"We will accelerate the take-up of clean energy by redirecting money from fossil fuel tax breaks into support for battery storage in homes and businesses," Mr Bandt said.

People earning less than $80,000 before deductions would be entitled to an additional grant of up to $5000. The tax credits and low income grants would reduce each year to $1500 and $1000 by 2020-21 because the cost of battery storage is expected to fall over time.

Mr Bandt said the policy would cost $2.85 billion over the budget forward estimates period and the energy intensive aviation and oil and gas industries would lose accelerated depreciation tax breaks to pay for it.

Instead all businesses would be able to depreciate storage batteries over three years instead of 15 years at a modest additional cost of $38 million over four years.

Simon Hackett, chairman of Redflow, which will have a battery system based on zinc bromide technology available from mid-year.

The costings are estimated by the Parliamentary Budget Office and assume 1.2 million households will take up the credits and that 30,000 units will be installed in businesses.

Tesla is offering its Powerwall lithium ion battery storage system and AGL Energy and Bosch are also offering conventional lithium ion systems. Technology entrepreneur and Tesla electric car enthusiast Simon Hackett is chairman and largest shareholder of Redflow, which will have a residential battery system based on zinc bromide "flow" technology available from mid-year.

Mr Hackett said he welcomes any public sector incentives to encourage adoption of energy storage technology.

"Lowering the cost of buying home batteries will accelerate the adoption of this new technology, delivering benefits both to consumers and to grid operators, who can call upon these batteries in aggregate as a distributed 'virtual generator' rather than run up expensive fossil fuel-based generators during peak demand periods," he told The Australian Financial Review.

"The entire electricity system will become much more efficient and less expensive when grid operators recognise these opportunities by offering customers who own home batteries the opportunity to get paid to send energy back into the grid when the system needs it. It's absolutely a win-win scenario."