But extending the scheme could deliver long-lasting improvements to the national electricity grid, according to a major retailer, while also forcing down household energy bills.
Origin Energy issued the warning on Wednesday, while also revealing the scheme's popularity had seen electrification inquiries more than double and battery installations reach 1800 per day.
The news comes one day after federal Energy Minister Chris Bowen revealed Australian households had invested in 136,000 batteries since the launch of the nationwide rebate in July.
The Cheaper Home Batteries Program, announced in April, offers discounts of 30 per cent on small-scale, household batteries attached to rooftop solar systems.
Interest in the scheme inspired a 400 per cent rise in battery inquiries before its launch and lifted ongoing inquiries by almost 120 per cent, Origin electrification general manager Chris Zondanos said.
Battery installations recently climbed from 1500 installations per day in October to 1800 daily and their popularity had the potential to use all funds allocated to the rebate scheme by July 2026, he said.
"(The rebate) will probably run out by the middle of next year on this kind of run rate," Mr Zondanos told AAP.
"The year of the battery is now - we've been talking about it for the last couple of years, but affordability between the rebate and the price point has completely changed the game."
Having more batteries installed around the nation had already begun to flatten electricity demand as households consumed more power during solar peaks, he said.
But extending the rebate to deliver more batteries and encouraging consumers to sell stored energy back into the grid could make an even bigger impact.
"What we're going to see is more and more customers want to join virtual power plants because that's where the value is and that will help them reduce their bill size," Mr Zondanos said.
"We expect it will help stabilise (the network) quite a significant amount because we can access those batteries and put (energy) back in at peak times, which is typically between 5pm and 9pm."
Origin Energy recently launched three battery products designed to help consumers sell energy back to the grid, with varying levels of control and automation.
Other electricity retailers to offer virtual power plant features to consumers include Amber, AGL, Discover Energy and Engie.
Australia leads the world in rooftop solar adoption, with panels installed on more than four million households, but it had been slow to adopt batteries to store the energy.
More than 136,000 batteries had been purchased under the national rebate scheme since July, Mr Bowen told parliament on Tuesday, and he expected continued strong demand.
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