What BESS3, BESS4 and BESS5 Mean for Commercial Battery Installers in NSW

Three new Peak Demand Reduction Scheme (PDRS) activities commence on 1 September 2026, extending certificate eligibility to apartment buildings, small and medium businesses, and commercial and industrial batteries.

For installers already working in the commercial space, this is the first time these battery sizes have had a dedicated PDRS pathway.

What's New from 1 September 2026

Three activities go live under the PDRS Rule:

BESS3 - Battery Installations in Apartment Buildings BESS4 - Small and Medium Business Batteries BESS5 - Commercial and Industrial Batteries
Name of Activity Install a New Behind the Meter Battery Energy Storage System (apartments) Install a New Business Behind the Meter Battery Energy Storage System (small and medium businesses) Install a New Behind the Meter Energy Storage System (commercial and industrial businesses)
Eligibility Requirements
  1. The Site must be an Apartment Building, comprising not less than four individual dwellings.
  2. There must not be an existing Battery Energy Storage System installed at the same National Metering Identifier(s).
  1. The Site must not be a Residential Building or a Data Centre.
  2. An Implementation of either Activity Definitions BESS4 or BESS5 must not have previously been conducted at the Site.
  1. The End-User Equipment must not be installed in a Residential Building or Data Centre.
  2. An Implementation of either Activity Definitions BESS4 or BESS5 must not have previously been conducted at the Site.
Equipment Requirements
  1. The End-User Equipment must be listed on an approved product list specified by the Scheme Administrator.
  2. The End-User Equipment must have a Usable Battery Capacity greater than 20 kWh and less than or equal to 200 kWh as recorded on the approved product list specified by the Scheme Administrator.
  3. The Usable Battery Capacity of the End-User Equipment must not exceed six times the Battery Inverter Output of the End-User Equipment as recorded on the approved product list specified by the Scheme Administrator.
  4. The End-User Equipment must be internet connectable and controllable by a Demand Response Aggregator.
  5. Each item of End-User Equipment, excluding inverters installed prior to the Implementation Date, must have a warranty of at least 10 years and guarantee that at least seventy percent (70%) of Usable Battery Capacity is retained 10 years from the date the End-User Equipment is installed at the site.
  1. The End-User Equipment must be listed on an approved product list specified by the Scheme Administrator.
  2. The End-User Equipment must have a Usable Battery Capacity greater than 20 kWh and less than or equal to 200 kWh as recorded on the approved product list specified by the Scheme Administrator.
  3. The Usable Battery Capacity must not exceed six times the Battery Inverter Output of the End-User Equipment, as recorded on the approved product list specified by the Scheme Administrator.
  4. The New Solar Photovoltaic Capacity must not be less than a quarter of the Usable Battery Capacity of the End-User Equipment.
  5. The End-User Equipment must be internet connectable and controllable by a Demand Response Aggregator.
  6. Each item of End-User Equipment, excluding inverters installed prior to the Implementation Date, must have a warranty of at least 10 years and guarantee that at least seventy percent (70%) of Usable Battery Capacity is retained 10 years from the date the End-User Equipment is installed at the site.
  1. The End-User Equipment must be tested in accordance with UL9540A.
  2. The End-User Equipment must have a Usable Battery Capacity greater than 200 kWh and less than or equal to 30,000 kWh as recorded in a manner specified by the Scheme Administrator.
  3. The Usable Battery Capacity must not exceed six times the Battery Inverter Output of the End-User Equipment, as recorded in the manner specified by the Scheme Administrator.
  4. The New Solar Photovoltaic Capacity must not be less than a quarter of the Usable Battery Capacity of the End-User Equipment.
  5. The End-User Equipment must be internet connectable and controllable by a Demand Response Aggregator.
Implementation Requirements
  1. The End-User Equipment must be installed outdoors.
  2. The End-User Equipment must be installed Behind the Meter and in accordance with AS/NZS 5139.
  3. The End-User Equipment must be installed by an installer on an approved installer list specified by the Scheme Administrator.
  4. The activity must be performed by a suitably Licensed person in compliance with the relevant standards and legislation.
  5. The installation of the End-User Equipment must have received all required planning and network approvals.
  1. The End-User Equipment must be installed Behind the Meter and in accordance with AS/NZS 5139.
  2. The End-User Equipment must be installed by an installer on an approved installer list specified by the Scheme Administrator.
  3. The activity must be performed by a suitably Licensed person in compliance with the relevant standards and legislation.
  4. The installation of the End-User Equipment must have received all required planning and network approvals.
  5. Where the Battery Energy Storage System is installed indoors in a Class 3 building, a working smoke alarm that meets AS 3786 must be installed in the immediate vicinity.
  1. The End-User Equipment must be installed by a suitably Licensed person in compliance with the relevant standards and legislation.
  2. The installation of the End-User Equipment must have received all required planning and network approvals.
Minimum co-payment $1,000 per implementation $5,000 per implementation Not yet specified — pending consultation

Some detail on BESS5, including exactly how capacity above 10,000 kWh will be recorded, is still subject to consultation. We'll update this page once the Scheme Administrator confirms the final approach.

Are you eligible for Battery Incentives?

