Discounts for larger systems will be wound back under a popular home battery scheme as the program’s budget is tripled.

The federal subsidy, which has been in place for five months, will get a generous top-up to $7.2bn across four years after initially being earmarked to cost $2.3bn.

The fund was thought to be running out rapidly, in part because households were installing systems up to the maximum subsidised size to take full advantage of the one-time offer.

Under the scheme, eligible households and small businesses have been able to secure a 30% discount on a home battery when installed alongside new or existing rooftop solar.

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Subsidies were available on batteries with capacities of between 5kWh and 100kWh, with the rebate applied to the first 50kWh.

Changes unveiled by the energy minister, Chris Bowen, on Saturday confirmed the first 50kWh of a system would still be eligible for support, but discounting would not be as generous per kWh for medium- and larger-sized batteries.

Staggering support in line with battery size would encourage more households to get the “right-sized” battery, the government said, and keep the scheme open to more households.

“We want more Aussie households to have access to batteries that are good for bills and good for the grid – because it means more cheap, fast, safe solar energy is available in our homes night or day, when and where it’s needed,” Bowen said.

From 1 May, systems up to 14kWh – deemed suitable for small households – would get the full 30% discount for each kWh.

Discounting would then taper off for medium-sized kits and again for large systems above 28 kWh.

Nepean Solar chief executive, Jim Hill, said the changes were a “huge relief”.

“A boom-and-bust cycle has been a hugely impactful feature of this industry, so this sensible change that ensures the long-term viability of our sector is a huge relief and we welcome it,” the head of the Sydney-based solar and battery installer said.

“As a small business, we need to be able to plan for the ordering of stock, training and upskilling staff, and indeed the taking on of new apprentices. This approach allows us to do this with confidence.”

The Smart Energy Council chief executive, John Grimes, welcomed the funding boost and backed the rebate changes to allow more households and businesses to get access.

“We are a responsible industry that believes in spreading the benefits of solar and batteries to as many people as possible,” he said.

“If that means changes to the rebate, we support that.”

Households that add a home battery can expect $600-$900 per year in savings on energy costs on top of the bill benefits from solar, based on Australian Energy Market Commission figures.