CANBERRA, May 24 (Xinhua) -- Plans to install Tesla batteries in 50,000 South Australian (SA) homes will go ahead under the new Liberal Party state government.

There had been fears that the former Labor government's policy to create the worlds "largest virtual power plant" would be scrapped by the new government, but State Energy Minister Dan van Holst Pellekaan hosed down those fears at an energy conference late on Wednesday.

"It's very important to be clear about this we are honoring the existing commitments around the Tesla virtual power plant (VPP)," van Holst Pellekaan told the Australian Energy Storage Conference in Adelaide.

"These are supported by a grant of 2 million Australian dollars (1.5 million U.S. dollars) and a loan of 30 million Australian dollars (22.7 million U.S. dollars) from the State Government."

The destiny of the free installation policy announced by SA's previous Labor government was unclear following the election of Premier Steven Marshall in March, but van Holst Pellekaan confirmed the Liberal government would implement both its own policy and its predecessors.

"Subject to private finance, and the first two phases' success, the third phase could grow to up to 50,000 home batteries connected to new solar installations, and this is in addition to our government's 40,000 home election commitment," van Holst Pellekaan said.

He added that gas would become a "less necessary" component of SA's energy mix as storage technology evolved and improved.

The states renewable energy strategy has come under fire in recent times following occasional blackouts.