Battery Energy Storage System (BESS)

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

A BESS, or battery energy storage system, is the whole package that stores electrical energy and returns it on demand. It includes the cells, the battery management system, the inverter or power conversion equipment, the controls, and the safety and cooling equipment.

Size ranges

The same term covers very different things. A home BESS might hold 10 to 15 kWh. A commercial BESS may be tens or hundreds of kWh. A utility-scale BESS can be hundreds of MWh and feed the grid directly.

In practice

For installers, the term appears in state schemes and network rules, which often say BESS where consumers say home battery. In Victoria, a solar PV or battery system is prescribed electrical work. In NSW, a commercial battery incentive has been reported from 1 September 2026, and the older residential BESS1 activity under the PDRS was suspended from 1 July 2025. See PDRS.

The federal Cheaper Home Batteries Program creates STCs for eligible batteries of 5 to 100 kWh usable, up to 50 kWh eligible. See battery STCs.

Worked example

A customer buys a 13.5 kWh system. The BESS is the battery, its inverter and the controls, supplied as one product. For the STC calculation, only the usable capacity matters, so an installer reads the datasheet for that figure, not the nominal. See usable capacity.

Common confusion

BESS is not a specific scheme or a certificate. It is a type of equipment. It is also not the same as VPP. A BESS is the hardware. A VPP is a service that coordinates many of them. See VPP.

Be careful when searching programs: some say “BESS” for large and commercial batteries and “home battery” for residential, and the eligibility rules differ.

See the battery submission guide, how it works and the glossary.