NSW Expands Battery Incentives To Apartments And Businesses For The First Time

Three new battery incentive activities have launched under the NSW Peak Demand Reduction Scheme (PDRS), extending upfront battery discounts to apartment buildings, small and medium businesses and large commercial and industrial sites for the first time.

The expansion, which took effect on 1 September 2026, opens access to battery rebates for segments of the market that have historically been excluded from such schemes. It sits alongside updates to the existing residential battery activity (BESS1) and virtual power plant (VPP) activity (BESS2), which came into effect on 1 July 2026.

Australian energy retailer and solar and battery provider, Nectr, has welcomed the changes, describing them as one of the most significant expansions of the scheme since it began.

Nectr’s Managing Director, Hayden Barry, pointed to the gap the new activities are designed to address.

“For years, apartment residents and business owners have watched rebates pass them by while facing some of the highest peak demand charges in the state,” Barry observed.

“This expansion to the PDRS changes that. Whether it’s a strata building looking to bring down costs for every resident, or a small business trying to protect its margins from rising demand charges, there is now a genuine, government-backed pathway to a right-sized battery and real support available to help businesses and communities navigate it.”

Batteries for apartments

The BESS3 activity brings battery incentives to Class 2 apartment buildings with a minimum of four individual dwellings, giving strata communities a mechanism to reduce shared energy costs through battery storage.

Apartment buildings typically carry some of the highest peak demand charges in NSW but have historically been unable to access battery rebates. BESS3 reduces the upfront cost of a shared battery system by thousands of dollars and can be combined with federal rebates for additional savings.

Nectr has indicated it can help building managers bundle PDRS with the federal Cheaper Home Batteries Program where eligible.

Small and medium business access

The BESS4 activity gives small and medium businesses access to upfront battery incentives for the first time, sized to reduce peak demand exposure.

The incentive offers a substantial upfront discount on a battery system between 20 and 200 kWh. Rising peak demand charges have been squeezing SME margins, and Nectr has flagged that many business owners are not yet aware the incentive exists.

Nectr supports eligible businesses through CEC-approved battery selection, warranty compliance and solar system sizing.

Large commercial and industrial systems

BESS5 opens the PDRS to large-scale batteries for the first time, covering systems from over 200 kWh up to 30 MWh, with the incentive capped at the first 10,000 kWh of capacity.

The financial incentives at this scale are substantial. By way of example, a 5 MWh battery system could attract an estimated PDRS incentive of $787,857 without solar, rising to an estimated $1,175,714 – a 49 per cent increase – when paired with 2.5 MW of new solar. Actual returns depend on the PRC market price and the 10 MWh incentive cap, and BESS5 rule detail remains subject to consultation.

Nectr’s commercial team offers end-to-end technical scoping, including UL9540A compliance, licensed installation and demand response aggregation setup, along with commercial structuring and ROI modelling to help large energy users assess feasibility.

Stacking with other rebates

The new PDRS battery activities are designed to be combined with a number of existing federal and state incentives, potentially increasing total upfront savings.

The federal Cheaper Home Batteries Program can be stacked for the BESS3 and BESS4 battery portion under 100 kWh. Small-scale Technology Certificates (STCs) apply for solar PV up to 100 kW installed alongside a battery, while Large-scale Generation Certificates (LGCs) are available for larger solar installed with BESS4 (100 kW and above) or BESS5.

The NSW Energy Savings Scheme (ESS), which operates as the PDRS’s sister scheme, is available for businesses bundling wider efficiency works. Standard small business tax depreciation may also apply, subject to individual accountant advice.

Nectr recommends eligible customers seek independent advice to confirm which combinations apply to their specific site and circumstances.

Barry emphasised the importance of helping customers navigate the various incentive layers.

“Whether you’re a strata manager, a small business owner or you’re running a large industrial site, there is more support available than most people realise to bring down power bills,” he remarked.

“We’re here to help customers cut through the eligibility detail, understand what stacks with what, and get better business outcomes.”

Timing ahead of summer demand

The launch of the new incentives at the start of spring is intended to give homes and businesses time to install battery systems before the peak summer demand period, when cooling costs and peak demand charges are at their highest.

Nectr has more than 40,000 residential and business customers and is backed by global renewable energy solutions provider, Hanwha Group. The company holds long-term power purchase agreements with Australian wind and solar farms.

Last Updated on September 1, 2026 by Nick Ross