NSW Battery Incentives 2026: BESS3, BESS4 and BESS5 Guide

On 1 September 2026, NSW opened three new battery incentives under the Peak Demand Reduction Scheme (PDRS). One covers apartment buildings (BESS3), one covers small and medium businesses (BESS4) and one covers large commercial and industrial sites (BESS5).

If you run a business, own a commercial building or sit on a strata committee, this is the most useful battery support NSW has offered so far. This guide explains how it works in plain English.

Eligible incentives may apply. The amount depends on your battery, your site and your installer, so always confirm it in a written quote.

The short version

1. It's a discount, not a cheque - the incentive comes off the price in your installation quote.
2. It's bigger with solar - adding new solar within 90 days of the battery lifts the discount by about half again.
3. One go per site - a site can only use this discount once.
4. New batteries only - batteries commissioned before 1 September 2026 don't qualify.
5. Planning approval is needed - budget for a certifier (up to 200 kWh) or a council DA (above 200 kWh).
6. It stacks - you can combine it with the federal solar and battery discounts if you meet both sets of rules.

The three new activities at a glance

IPART, the scheme administrator, sets out the activities like this:

There is also BESS1, for single homes and very small sites (2 to 28 kWh), and a separate PDRS incentive for signing a battery up to a virtual power plant (VPP). This guide focuses on the three new activities.

How the scheme pays for your discount

The PDRS is a certificate scheme. When a battery is installed under an approved activity, an Accredited Certificate Provider (ACP) creates Peak Reduction Certificates (PRCs) based on how much the battery can cut demand at peak times.

Energy retailers are required by law to buy these certificates. The ACP sells them and passes the value back to you as a discount on the installation.

Two things follow from that:

1. There is no funding pool to run out - the scheme is legislated to 2050 and isn't capped like a grant round. The rules are reviewed regularly, though, and certificate values move with the market.
2. The discount varies - it depends on the battery's size and performance, where you are on the network, and how your installer and ACP price the job.

How much is the discount?

The NSW Government gives an indicative range. For both businesses and apartment buildings, it says the discount can be about 30 to 40 per cent off the cost of installing a battery when it goes in with new or additional solar, and about 20 to 30 per cent for a battery on its own.

Treat those as a guide only. The actual figure depends on:

1. The installer you choose - their margin and how they price the job.
2. The battery model - capacity and inverter output both matter.
3. Your building - site access, switchboard upgrades and any building work.
4. Admin and compliance costs - the ACP's costs to create the certificates.

The only way to know your number is to get quotes that show the discount as a separate line.

Want a number for your site? Send us your latest power and gas bills and we'll work out roughly what the discount could be, and whether a battery pays its way, at no cost. Email bills@omnienergysolutions.com.au.

Why solar makes the discount bigger

Batteries charged by solar are more likely to be full when the grid peaks on a hot afternoon or early evening. That's what the scheme is paying for, so it rewards solar and battery together.

To get the higher discount:

1. No solar yet - install new solar within 90 days before or after the battery.
2. Already have solar - add extra solar capacity within that same 90-day window.
3. For businesses - the new solar must be at least 25 per cent of the new battery's capacity. For example, a 120 kWh battery needs at least 30 kW of new solar.

As a rule of thumb, new solar lifts the battery discount by about 50 per cent. For example, if the discount on a battery with new solar worked out at $30,000, the same battery without solar would get about $20,000. These numbers are only there to show the ratio. Your quote sets the real figure.

Solar panels can also qualify for small-scale technology certificates under the federal Small-scale Renewable Energy Scheme, so the solar side often carries its own discount.

Who is eligible

BESS4 (small and medium businesses, 20 to 200 kWh) 1. Site type - not a residential building and not a data centre. 2. Product - the battery must be on the Clean Energy Council's approved batteries list. 3. Size - usable capacity above 20 kWh and up to 200 kWh, counted as 90 per cent of the nominal capacity on that list. 4. First time - no earlier PDRS battery installation at the site. 5. Behind the meter - connected on your side of the meter, with network approval and planning approval (usually a Complying Development Certificate) in place. 6. Installer - accredited by Solar Accreditation Australia (SAA).

BESS5 (commercial and industrial, 200 kWh to 30 MWh) 1. Site type - not a residential building and not a data centre. 2. Fire safety - the battery must be tested and pass the required fire safety standards. 3. Installer - a licensed installer (check the licence on the Service NSW website). 4. Planning approval - generally a development application (DA) to council. 5. One discount per site - BESS4 and BESS5 can't both be claimed at the same site.

