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.
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.