Updated Home Battery & VPP Rebates in NSW: BESS1 & BESS2
- Aug 11
- 2 min read
Updated: Aug 17
The NSW Government has updated both BESS1 and BESS2 under the Peak Demand Reduction Scheme (PDRS). BESS1 now supports stacking with the Cheaper Home Batteries Program (CHBP) for eligible government projects, while BESS2 increases the eligible battery size and removes the solar PV requirement.
Whether you're working on a VPP or an eligible government project, here's what you need to know about the latest BESS1 and BESS2 updates.
Key Takeaways
Who It's For: Residential battery installers working on home battery, VPP, and eligible government projects.
Commencement Date: Updated from 1 July 2026.
What's New: BESS1 now supports CHBP stacking for eligible government building projects, while BESS2 allows battery-only systems to qualify for VPP incentives.
Which Battery Rebate Applies to You?
While BESS1 is now limited to eligible government facilities and social housing programs, residential customers are encouraged to participate in BESS2 by connecting their existing home batteries to an eligible Virtual Power Plant (VPP).
NSW program | Who is this for | What does it cover |
BESS 1 | Government buildings and Social housing | Installing a new battery |
BESS 2 | Existing home battery owners | Connecting an eligible battery to a VPP |
BESS1: Government and community housing projects: Battery Installation Incentive
What's New in 2026?
Eligible projects can now stack incentives with the CHBP.
Battery registration with AEMO is no longer required.
Usable battery capacity is now calculated as 90% of nominal capacity.
Who Is Eligible
NSW State or Local Government buildings.
Properties covered by a Minister-approved Exempt Energy Program.
No longer available for standard residential and small business battery installations.
How Much Can You Save
BESS1 helps reduce the upfront cost of installing a home battery. The amount you save isn't fixed and depends on your battery system, installation costs and the accredited provider you choose.
Here are potential incentive examples:
16.6 kWh Battery
Before incentives | $10,500 |
STC incentive | -$3,432 |
PRC incentive | -$4,638 |
Estimated final cost | $2,430 |
28 kWh Battery
Before incentives | $16,000 |
STC incentive | -$4,953 |
PRC incentive | -$7,822 |
Estimated final cost | $3,225 |
BESS2: Join a Virtual Power Plant (VPP) for Home Battery Owners
What's New in 2026?
Eligible battery size increases to 50kWh, with incentives capped at the first 28kWh.
Solar PV is no longer required.
Usable battery capacity is now calculated as 90% of nominal capacity.
Who Is Eligible
Households and small businesses with a compatible battery.
Have an eligible battery between 2 kWh and 50 kWh. (Batteries installed under the Australian Government's Cheaper Home Batteries Program are also eligible.)
Join a participating Virtual Power Plant (VPP) provider offering the NSW incentive.
Use a compatible electricity retailer, as some retailers do not support VPPs.
How Much Can You Save
The amount you receive depends on your battery, the VPP provider and the contract you choose. Different providers may offer upfront incentives, electricity bill credits or ongoing payments while your battery participates in the VPP.
Here are potential incentive examples:
20 kWh Battery
Eligible incentive size | 20 kWh |
Estimated PRC incentive | $1,540 |
42 kWh Battery
Eligible incentive size | 28 kWh |
Estimated PRC incentive | $2,156 |
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