NSW Commercial Battery Rebate 2026: BESS4 and BESS5 Explained

The NSW Government Batteries for Businesses Incentive provides two indicative ranges:

• Approximately 30% to 40% off an eligible battery installed with qualifying new or additional solar
• Approximately 20% to 30% off an eligible battery installed without new solar

The final value depends on:

• Usable battery capacity
• Battery inverter output
• New solar capacity
• PRC market value
• Equipment selection
• Installation design
• Switchboard or transformer work
• Planning and network approvals
• Project administration and compliance costs

PRC values move with the market, so the discount should be calculated for the specific project and confirmed in writing.



Quality Energy can review the site, model the proposed system and prepare an indicative incentive calculation as part of the feasibility process.

Eligible NSW businesses can combine the BESS4 incentive with support from the Australian Government’s Cheaper Home Batteries Program.

The programs assess battery capacity differently:

• Federal eligibility requires nominal battery capacity between 5 kWh and 100 kWh.
• Federal STCs are calculated on usable capacity, with support limited to the first 50 kWh.
• BESS4 applies to eligible batteries with more than 20 kWh and up to 200 kWh of usable capacity.
• The BESS4 calculation uses the lower of the battery’s usable capacity and four times its inverter output.



This creates an overlap for some commercial batteries. An 80 kWh battery can qualify for both programs when its nominal capacity is no more than 100 kWh and all other product, solar, installer and site requirements are met. 

Consider an eligible NSW business installing:

• An 80 kWh battery (nominal capacity below 100 kWh)
• A 20 kW battery inverter
• Has existing solar with a total capacity no greater than 100 kW
• No previous battery incentive claim at the site



The example uses certificate market prices reported on 31 August 2026. 

For batteries installed between May and December 2026, the federal STC factor is 6.8. Support reduces across three usable capacity bands:

The installation would generate approximately 175 federal STCs, subject to the final REC Registry calculation. At an illustrative STC value of $39.85, the gross certificate value would be approximately $6,970.



The remaining 30 kWh receives no additional federal battery STCs, as federal support stops at 50 kWh capacity. The full 80 kWh can still contribute to the NSW BESS4 calculation. 

BESS4 first determines the capacity recognised by the scheme:

Recognised battery capacity = lower of 80 kWh or 4 × 20 kW

Recognised battery capacity = 80 kWh

Using the current BESS4 formula for a battery added to an established solar system:

Demand shifting component

= (50 × 0.067 × 0.5) + (30 × 0.067 × 0.7)
= 3.082 kW

Peak Reduction Certificates

= 3.082 × 6 peak hours × 15 years × 1.05 network loss factor × 10
= 2,912 PRCs after scheme rounding



At an illustrative PRC value of $3.35, the gross certificate value would be approximately $9,755. This calculation follows the worked BESS4 example in IPART’s September 2026 Method Guide. 

By combining the BESS4 incentive and Federal Battery Rebate, you could receive around $16,700 discounts when installing an 80kWh battery. These figures represent gross certificate values. Certificate prices, registration costs, compliance work and the Accredited Certificate Provider’s commercial terms affect the final amount.

BESS 4 Factsheet:

https://www.energysustainabilityschemes.nsw.gov.au/pdrs/documents/fact-sheet/sasc-bess4-fact-sheet

The NSW incentive increases when eligible new or additional solar is installed within 90 days before or after the battery. Using our 80 kWh battery example, the new solar capacity must be at least 20 kW to meet the requirement of new solar installations being at least 25% of the battery’s capacity.

Using the same battery, inverter, location and certificate price assumptions, a qualifying solar and battery installation could generate approximately:

• 4,347 NSW PRCs
• Approximately $14,560 in gross NSW certificate value
• Approximately $6,970 in federal battery STC value
• Approximately $21,500 in combined gross certificate value

The new solar system could also generate separate solar STCs. That value depends on the solar capacity, installation date and location, so it has been excluded from this example.



Quality Energy can assess your battery capacity, inverter output, existing solar, proposed solar expansion and network location before preparing an incentive assessed quote. Contact Quality Energy for a commercial battery or combined solar and battery proposal showing the project cost, available discounts and estimated energy savings.

