NSW Business Battery Rebate (BESS4): A 2026 Guide for NSW Businesses

From 1 September 2026, a new NSW incentive will support battery installations at small and medium business sites for the first time. Known as BESS4, it sits under the NSW Peak Demand Reduction Scheme and is built for offices, retail premises and light-industrial sites rather than homes or apartment buildings.

Eligibility comes down to a short list of site and equipment tests. The certificate calculation is tiered in a way most quoting tools will not show you. And one rule limits every business to a single attempt, for good.

TL;DR

• From 1 September 2026, BESS4 will support battery installations at small and medium NSW business sites.
• The site must not be a Residential Building or a Data Centre, and eligible batteries run from over 20 kWh up to 200 kWh of usable capacity.
• Only one BESS4 or BESS5 implementation is ever allowed per site. Once an implementation of either activity has previously been conducted at a site, that site cannot claim again.
• The purchaser must pay at least $5,000 excluding GST per item of End-User Equipment. Unlike BESS3, BESS4 carries no equivalent low-income or exempt-program disapplication clause, so on the Rule’s plain text the minimum reads as applying to every business.
• The certificate calculation is tiered and deliberately weaker for small batteries, with full support only above 100 kWh.
• Installing within 90 days of new solar PV generates around 49% more certificates than installing outside that 90-day window.
• Unlike BESS3, BESS4 allows indoor installation, though a Class 3 building needs an AS 3786 smoke alarm nearby.
• Nothing can be claimed before 1 September 2026, but the eligibility and sizing decisions are worth working through now.

What is BESS4?

BESS4 is a new activity definition under the NSW Peak Demand Reduction Scheme (PDRS), created by the Peak Demand Reduction Scheme Amendment (No. 2) Rule 2026. It will start on 1 September 2026.

The PDRS is a certificate scheme, not a grant. Peak Reduction Certificates (PRCs) are created by a nominated Accredited Certificate Provider, and each one represents 0.1 kW of peak demand reduction capacity, averaged over an hour during the peak summer window of 2:30pm to 8:30pm (AEST) each day between 1 November and 31 March. A business is the original Capacity Holder for its own eligible installation and must nominate an Accredited Certificate Provider on or before the installation date before that provider can create any certificates. The provider typically offers a discount on the installation in return.

Five different certificates operate across Australian solar and battery incentives, and they are not interchangeable: STCs, LGCs, PRCs, ESCs and VEECs each belong to a different scheme, with a different administrator and its own price. BESS4 produces PRCs, under the NSW scheme administered by IPART.

Existing NSW battery incentives were built around homes and, more recently, apartment buildings. BESS4 is the first activity written specifically for a business site, and it sits alongside the wider incentives covered on our Commercial Solar Rebates NSW page.

Which businesses qualify for BESS4?

Site type and battery size are two of BESS4’s tests. The once-per-site bar covered further down this page is another, and BESS4 also carries equipment and payment conditions covered later in this guide. First, the site itself must not be a Residential Building and must not be a Data Centre, regardless of the battery’s size or how the business plans to use it. Second, the battery’s usable capacity must sit above 20 kWh and no higher than 200 kWh, and that usable capacity must not exceed six times the battery inverter’s output. Offices, retail premises and light-industrial sites are the intended fit, rather than homes or apartment buildings. BESS4 will start 1 September 2026.

If your premises is a home or an apartment building, BESS4 is the wrong pathway. Apartment buildings of four or more dwellings have their own activity, BESS3, covered in our guide to the NSW battery rebate for apartment buildings. Data centres sit outside both activities entirely.

Under the Rule, the End-User Equipment must also be internet connectable and controllable by a Demand Response Aggregator.

What size battery is eligible?

The battery’s usable capacity must be greater than 20 kWh and no more than 200 kWh, and that usable capacity must not exceed six times the battery inverter’s output.

Two things trip businesses up here. “Usable” is not “nominal”. Under the PDRS, usable capacity is calculated as 90% of nominal capacity for every PDRS battery incentive calculation, so a battery advertised at 55.6 kWh nominal counts as 50 kWh usable. And the six-times test is an eligibility check, not the figure used in the certificate calculation itself, which works differently and is covered next. A 90 kWh usable battery needs at least a 15 kW inverter to clear the six-times test.