BESS3 (apartment buildings, 20 to 200 kWh) 1. Building - at least 4 units, with no upper limit. 2. Product - on the Clean Energy Council's approved list and installed outdoors. 3. Installer - SAA accredited. 4. Approval - the owners corporation has to pass a sustainability infrastructure resolution at a general meeting.

What it costs you: minimum payments

To stop "free battery" offers, IPART sets a minimum amount the customer must pay towards the job:

If a finance provider funds the job, they can make the minimum payment for you and it becomes part of the loan. Any offer of a battery for nothing at these sizes should be a red flag.

Planning approval: budget for it

Every battery under these activities needs the right planning approval, and it's easy to leave out of the budget.

1. Up to 200 kWh (BESS3 and BESS4) - usually a Complying Development Certificate (CDC). You'll need to engage a private certifier, which adds some cost and a few weeks.
2. Over 200 kWh (BESS5) - generally a development application (DA) to council. Some councils exempt certain systems, but plan on needing one until your council confirms otherwise.

Network approval from your distributor is separate, and it's needed as well.

Can you combine it with other discounts?

Yes, if you meet the rules for each. The NSW Government confirms you can combine this battery discount with:

1. Federal solar discounts - STCs under the Small-scale Renewable Energy Scheme.
2. The federal Cheaper Home Batteries Program - if your battery is eligible for both.

Ask your installer to show each discount as its own line, so you can see exactly what you're getting.

How to get the discount, step by step

1. Start with your bills - send us your latest power and gas bills and 12 months of interval data if you have it. That tells us when your site peaks and how big the battery should be.
2. Get the battery sized properly - a battery that's too small won't cut your peaks, and one that's too big costs more than it saves.
3. Get quotes that show the discount - the quote should show the battery, the total cost and the discount as a line item.
4. Get planning approval - a CDC through a certifier up to 200 kWh, or a DA above that.
5. Read the fact sheet - for BESS3 and BESS4, the installer must give you IPART's fact sheet with the quote.
6. Sign the nomination form - this lets the ACP create the certificates. Keep a copy.
7. Install and commission - approvals in place, installed by the right accredited or licensed installer.
8. Expect a check - an auditor may contact you, and IPART or Building Commission NSW inspectors may visit.

Red flags to watch for

1. Door knocking - salespeople can't knock on your door uninvited under the PDRS.
2. No discount line on the quote - if you can't see it, you can't check it.
3. Below the minimum payment - a BESS3 or BESS4 job quoted under the minimum isn't compliant.
4. No sizing from your data - a quote that ignores your usage is guessing.
5. Off-grid sites - they aren't eligible, because the scheme exists to cut peak demand on the grid.

Is a battery right for your site?

A battery earns its keep when it does more than one job. For most businesses, that means:

1. Storing solar - using more of your own solar instead of exporting it cheaply.
2. Cutting demand charges - on many business tariffs, one spike sets the demand charge for the month. A battery can cover that spike.
3. Working around a full network - where the network can't give a site a bigger supply, a battery can cover the peak, and it's usually much faster than a supply upgrade.
4. Backup - keeping key loads running during an outage, if backup is set up.

Batteries don't suit every site. If most of your use is at night and you have no room for solar, or your bills are small, the numbers may not stack up. Any savings are estimates until they're modelled on your own data.

How Omni can help

We start with your power and gas bills, find the cheapest retail rates first, then model whether a battery, solar or both make sense for your site. We size the system from your interval data, make sure the quote shows the PDRS discount clearly, and work with accredited installers to get it in.

Get a free battery check

Not sure which activity fits, or whether a battery stacks up? Send us your power and gas bills. We'll check your rates, model a battery and solar from your own data, and show the discount as its own line on the quote.

1. Email your bills - bills@omnienergysolutions.com.au
2. Call us - 0433 679 324
3. Send us a message - through our contact page

No obligation. You'll get a plain answer on whether a battery, solar or both make sense for your site.

More detail by activity

1. BESS3: batteries for apartment buildings
2. BESS4: batteries for small and medium businesses
3. BESS5: commercial and industrial batteries

Sources: NSW Climate and Energy Action, Batteries for businesses incentive, Batteries for apartment buildings incentive, IPART, Peak Shifting and IPART, Upgrade costs. Rules checked 11 November 2026; they change, so check the official pages before you sign.