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NSW ESS and PDRS (ESCs and PRCs)

What is the NSW commercial battery rebate under PDRS from 1 September 2026?

Short answer

From 1 September 2026 the NSW Peak Demand Reduction Scheme adds commercial battery activities (BESS3, BESS4 and BESS5) that create PRCs for eligible apartment buildings, businesses and industrial sites. Batteries must be installed on or after that date, and the amount depends on the system design.

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

The NSW government has extended its Peak Demand Reduction Scheme beyond homes. From 1 September 2026, new battery activities cover apartment buildings, small and medium businesses, and larger commercial and industrial sites.

What starts on 1 September 2026

The new activities are BESS3, BESS4 and BESS5. As reported, they work like this:

Activity Who it is for Capacity
BESS3 Apartment buildings and similar See the scheme rules
BESS4 Small and medium businesses More than 20 kWh, up to 200 kWh usable
BESS5 Larger commercial and industrial More than 200 kWh, up to 30 MWh usable

Capacity thresholds and eligibility details come from the scheme documents, so check IPART and the NSW energy department for the current wording. Eligible installations must be on or after 1 September 2026.

How the incentive works

There is no fixed rebate. An accredited certificate provider creates PRCs based on the technical design of the battery system, and the customer gets value through a discount or a payment. Because the PRC price has been low (reported about $3 in 2026), the value comes from the number of PRCs, which is set by the design. See the PRC price answer.

How it sits with the federal program

The federal Cheaper Home Batteries Program covers batteries from 5 to 100 kWh usable, with only up to 50 kWh counted and with tiers that cut the benefit for larger sizes. A 150 kWh commercial battery therefore gets little or nothing federally, which is where the NSW commercial activities matter. Smaller commercial batteries may qualify for both, but check whether the rules allow one property to claim both and whether the battery is VPP-capable and CEC approved. The business battery rebate answer covers the federal side.

Practical points for installers

  • Confirm the ACP, its rates and its documentation list before you quote.
  • Confirm that the battery model and design match the activity’s technical requirements.
  • Date the commissioning carefully, since the 1 September 2026 start is a hard edge.
  • Plan for the grid connection, since commercial sites often need approvals and design work.
From the desk: commercial jobs run on engineering and approvals, and delays cost money. Build a schedule with grid approval, equipment lead times and certificate paperwork on one page, and confirm each with the customer.

What this means for you

If you are a business owner, ask the installer to show the PRC value, the federal STC value if it applies, and the net price as separate lines. If you are an installer, the new activities widen your NSW offer beyond homes, and you can still sell the federal STC portion to a trader such as Energy Merchants. See the NSW pillar, the battery STC overview and pricing.

Follow-up questions

People also ask

What sizes are covered?
Reported: BESS4 covers more than 20 kWh and up to 200 kWh of usable capacity, and BESS5 more than 200 kWh up to 30 MWh. Check IPART for the exact rules.
Is it a fixed rebate?
No. Eligible projects create PRCs based on the technical design of the system, so the value varies.
Can I also claim federal STCs?
Federal STCs apply to batteries from 5 to 100 kWh, with up to 50 kWh counted. Larger systems get nothing from that program.

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