Get the site type and the size band right first. Everything else on this page assumes site type and size are satisfied, plus the equipment and payment conditions covered elsewhere on this page.

How is the BESS4 incentive calculated?

No flat per-kWh rate exists in the BESS4 incentive calculation. Certificates are generated from Battery Capacity, defined by the Rule as the lesser of two numbers only: the battery’s usable capacity, or four hours multiplied by the battery inverter’s output. From Battery Capacity, the Demand Shifting Component is worked out in tiers. A constant of 0.5 applies to the first 50 kWh, a constant of 0.7 applies to the 50-100 kWh band, and the full base coefficient applies only above 100 kWh. Smaller batteries are deliberately weighted lower because they already benefit from the federal Cheaper Home Batteries Program. The NSW scheme’s tiering exists to stop a second full-strength incentive stacking on top of that at the small end. No single per-kWh number describes what a BESS4 battery earns.

That is a narrower test than BESS3 uses. BESS3’s shared-building activity caps Battery Capacity against three separate limits, including a per-dwelling cap that has no equivalent here. BESS4 businesses should not carry that third cap across; it does not apply.

Once Battery Capacity is known, the Demand Shifting Component is calculated on a tiered basis. The base coefficient is either 0.1 kW/kWh or 0.067 kW/kWh, depending on installation timing, and it is reduced further by capacity band (covered in the next section). The department explains why in its Energy Security Safeguard Rule Change 2026 position paper. Smaller batteries already do well out of the federal Cheaper Home Batteries Program, so the tiering exists to stop the NSW incentive stacking a second time on top of that at the small end.

The department’s worked example

For a 110 kWh nominal battery installed with a 30 kW solar PV system and a 22.5 kW inverter, within 90 days of the solar going in:

With Battery Capacity at 90 kWh, sitting inside the 50–100 kWh band, the Demand Shifting Component comes to 5.3 kW. That is the first 50 kWh at 0.1 kW/kWh × 0.5, plus the remaining 40 kWh at 0.1 kW/kWh × 0.7. Over the scheme’s 15-year certificate lifetime, that configuration produces 4,961 PRCs.

We have not converted that into a dollar figure. Certificate prices move, and any quoted value only means something alongside the price band used and the date it was quoted. Treat a certificate count as the honest unit here, the same way you would want a business quoting you STCs to state a number of certificates rather than a promised discount.

Why does installing with new solar generate more certificates?

Installing a BESS4 battery within 90 days of new solar PV capacity changes which base coefficient the certificate calculation uses. It lifts from 0.067 kW/kWh to 0.1 kW/kWh. Dividing 0.1 by 0.067 gives roughly 1.49, meaning the same Battery Capacity produces around 49% more certificates when paired with new solar within that 90-day window than when installed at any other time. This figure is derived directly from the two coefficients set out in the Rule, not taken from marketing material. A “+33% new-solar bonus” has circulated in industry material during 2026; it does not match either coefficient in the Rule and should be treated as incorrect. The uplift applies to the whole Demand Shifting Component, for the same Battery Capacity, purely from the choice of coefficient.

The gap between the circulating “+33%” figure and the Rule’s own uplift figure above is not a rounding difference. It is a different, incorrect number entirely, and should not be quoted alongside the coefficients set out above.

Can a business claim BESS4 more than once?

A site gets one BESS4 or BESS5 implementation, ever. BESS5 is the equivalent activity for larger commercial and industrial batteries, above the 200 kWh usable ceiling that applies to BESS4. A site may claim under one or the other, but never both and never twice. Once an implementation of either activity has previously been conducted at a site, the Rule permanently removes that site’s eligibility for both. The size of that first installation makes no difference. A business cannot install a small battery now to test the process and expect to claim again later. Nor can it move up to BESS5 once a BESS4 implementation has previously been conducted at the site. Sizing the initial system correctly against the eligibility and calculation caps is therefore a one-time decision, not a staged one. This is the highest-consequence rule in the BESS4 activity.

This matters for planning. Any suggestion that a business can “start small and claim again later” would misdescribe how the scheme actually works.