Are you eligible for battery incentives?

Tell us if you're checking residential or commercial jobs, then answer a few quick questions to see what applies and get a checklist for each result.

1. What are you checking eligibility for?
2. What types of commercial sites do you install at? (select all that apply)
3. What combined usable battery capacities do you typically install? (select all that apply)
4. For your 20–200kWh business installs, do any of these sites include data centres?
2. Is the job part of a Minister-approved government housing program? Renters, public/AHO housing, EAPA recipients, or a home in a Renewable Energy Zone.
3. Will the customer be signing up to a VPP?
Or read the full eligibility criteria as text

BESS1 — Government housing program batteries: Reintroduced for Minister-approved programs only: renters, public and Aboriginal Housing Office (AHO) housing, Energy Account Payment Assistance (EAPA) recipients, and homes in Renewable Energy Zones. Stackable with STCs.

BESS2 — VPP battery certificates: For battery installs paired with a VPP sign-up. Eligible battery size 2–50kWh, incentive capped at 28kWh. Solar PV not required. Usable capacity counted as 90% of nominal capacity. Nomination forms can be signed within 90 days of onboarding.

BESS3 — Apartment buildings (Class 2, 4+ dwellings): 20–200kWh combined usable capacity. Solar PV not required. Stackable with the Cheaper Home Batteries Program up to 100kWh. Minimum co-payment $1,000 per implementation. Installer must be SAA-listed; standard planning and network approvals apply.

BESS4 — Small and medium business batteries: 20–200kWh combined usable capacity, excluding residential buildings and data centres. Solar PV mandatory at a 1:4 ratio to battery capacity. Minimum co-payment $5,000 per implementation. CDC or DA approval required. Installer must be SAA-listed.

BESS5 — Commercial and industrial batteries: 200kWh+ combined usable capacity. Solar PV mandatory at a 1:4 ratio to battery capacity. DA approval required. Minimum co-payment is currently under consultation. Installer must be SAA-listed.

This tool gives a general guide based on published PDRS criteria and is not a formal eligibility determination. BESS1 eligibility is strictly program-gated, so confirm enrolment status and final eligibility with NCBA before quoting.

BESS3: Battery Installations in Apartment Buildings

BESS3 opens certificate eligibility to batteries installed in Class 2 apartment buildings with four or more individual dwellings. Combined usable battery capacity must sit between 20 kWh and 200 kWh, with the battery listed on the Clean Energy Council's approved list and installed outdoors in accordance with AS/NZS 5139.

A minimum co-payment of $1,000 per implementation applies. As with all PDRS activities, the installer must be on the Solar Accreditation Australia list, and the implementation needs all required planning and network approvals in place before certificates can be created. Accredited Certificate Providers (ACPs) or their representatives are required to give the customer a fact sheet with the installation quote.

BESS4: Small and Medium Business Batteries

BESS4 covers batteries installed at small and medium business premises — excluding residential buildings and data centres — with the same 20 kWh–200 kWh combined usable capacity band as BESS3. The minimum payment is higher, at $5,000 per implementation, reflecting the different customer and project profile.

Equipment must be on the CEC's approved battery list, installation must follow AS/NZS 5139, and the same accreditation, approvals and fact sheet requirements apply as under BESS3.

BESS5: Commercial and Industrial Batteries

BESS5 is built for larger-scale batteries: 200 kWh up to 30,000 kWh of combined usable capacity, though the incentive itself only applies to the first 10,000 kWh. Systems must be internet-connectable and controllable by a Demand Response Aggregator, tested to UL9540A, and installed by a suitably licensed person.

BESS5 also brings a new solar PV capacity requirement relative to the battery — a detail worth building into project scoping early, since it changes the shape of a commercial quote compared to a battery-only installation.

Planning Commercial Battery installations that will fall under BESS3, BESS4 or BESS5?

Call us on (02) 9939 5559 or register your interest below and NCBA will be in touch to help you plan eligible projects ahead of the 1 September 2026 start date

Frequently Asked Questions

  • BESS3 is a new PDRS activity commencing 1 September 2026 for batteries installed in apartment buildings (BCA Class 2) with four or more dwellings. Usable capacity must be above 20 kWh and up to 200 kWh, the battery must be internet-connectable and DRA-controllable, and a $1,000 minimum co-payment applies per implementation.

  • BESS4 covers battery installations at small and medium businesses (excluding residential buildings and data centres), with the same 20 kWh–200 kWh capacity range as BESS3, a solar PV sizing requirement, and a $5,000 minimum co-payment per implementation

  • BESS5 applies to commercial and industrial batteries between 200 kWh and 30,000 kWh usable capacity, with the incentive calculated on the first 10,000 kWh. Systems must be internet-connectable, DRA-controllable, and tested to UL9540A.

  • All three activities commence 1 September 2026 under the PDRS Rule.

  • Yes. Installers must be on the Solar Accreditation Australia list for BESS3 and BESS4, and batteries must be on the Scheme Administrator's approved product list (BESS3 and BESS4) or meet UL9540A testing (BESS5). BESS5 requires installation by a suitably licensed person.

For more information: NSW PDRS Rule and changes

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