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NSW ESS and PDRS (ESCs and PRCs)

BESS1 suspended: what does it mean, and what is BESS2?

Short answer

BESS1, the NSW Peak Demand Reduction Scheme's upfront home battery incentive, has been suspended from 1 July 2025, so new installs no longer create PRCs under it. BESS2, the incentive for connecting a battery to a virtual power plant, continues alongside the federal STC discount.

Written and checked by the Energy Merchants desk · Reviewed 3 October 2026 · For installers

NSW used to run its own upfront incentive for home batteries through the Peak Demand Reduction Scheme (PDRS). That activity is called BESS1. When the federal Cheaper Home Batteries Program arrived on 1 July 2025, the NSW government suspended BESS1 from the same date to avoid doubling up and to focus its own money elsewhere.

What “suspended” means

  • Batteries commissioned from 1 July 2025 no longer create PRCs under BESS1.
  • Installations commissioned before that date were handled under the rules then in force.
  • A suspension is a pause set by the scheme rules, not a permanent repeal. Check IPART and the NSW energy department for the current status before you rely on it.

For the installer, the practical result is that the NSW battery discount stopped being an upfront line in the quote, and the federal STC discount became the main one. For a typical size see the battery rebate by size.

BESS2 is still there

BESS2 pays for connecting an eligible battery to a virtual power plant, through an accredited certificate provider. The result is PRCs, created because the battery can be called on to reduce demand at peak times. It stacks with the federal discount, which is why the two schemes complement each other. Reported amounts from July 2025 put the VPP incentive for a household battery up to about $1,500, but it varies by capacity and provider, so ask the ACP for the figure.

Activity Status
BESS1 (upfront home battery) Suspended from 1 July 2025
BESS2 (VPP connection) Continues
BESS3, BESS4, BESS5 (commercial, apartments) From 1 September 2026
Federal STC discount Applies in NSW

BESS2, VPP onboarding and installers

Because BESS2 depends on a VPP, installers need to line up the VPP before commissioning. The usual sequence is:

  1. Choose a battery that is CEC approved and VPP-capable, which the federal program already requires.
  2. Confirm the VPP provider and ACP are approved for the activity and that the battery model is supported.
  3. Complete the VPP enrolment and ACP paperwork alongside your federal evidence.
  4. The ACP creates and sells the PRCs and passes value to the customer.

The PRC price has been low (reported about $3), so the dollar value is driven by the number of certificates created, which scales with the battery. See the PRC price answer.

From the desk: do not promise a VPP payment on a quote unless the provider has confirmed it in writing for that model and date. Rules and amounts have moved twice in 12 months.

What this means for installers

In NSW, price the battery with the federal discount first, then add BESS2 as a separate item. The overlap between federal STC evidence and VPP evidence is a good reason to keep one job folder with both sets of photos and serials. See the NSW pillar, the battery STC overview, the installer guide and pricing.

Follow-up questions

People also ask

Does BESS1 suspended mean NSW has no battery incentive?
No. The federal STC discount applies in NSW, BESS2 pays for VPP connection, and from 1 September 2026 there are commercial battery activities.
Do installers need to be an ACP for BESS2?
PRCs are created by accredited certificate providers. Installers usually work with an ACP rather than creating the certificates themselves.
Does the VPP need to be approved?
Yes. Connection to an approved VPP provider is the basis of the incentive.

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