Climate Council: Solar and battery storage offer Australia protection from AU$1 billion monthly fuel price shocks

Accelerating solar deployment and electrification offers Australia’s most effective defence against volatile global energy markets, according to a new Climate Council report released.

This comes as petrol prices surge nearly 50% and the current US-Iran conflict costs motorists more than AU$1 billion (US$710 million) in March alone.

The community-funded not-for-profit’s analysis reveals that strategic investment in renewable energy, battery storage, and electrification can provide structural protection against international energy shocks.

The report comes as petrol prices have reached 253.4 cents per litre and diesel has climbed above AU$3 per litre, with modelling by Griffith University estimating the conflict could add an extra 5% to existing inflation.

“This is the second major global fuel shock in just four years,” the report states, highlighting how Australia’s dependence on importing more than 90% of its refined fuels creates immediate vulnerability – a vulnerability that renewable energy deployment directly addresses.

Rooftop solar delivering household energy independence

Approximately 400,000 Australian homes with rooftop solar paired with battery systems are achieving power bill reductions of up to 90% while insulating themselves from fossil fuel price volatility.

The Climate Council notes that these solar-plus-storage households represent a growing segment that has effectively decoupled from fossil fuel markets.

The Australian government’s Cheaper Home Batteries Program has been key to this uptake, supporting adoption alongside Australia’s world-leading rooftop solar deployment of over 3.6 million installations.

As such, the Climate Council urges the government to maintain strong support for the home battery scheme in the May budget.

Climate Council analysis shows that by the end of February 2026, renewable energy paired with large-scale battery storage had offset 30 petajoules of gas use in Australia’s main electricity grid. In just four months leading up to the report’s release, renewables combined with storage reduced gas consumption by 8.1 petajoules.

During the recent summer period, solar and wind generation paired with battery storage contributed to a 30% reduction in wholesale electricity prices compared to the prior year.

In addition, the Climate Council notes that the coupling of renewables, battery storage systems, and electric vehicles (EVs) could also boost energy security and protect households.

With 1.3 million electric or hybrid vehicles now on Australian roads, the country is avoiding almost 15 million litres of petrol and diesel weekly – a saving that has tripled in three years.

During March’s fuel price spike, EV and hybrid owners avoided approximately AU$50 million in additional fuel costs.

EV sales surged in March 2026, with battery-electric vehicles capturing 14.6% of the market. The integration of EVs with rooftop solar creates a powerful combination, allowing households to charge vehicles during peak solar generation and maximise self-consumption of renewable energy.

Industrial renewable energy transition and policy recommendations

Australia’s mining industry receives almost half of the AU$13 billion annual Fuel Tax Credit scheme.

The Climate Council recommends capping rebates for large mining corporations at AU$50 million, redirecting excess amounts to support zero-emissions machinery powered by renewable energy.

The report firmly rejects fossil fuel expansion as a solution, noting Australia has depleted 90% of its conventional crude oil reserves and exports 80% of its gas production despite domestic price increases.

The Climate Council’s budget submission calls for strengthening the Household Energy Upgrades Fund with zero-interest finance for solar and battery installations, and for implementing a gas exports tax to fund accelerated renewable energy.