Federal discount in NSW, 13.5 kWh batteryabout $3,458 if installed by 31 December 2026
Try your own size in the calculator →The short answer
| Support | Who pays | For NSW households in 2026? |
|---|---|---|
| Cheaper Home Batteries discount | Australian Government | Yes, off the battery price |
| NSW virtual power plant (VPP) incentive | NSW Government, through the Peak Demand Reduction Scheme | Yes, on top, when you join a VPP |
| NSW home battery installation discount | NSW Government | No, it applied before 1 July 2025 |
1. The federal discount: the big one
NSW Climate and Energy Action says it plainly: households get their battery discount from the Australian Government's Cheaper Home Batteries Program. Batteries installed by 31 December 2026 earn 6.8 certificates per usable kWh on the first 14 kWh, which is about $3,458 for a 13.5 kWh battery at $38 a certificate. The factor drops to 5.7 on 1 January 2027 (what that costs you).
Work out your own figure in the rebate calculator.
2. The NSW VPP incentive: the extra
A virtual power plant links many home batteries so they can supply the grid at peak times. NSW pays an upfront incentive when you connect your battery to one, on top of what the VPP provider offers you. According to NSW Climate and Energy Action (page updated 31 August 2026, read 29 October 2026):
- It is available now, with no closing date announced.
- Batteries from 2 kWh up to 50 kWh are eligible since 1 July 2026.
- The amount depends on the capacity you make available to the grid, up to 28 kWh, and on the provider and contract you choose. The NSW page does not publish a fixed dollar figure, so compare offers.
- It can be claimed once per electricity meter (NMI), as an upfront payment, in instalments or as a bill credit.
- You need a VPP provider that offers the NSW incentive, and an electricity retailer that works with VPPs. You may have to change retailer.
Can you combine them?
Yes. NSW states that the VPP incentive can be combined with government battery discounts if you meet the eligibility for each, and that all batteries installed under the Cheaper Home Batteries Program up to 50 kWh may be eligible for the VPP incentive. Note that joining a VPP is also part of the federal rules: the battery must be able to join one to earn certificates (Clean Energy Regulator).
What happened to the NSW battery discount?
The NSW home battery installation discount applied before 1 July 2025, when the larger federal program started. Today the NSW installation discount (activity BESS1 under the Peak Demand Reduction Scheme) is only available through approved programs, such as an Exempt Energy Program, or on sites owned or managed by the NSW Government or a local council, according to the IPART BESS1 fact sheet (version 2.1, August 2026). Businesses have a separate NSW battery discount from 1 September 2026.
If an offer mentions a "NSW battery rebate" for a normal home, ask exactly which scheme it is. IPART also notes that salespeople cannot knock on your door uninvited under the Peak Demand Reduction Scheme.
Before you choose a VPP
- Compare the upfront incentive and the ongoing payments: the IPART VPP fact sheet lists sign-up credits, bill credits, feed-in tariffs and payments for using your battery.
- Read how much of your battery the VPP can use, and when.
- You can only receive the incentive once, so choose carefully.