BESS5 covers batteries with more than 200 kWh and up to 30 MWh of usable capacity. The incentive calculation applies to the first 10 MWh. 

This category is designed for sites such as:

• Manufacturing plants
• Cold storage facilities
• Food and beverage processors
• Warehouses and distribution centres
• Shopping centres
• Large agricultural operations
• Hospitals and healthcare facilities
• Commercial property portfolios
• Sites installing high capacity electric vehicle charging



Larger projects require detailed electrical and financial modelling. The battery must integrate with the site’s switchboards, transformers, protection systems, solar generation and network connection.

A business can receive the NSW incentive for a battery installed without new solar. The higher discount applies when enough qualifying new or additional solar is installed with the battery.

The solar must be installed within 90 days before or after the battery.

New solar capacity must equal at least 25% of the new battery capacity. This is a minimum solar to battery ratio of one to four.



Examples include:

The final calculation must use the capacity definitions in the PDRS Rule.

A business with existing solar must install additional qualifying solar within the 90 day period to receive the higher discount. Existing solar still affects system design because it contributes to the energy available for storage.



Quality Energy can model the existing and proposed generation together, then determine whether extra solar improves the battery incentive and financial return.

The Australian Government plans to expand the Small Scale Renewable Energy Scheme to eligible solar installations with more than 100 kW and no more than 1 MW of total onsite capacity.

The change is expected to apply to systems installed from 1 October 2026.

Eligible mid scale systems will now use a five year deeming period through to the end of the scheme in 2030. This allows qualifying commercial solar projects to create Small Scale Technology Certificates for upfront discounts on the cost of installing a commercial solar system. 

The strongest funding opportunity applies to NSW businesses installing a commercial battery with qualifying new solar.

A project may receive:

• A BESS4 or BESS5 discount on the battery
• The higher NSW battery calculation for adding enough new solar
• Federal STC support for qualifying solar above 100 kW and up to 1 MW

Consider a proposed 1 MWh BESS5 battery with 250 kW of new solar.

The 250 kW solar system would generally meet the NSW requirement for new solar capacity equal to at least 25% of the battery capacity. Subject to the final federal regulations, the solar installation would also fall within the expanded SRES capacity range.

The Australian Government estimates federal solar support of approximately $68,000 for a 250 kW system. The battery would receive a separate BESS5 discount calculated under the NSW scheme.

Quality Energy can assess both incentives within one project model, giving planning teams a clear view of capital cost, certificate assumptions, annual savings and expected payback. Complete our contact form to arrange a no obligation feasibility study.

A lower purchase price strengthens the investment case, but the battery still needs a defined operating purpose. Commercial batteries commonly create value through:

Peak Demand Reduction: The battery discharges when site demand approaches a set limit. This reduces the highest kW reading used to calculate some demand charges. The inverter must supply enough power to cover the demand spike, while the battery must hold enough energy to sustain that output for the required period.

Solar Energy Storage: Excess solar charges the battery during the day. The business then uses that energy after solar production falls. This works well for facilities with afternoon, evening or overnight loads.

Electricity Tariff Management: The battery charges when electricity costs less and discharges during expensive tariff periods. The available savings depend on the difference between charging and discharging prices, battery efficiency and degradation.

Operational Continuity: A battery designed for backup can support selected loads during a power outage. The design must define which equipment will remain operational, the power required and the expected backup duration.

Demand Response: Eligible batteries can respond to external instructions from an aggregator, supporting the grid during periods of high demand. BESS5 systems must be internet connectable and controllable by a Demand Response Aggregator.

A Quality Energy feasibility study gives your planning team the figures needed to assess a commercial battery investment. We analyse your interval data, electricity tariffs, demand profile, existing solar and site requirements to determine the recommended battery capacity, expected savings, available incentives, project cost and estimated payback period.



Complete our form below to arrange a feasibility study for your commercial battery or combined solar and battery project, or give our friendly team a call on 1800 736 374.