If you run a business in NSW and have been considering battery storage, there is now a new incentive worth knowing about.
Often called the NSW commercial battery rebate, it works as an upfront discount on the cost of installing battery storage at your business premises.
From 1 September 2026, eligible businesses can receive an upfront discount when installing a new battery through the NSW Government’s Peak Demand Reduction Scheme (PDRS).
The new battery activities are called BESS4 and BESS5. While the names sound technical, the basic idea is quite simple: the incentive helps reduce the upfront cost of installing battery storage, while encouraging businesses to store energy and reduce their electricity use during periods of high demand.
What are BESS4 and BESS5?
BESS4 is designed for small and medium businesses, while BESS5 covers larger commercial and industrial battery installations.
The main difference is the size of the battery:
- BESS4: More than 20 kWh and up to 200 kWh of usable battery capacity
- BESS5: More than 200 kWh and up to 30 MWh
- Under BESS5, the incentive applies to the first 10,000 kWh of battery capacity.
Both activities are intended for businesses rather than residential buildings or data centres.
How much can businesses save?
The NSW Government describes the incentive as an upfront discount, generally included directly in the installation quote.
The actual amount depends on the battery, system design, installation and other factors.
As a general guide, the NSW Government says businesses may receive around:
- 20 to 30% off when installing a battery on its own
- 30 to 40% off when a battery is installed with new or additional solar capacity.
For larger commercial projects, the financial benefit can therefore become significant.
Why add solar with the battery?
A battery becomes much more useful when there is enough solar generation to charge it during the day.
If your business already has solar, you may still qualify for the higher discount by adding more solar capacity. The additional solar needs to be installed within 90 days before or after the battery, and the new solar capacity must be at least 25% of the new battery’s capacity.
This can make a combined commercial solar and battery upgrade worth considering, particularly for businesses with high daytime energy use.
What businesses are eligible?
Generally, the business must:
- Be located in NSW and connected to the electricity grid
- Install a battery between 20 kWh and 30 MWh
- Not be installing the battery in a residential building or data centre
- Meet the relevant installation, safety and network requirements
- Work with an installer participating in the incentive.
For batteries between 20 and 200 kWh, the battery must be on the Clean Energy Council approved battery list and installed by an installer accredited by Solar Accreditation Australia (SAA).
Larger systems have additional safety, testing and installation requirements.
Is this a rebate you claim later?
Not usually.
One of the useful aspects of the scheme is that the incentive is generally provided as an upfront discount in your installation quote. You don’t simply purchase a battery and apply for reimbursement afterwards.
Your installer works with an Accredited Certificate Provider (ACP) to arrange the incentive under the PDRS. The required nomination paperwork needs to be completed before installation begins.
Is it worth considering a commercial battery?
For many businesses, the question isn’t simply whether a battery is eligible for an incentive. It’s whether the battery makes financial sense for the business.
A properly designed system can help a business:
- Use more of its own solar energy
- Reduce electricity purchased during expensive periods
- Manage peak demand
- Provide backup power where the system is designed for it
- Reduce the upfront cost through the NSW incentive.
The right battery size will depend on your electricity consumption, solar generation, operating hours and tariff structure.
The important part: get the system designed around your business
The NSW battery incentive makes commercial storage more attractive, but the discount shouldn’t be the only reason to install a battery.
Before choosing a system, compare quotes and look at the battery capacity, usable capacity, inverter size, expected savings, warranty, installation costs and available incentive.
A good commercial battery should be sized around how your business actually uses electricity, not simply around the maximum incentive available.
If you’re considering solar and battery for your business, it’s worth getting a detailed assessment and comparing more than one quote before making a decision.
Talk to UR Local Solar about your commercial battery
We design and install commercial solar and battery systems for businesses in NSW and South Australia. If you would like to know what the NSW incentive could mean for your site, book an appointment for a detailed assessment.
