New NSW Battery Incentive for Businesses: BESS4 and BESS5 Explained

If you run a business in NSW and pay for power during the afternoon and evening peak, there's a new incentive worth knowing about. From 1 September 2026, two new activities under the NSW Government's Peak Demand Reduction Scheme (PDRS) — known as BESS4 and BESS5 — will support eligible behind-the-meter battery installations at business sites, from small operations right up to large commercial and industrial (C&I) sites.

What is the Peak Demand Reduction Scheme?

The PDRS is a NSW Government scheme that creates a financial incentive for installing equipment that reduces demand on the electricity grid during peak periods — batteries being one of the most effective. Installers generate certificates for eligible equipment, which can be turned into an up-front discount on the cost of the system. BESS4 and BESS5 are new battery-specific activities being added to the scheme.

BESS4 — small and medium businesses

BESS4 is aimed at smaller non-residential sites:

• Usable battery capacity over 20 kWh, up to 200 kWh
• For eligible non-residential sites
• A minimum customer contribution of $5,000 (ex GST) applies

BESS5 — commercial and industrial sites

BESS5 is aimed at larger sites with bigger energy needs:

• Usable battery capacity over 200 kWh, up to 30 MWh
• Incentives apply to the first 10 MWh of usable capacity
• For eligible larger commercial and industrial sites

Does adding solar increase the incentive?

It can. A higher incentive calculation may apply when a battery is installed within 90 days of qualifying new solar at the same site. A lower calculation may still apply to eligible battery-only installations. Exactly what a specific site is entitled to depends on the system configuration, the site itself, and the PDRS requirements that apply at the time of installation — so it's worth getting a site-specific assessment rather than relying on a general figure.

Who is this for?

Because BESS4 and BESS5 cover such a wide capacity range, the scheme is relevant to a broad mix of NSW businesses:

• Retail, hospitality and office sites looking to cut peak demand charges
• Manufacturing and warehouse sites with higher, steadier loads
• Any commercial or industrial site with a business case for reducing peak-period grid draw

The businesses that benefit most from a new incentive round are the ones who get their site assessed before it opens — not after.

— Solar Plus Electrical

How to prepare before 1 September 2026

With BESS4 and BESS5 opening in a few weeks, now is the time to get your site looked at — not once the round is already underway. We're SAA-accredited electricians working across NSW, and can assess your business's energy use, model whether BESS4 or BESS5 applies to your site, and prepare your system design ahead of the opening date. Reach out for a free, no-obligation eligibility check.