The batteries, like those being built by US company Tesla, store electricity from solar panels and other renewable energy sources.
Environment Minister Simon Corbell said the move would keep the ACT ahead of the curve in innovation.
"Low-cost energy storage is the missing link in the transition to a 100 per cent renewable energy grid," Mr Corbell said.
"The ACT is determined to play its part in developing this emerging industry."
The Government will award grants of up to $600,000 to businesses installing battery storage across Canberra from next year.
That pilot will lead into a renewable auction, aiming to install battery storage in 5,000 homes and businesses over four years.
It is hoped the auction will help achieve the ACT's target of 90 per cent renewable energy by 2020.
"The ACT Government has a vision for Canberra to become a globally recognised centre for renewable energy innovation and investment," Mr Corbell said.
"[This] sends a clear message to industry that the ACT is serious about tackling climate change and that this is the place to invest in renewable energy technology."