There is nothing inherently fraudulent about a home battery. For households with rooftop solar, the ability to store electricity generated during the day and use it at night can make perfectly good economic sense. Batteries may also have a useful role in a more decentralised electricity system.

The problem begins when governments decide that a useful technology must be installed everywhere, quickly, and with somebody else's money. Australia's Cheaper Home Batteries Program provides an illuminating case study in what happens when governments manufacture demand faster than an industry can safely and efficiently supply it. The Commonwealth program, which began in July 2025, was designed to provide roughly a 30 per cent discount on eligible battery installations through the Small-scale Renewable Energy Scheme. Predictably, Australians responded to the incentive. So did businesses.

Whenever governments attach billions of dollars to a particular product, they do more than reduce its price. They change the structure of the market. Companies enter because the subsidy exists. Installers expand rapidly. Salespeople discover a new source of commissions. Consumers who might otherwise have waited decide to buy before the rules change. Existing firms race to capture market share while new operators arrive hoping to collect some of the money flowing through the system.

That does not mean everyone involved is dishonest. Most will not be. But it changes the incentives confronting everyone. Jo Nova (link below) has drawn attention to the less attractive side of Australia's battery boom: allegations of dubious operators, poor workmanship, regulatory failures and the possibility that public subsidies have created precisely the sort of environment in which opportunists flourish.

The official figures are troubling enough without exaggeration. The Clean Energy Regulator's published inspection results show that only 36.95 per cent of inspected battery installations were rated adequate and safe. Another 62.28 per cent were classified as substandard because of technical non-compliance, although they were considered safe to remain in operation. Some 0.76 per cent were classified as unsafe.

That distinction is important to consider. It would be misleading to say that more than 60 per cent of inspected Australian batteries were dangerous. They were not. Many of the defects involved compliance issues rather than an immediate electrical or fire hazard. But it is hardly reassuring that, in an industry being deliberately accelerated by government policy, almost two-thirds of the installations inspected by the regulator failed to achieve the adequate classification.

Researchers at the University of Technology Sydney similarly noted earlier this year that more than 60 per cent of inspected installations were substandard, while stressing that the inspection sample represented only about 0.5 per cent of installations and that the problems generally concerned installation rather than defective batteries themselves.

That is an important qualification, but it also points directly to the policy problem. The technology itself need not be defective for a subsidy-driven rollout to create risks. The weak point can be the human system surrounding it.

Governments can order a rapid energy transformation on paper. They cannot instantly manufacture experienced electricians, competent installers, inspectors and reputable companies. When subsidised demand suddenly increases, the available pool of skilled labour must service far more customers. Businesses recruit rapidly, experienced workers become stretched, and inexperienced participants enter the industry. Speed then becomes part of the business model.

This is especially concerning with batteries because these are not harmless consumer appliances. They store substantial amounts of energy and require correct electrical installation, appropriate positioning, protection and management. A poorly fitted kitchen cupboard is an inconvenience. Poor electrical work involving a large lithium battery can be something considerably more serious.

The regulatory response itself demonstrates that authorities recognise the problem. The Clean Energy Regulator increased its inspection activity and introduced additional compliance requirements, while eligible installations must satisfy technical and accreditation conditions.

There has already been at least one highly publicised warning. A battery installed at a Western Australian home reportedly caught fire after loose terminals caused arcing. The government noted that the particular installation had not received a subsidy and rejected claims of systemic failure, but the incident nevertheless contributed to increased regulatory attention.

The broader lesson extends well beyond batteries. Government subsidies frequently produce what might be called artificial gold rushes. The government identifies a socially desirable product, makes enormous amounts of money available and then celebrates when demand explodes. The explosion in demand is subsequently presented as evidence that consumers wanted the product all along.

But subsidised demand is not ordinary demand. If the government offered Australians a 30 per cent subsidy on refrigerators tomorrow, refrigerator sales would soar. Businesses would enter the refrigerator market. Existing retailers would increase advertising. Consumers would bring forward purchases they might otherwise have made years later. None of this would prove that Australia had suffered a spontaneous refrigerator revolution. It would prove that people respond to prices.

The same principle applies to batteries, electric vehicles, solar panels and countless other technologies. Subsidies can accelerate adoption, but acceleration has costs. It attracts marginal operators, strains regulatory systems, creates opportunities for fraud and encourages consumers to make decisions partly because they fear missing a government incentive.

There is another distortion. Once an industry becomes dependent upon government support, businesses acquire a strong interest in preserving that support. A constituency emerges whose income depends upon continuation of the policy. What began as an environmental or energy program gradually develops its own political economy.

The consumer can also lose sight of the underlying economics. The important question should be straightforward: does this battery make economic sense for this household at its real cost? Instead, the question becomes: how much government money can I obtain if I buy the battery now? Those are not the same calculation.

None of this establishes that home batteries themselves are a scam. That description goes too far if applied to the technology itself. Many Australians will obtain perfectly satisfactory systems from competent installers, and batteries will undoubtedly remain part of Australia's electricity system.

The potential scam lies elsewhere: in creating the impression that because government has decided to subsidise something heavily, rapid mass deployment must therefore represent sound economics.

Australia has seen versions of this move before. Whenever governments pour money rapidly into a politically favoured industry, the first people through the door are not exclusively engineers and idealists. Entrepreneurs arrive, followed by salesmen, subsidy harvesters and, eventually, people who recognise that loosely supervised public money presents opportunities.

The solution is not to ban batteries. It is to restore the market test that subsidies partially remove. Let battery manufacturers compete on performance. Let installers compete on price and reputation. Let households calculate whether storing their own solar electricity makes financial sense. Maintain rigorous electrical safety standards and punish fraud severely. But government should be extremely cautious about creating a national buying frenzy and then acting surprised when quality control struggles to keep pace.

The most revealing statistic from the present controversy is therefore not the number of batteries installed. Governments naturally advertise that figure as evidence of success. The more interesting question is what would have happened without billions of dollars of public assistance.

If batteries already offer households compelling economics, they should increasingly sell themselves as their price falls. If they require enormous subsidies to generate mass adoption, then taxpayers are helping manufacture the apparent market for them. And when government manufactures a gold rush, it should not be surprised when some of the people who arrive are carrying shovels for reasons that have very little to do with saving the planet, and woke nonsense like that.

https://www.joannenova.com.au/2026/09/surprise-government-battery-bubble-feeds-crime-corruption-incompetence-safety-breaches/