installations and larger systems. The global market for the same type of PV is estimated at 214 billion Chinese yuan (rmb) by 2032, representing a compound annual growth rate of nearly 10%.

However, as deployments grow, so will concerns around safety. The industry is working hard to create safer battery chemistries (e.g., lithium-ion phosphate [LFP] and solid-state), while regulators are competing to create consistent manufacturing and installation safety standards.

What is becoming clearer is that the boom in batteries has transitioned from being simply an accessory to rooftop solar, to being a major driving force behind installation rates. According to Australian data as of April 2026, when battery economics are aligned with consumer demand, the outcome can be historic.