New South Wales used to run its own battery discount. In 2025 that moved into the federal Cheaper Home Batteries Program, and what remains in NSW is the Peak Demand Reduction Scheme (PDRS) incentive for connecting a battery to a virtual power plant.
What the incentive pays for
The PDRS creates certificates, called PRCs, for activities that reduce peak demand on the grid. Connecting a battery to an eligible VPP and agreeing to let it respond to demand is one of those activities. The value is passed through to the customer by the VPP provider or the installer, usually as a discount or bill credit.
How it relates to the federal rebate
The two work at different levels. The federal rebate gives STCs for installing the battery. The PDRS incentive rewards you for connecting it to a VPP. They are separate schemes with separate rules, so a battery can qualify for both, subject to the current eligibility terms.
Details that change
Capacity limits, amounts, whether solar is required and the length of the VPP contract have been revised more than once. Because they move, we do not quote a dollar amount here. Look at the NSW Government energy website for the current PDRS rules, and ask your VPP provider to confirm in writing that your battery and contract meet them.
Keeping evidence for the incentive
Because the incentive depends on a VPP connection and contract, the supporting evidence is different from the STC claim. Keep the signed VPP agreement, the commissioning record and the serial numbers together in one job file, so that whoever claims the PRCs can do so cleanly.
What this means for you and for installers
Homeowners should ask whether a quote includes a PDRS component and who provides the VPP service. Installers should keep records of the VPP agreement with the job file, since the incentive depends on the connection and contract. The battery STC pillar covers the federal side. See the PDRS BESS2 page for the activity rules, and how it works for how we handle STCs. For general stacking, read the incentive stack.