What does a business have to pay?

The purchaser must pay a net amount of at least $5,000, excluding GST, for each item of End-User Equipment installed as part of the BESS4 implementation. The provider cannot reimburse or offset it. Nor can it rely on the payment to create certificates unless it can show the payment was made and was not later refunded. Unlike BESS3, which waives its equivalent minimum-payment rule for deliveries made through a Low-income Energy Program or an Exempt Energy Program, the BESS4 clauses carry no equivalent disapplication clause. On the plain text of the Rule, the $5,000 minimum reads as applying to every business.

Any offer to discount a BESS4 battery to zero, or to refund or offset that payment in another form, does not comply with this requirement.

Can a BESS4 battery be installed indoors?

Yes. BESS4 does not carry the outdoor-only rule that applies to BESS3. A business can install its battery inside a building.

Where the installation is indoors and the building is a Class 3 building, the Rule adds a safety condition: a smoke alarm meeting AS 3786 must be installed in the immediate vicinity of the battery. Check the building classification before finalising an indoor installation plan, and factor the smoke alarm requirement into the project from the start rather than as an afterthought.

Can BESS4 be combined with the federal battery rebate?

Yes, within a limit. BESS4 can be combined with the federal Cheaper Home Batteries Program (CHBP) for batteries under 100 kWh, and that ceiling is measured on the battery’s nominal capacity, not the usable figure used throughout the rest of this page.

The unit switch matters. Every BESS4 figure above, the 20–200 kWh band, the caps, the tiering, is expressed in usable capacity, which the PDRS derives as 90% of nominal. The federal program’s own 100 kWh ceiling is set in nominal capacity, and it only creates STCs for the first 50 kWh of usable capacity within that. A battery that reads as comfortably inside BESS4’s usable-capacity band can still sit outside the federal ceiling once its nominal capacity is worked out. The two schemes need to be checked against their own respective units, not against each other’s.

The federal side is also its own moving target, covered in full in our guide to how battery rebates are changing. Its STC Factor steps down on a published schedule, reviewed at least annually, so the value of any stacked position depends on installation timing on both the state and federal side.

Is BESS4 a cash rebate paid to my business?

No. No money is paid to your business by the NSW Government. The benefit arrives as a discount on the installation, funded by certificates your Accredited Certificate Provider creates once you nominate them as Capacity Holder.

Your business is the original Capacity Holder for the site. The nomination has to happen on or before the installation date, in writing, before any certificate can be created against it. Some certificate trading activities may also be considered financial products requiring an Australian Financial Services Licence, which is a reason to leave certificate monetisation to the accredited provider rather than treating it as a return your business manages itself.

What else should NSW businesses know before 1 September 2026?

Equipment other than a pre-existing inverter needs a warranty of at least 10 years, guaranteeing that 70% of usable capacity remains after that period. The scheme uses a 15-year lifetime in its certificate calculation, which is the period the worked example above is based on.

The 0.5 and 0.7 tiering constants used in the calculation are described by the department as provisional. It has said they will be reviewed, and may change, alongside future changes to the federal Cheaper Home Batteries Program. A certificate estimate produced today is not guaranteed to hold for an installation planned well into next year.

The NSW Peak Demand Reduction Scheme is administered by IPART under rules set by the NSW Government. The BESS4 figures on this page reflect the Peak Demand Reduction Scheme Amendment (No. 2) Rule 2026 as checked in August 2026. Confirm current detail with your nominated Accredited Certificate Provider before committing to a project.

BESS4 is one of several changes to NSW battery incentives during 2026. For the full sequence, including what changed on 1 July and which incentives apply to houses and apartment buildings, see what changed for NSW battery rebates in 2026.

Thinking about a BESS4 battery for your business?

Solar Galaxy installs solar and battery systems across NSW under electrical contractor licence 333947C. We can assess your site against the exclusions above, and size a battery and inverter combination against the two BESS4 capacity caps and the other equipment and payment conditions on this page. Certificate creation itself sits with your nominated Accredited Certificate Provider, and we can help you understand what to ask them.

Call 1300 339 596 to arrange an assessment for your business, or get in touch online. You can also find out more about our commercial solar battery systems.

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