New Commercial Battery Rebates in NSW Explained: BESS3, BESS4 & BESS5

From 1 September 2026, the NSW Government is expanding the Peak Demand Reduction Scheme (PDRS) with three new battery incentive activities: BESS3, BESS4 and BESS5. These new activities extend financial incentives to apartment buildings, small and medium businesses, and commercial and industrial facilities installing battery energy storage systems.

This article compares BESS3, BESS4 and BESS5 to help commercial battery installers identify the right incentive for your project.

Key Takeaways

• Who It's For: Commercial battery installers working on apartment, SME and C&I battery projects in NSW.

• Commencement Date: New BESS activities commence from 1 September 2026.

• What's New in PDRS: BESS3, BESS4 and BESS5 are three new battery activities under the NSW Peak Demand Reduction Scheme (PDRS).

• Choosing Between BESS3, BESS4 & BESS5: The applicable incentive depends on the building type and battery size, so choosing the correct BESS activity is essential.

Which Battery Rebate Applies to You?

BESS3, BESS4 and BESS5 are designed for different types of commercial battery installations. Each incentive targets a specific customer group based on the building type and battery size.

NSW program	Who is this for	Eligible battery size
BESS3	Apartment buildings	20kWh to 200kWh
BESS4	Small & medium businesses	20kWh to 200kWh
BESS5	Commercial & industrial businesses	200kWh to 3MWh

BESS3: Apartment Building Battery Installations

New 2026 Activity

• Designed for apartment buildings with at least 4 dwellings.

• Incentives can be stacked with CHBP up to 100kWh.

• Higher incentives with new solar PV.

• Certificates are capped at 5kWh per dwelling and 4 hours × battery inverter capacity.

  
  

Who Is Eligible

• Eligible apartment buildings with four or more dwellings.

• New shared battery installations only (existing battery systems are not eligible).

• Battery systems with a usable capacity between 20 kWh and 200 kWh, with a maximum battery duration of 6 hours.

• Installations completed on or after 1 September 2026.

How Much Can You Save

The BESS3 incentive is calculated based on the eligible usable battery capacity, so larger battery systems generally receive higher incentives. Projects that include a new solar PV system may also receive a higher incentive. Incentives are capped at 5 kWh of eligible battery capacity per dwelling, with usable battery capacity calculated as 90% of the battery's nominal capacity.

Here are potential incentive examples:

System size: 25 kW Solar + 50 kWh Battery

• $19,775 PRC incentive

• +$11,076 STC incentive

• $30,851total approx. Incentive

BESS4 : Small & Medium Business Battery Installations

New 2026 Activity

• Designed for small/medium businesses.

• Incentives can be stacked with CHBP for system up to 100kWh.

• Usable battery capacity between 20kWh and 200 kWh, with a maximum battery duration of 6 hours.

• Higher incentives with new solar PV.

• Certificates are capped at 4 hours × battery inverter capacity.

Who Is Eligible

• Small and medium business sites (excluding residential buildings and data centres). 

• First-time BESS4 or BESS5 applications only. 

• Projects installed on or after 1 September 2026.

How Much Can You Save

The BESS4 incentive is calculated based on the eligible usable battery capacity, which is measured as 90% of the battery's nominal capacity. The final incentive is also subject to a cap of 4 hours × battery inverter capacity.

Here are potential incentive examples:

System size: 100 kW Solar + 200 kWh Battery

• $65,800 PRC incentive

• +$21,528 STC incentive

• $87,328 total approx. Incentive

BESS5 : Commercial & Industrial Battery Installations

New 2026 Activity

• Designed for commercial and industrial projects.

• Usable battery capacity between 200kWh and 30MWh, with a maximum battery duration of 6 hours.

• Higher incentives with new solar PV.

• Certificates are capped at 10MWh and 4 hours × battery inverter capacity.

Who Is Eligible

• Commercial and industrial sites (excluding residential buildings and data centres). 

• Sites that have not previously received a BESS4 or BESS5 incentive. 

• Installations completed on or after 1 September 2026.

How Much Can You Save

The BESS5 incentive is calculated based on the eligible usable battery capacity, with larger battery systems generally receiving higher incentives. Eligible battery capacity is calculated as 90% of the battery's nominal capacity, while the final incentive is capped at 10 MWh and 4 hours × battery inverter capacity.

Here are potential incentive examples:

System size: 2.5 MW Solar + 5 MWh Battery

• $1,646,000 PRC incentive

• $1,646,000 total approx. Incentive

Read More

1.Updated Home Battery & VPP Rebates in NSW: BESS1 & BESS2

2.NSW Battery Rebates: Your Guide to BESS1–BESS5

3.NSW PDRS Calculator