In NSW the two programs do different jobs, so they stack. The federal Cheaper Home Batteries Program gives an upfront discount through STCs. The state’s Peak Demand Reduction Scheme (PDRS) rewards a battery that is connected to a virtual power plant, so it can be dispatched at peak times.
What happened to the old NSW rebate
NSW previously paid an upfront battery incentive through the PDRS activity known as BESS1. That has been suspended from 1 July 2025, which is when the federal program started. The state’s support moved to a model where the federal STC discount covers the purchase and a PDRS incentive covers VPP connection. NSW also started a commercial battery incentive from 1 September 2026, reported; check Energy NSW or the scheme administrator for current terms.
How the stack works
| Layer | What you get | How it arrives |
|---|---|---|
| Federal STCs | Discount on the installed price | On the invoice, via STC assignment |
| PDRS VPP incentive | Payment for connecting to an approved VPP | After connection, via a certificate provider |
| Retailer or VPP offer | Credits or event payments | On your bill or statement |
Peak Reduction Certificates (PRCs) are the certificates underlying the NSW incentive; they were reported at about $3 on the spot market, so the payment per battery reflects a certificate price that moves. See NSW battery incentive PRCs and NSW Peak Demand Reduction Scheme battery.
What to check before you sign
- The battery must be CEC-approved and VPP-capable for the federal side, and on the relevant list for the PDRS side.
- You need to sign up with a VPP provider that is participating in the NSW scheme.
- Ask who claims the PDRS incentive and whether the quote already reflects it.
- Confirm that the NSW incentive is paid on a capacity cap that may be lower than the 50 kWh federal ceiling.
What this means for installers
You are dealing with two certificate streams: STCs and PRCs. They have different registries, different evidence and different buyers. Keep them separate on the job file, and do not assume your STC trader handles PRCs. Mixed-up claims are a common cause of delays. For the federal side, see battery STCs and the installer guide.
From the desk: the federal discount stacks, but the NSW payment is not guaranteed money. It depends on the VPP, the certificate price and the cap. Do not quote it to a customer as a fixed number.
Homeowners can estimate the federal part in the battery STC calculator. For other states, see stacking in Victoria, Queensland, SA, Tasmania, the ACT and the NT.