NSW residents now have two additional incentives to invest in solar battery storage.
 On 1 November 2024, as part of its Peak Demand Reduction Scheme (PDRS), the NSW government introduced two compelling financial incentives to install battery storage with a solar power system.
Incentive 1: Save upfront on battery installation cost
 You can receive a substantial discount when installing a battery energy storage system (BESS) in your home or small business with an existing or new solar system.
The battery you buy must meet the following criteria:Â
- be approved by the Clean Energy Council
- have a capacity of between 2kWh and 28kWh
- be capable of connecting to a virtual power plant (VPP)
- meet specific warranty conditions
This incentive only applies to new battery purchases. There must be no existing battery already installed on the property.
If you haven’t yet installed solar in your home, you’re most likely eligible for the Federal government solar rebate as well as the NSW battery incentive. The government also provides subsidies to lenders, enabling them to offer green loans at lower interest rates for energy-efficient upgrades to residential homes – including solar and battery storage.
Incentive 2: Access rebates when joining a virtual power plant (VPP) network
You have the option to connect your battery system to a virtual power plant (VPP). This will allow you to sell excess energy to an accredited certificate provider when demand on the grid is high. This works in a similar way to feed-in tariff schemes, which pay for excess solar energy sold back to the grid.
When you install a Battery Energy Storage System (BESS), you’ll be able to create peak reduction certificates (PRCs). You can use these certificates to trade your stored energy with accredited certificate providers. The PDRS rebate scheme has two ways to create PRCs:
BESS 1 covers the installation of the system itself.
BESS 2 covers contracting with a VPP service.
If, however, your home already has a battery system installed, you can still join a VPP and benefit from the rebate.
The NSW government estimates that these incentives could help households and small businesses save around $1.2 billion on their energy bills between 2022 and 2040.Â
The benefits of adding a battery to your solar PV system
The obvious benefit is you’ll save money on electricity. A typical 12.8kWh battery system can potentially cut your quarterly electricity bill by around $400.
 If the capacity of your solar and battery system more than covers your household’s energy needs, it’s entirely possible you can achieve a $0 energy bill.
 But there are other reasons to consider installing a battery:
1. Minimise the impact of reduced feed-in tariffs and the newly introduced solar tax
Energy prices in Australia have risen substantially in the last few years. When they were higher, Solar Feed-In Tariff schemes (where customers are paid for feeding excess solar energy back to the grid) dramatically offset electricity bills.
 However, as of 1 July 2024, the feed-in tariff for exported solar energy in NSW was reduced from between 7.7c/kWh to 9.4c/kWh to just 4.9 to 6.3c/kWh. This means solar homeowners earn less for exporting their surplus solar energy to the grid.
 Also, the new solar tax implemented by Ausgrid & Endeavour Energy will further reduce the financial benefits of solar alone. Instead of being paid for feeding excess solar energy back to the grid throughout the day, you will now be charged a fee for doing so during peak times (typically between 10am and 3pm).
 It’s frustrating and short-sighted to have a government incentive (a ‘carrot’) in place which encourages people to install solar, but then allow energy wholesalers to take the ‘stick’ approach by penalising homeowners for investing in solar!Â
 Ausgrid states that the tax aims to reduce congestion in the electricity network during peak hours. The revenue generated will be used to improve their infrastructure to cope with the influx of electricity into the network.Â
 By installing a battery system you can maximise your self-consumption while minimising the impact of solar tax. Once your battery is full, any leftover energy can be sent to the grid after 4 pm without being penalised.
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Become more energy independent
Battery storage allows households to store energy for use during times when the sun isn’t shining (eg. at night) or during a power outage. That means you don’t have to revert to grid-generated power when solar power isn’t available. The backup reserves in your battery will keep you going during a blackout.
 The financial incentives offered by the NSW government make buying a subsidised battery system more attractive so that you can start enjoying the benefits of energy independence. Plus, the cashback from participating in a VPP program will help you reach bill neutrality much sooner.
 Best of all, you can achieve a payback of around 7 years with a high-performance battery by taking advantage of the battery and VPP rebates.
