“We want more batteries:” NSW confirms state rebate will slash costs by up to 40 pct on systems up to 30 MWh

New South Wales has confirmed the reboot of its Peak Demand Reduction Scheme, a rebate that will cut the upfront cost of battery systems as big as 30 megawatt-hours by up to 40 per cent for businesses and apartment buildings in the state.

The NSW Labor government formally announced the new-look PDRS on Tuesday, more than a month after Renew Economy reported that it had been quietly signed off by energy minister Penny Sharpe in late June and published on the NSW Climate and Energy Action website.

As reported last month, the changes essentially reactivate the PDRS battery installation discount that was snoozed last year following the launch of federal Labor’s Cheaper Home Batteries (CHB) scheme.

The decision to snooze the scheme was driven by the desire to avoid people “double dipping” into both rebates. Instead, the PDRS offered a further discount to households that signed their battery up to a virtual power plant (VPP).

The existing VPP incentive, however, has now been expanded to include batteries up to 50 kWh, so small businesses and homes that join could be eligible for an incentive of up to $1,000.

For businesses ranging from small shops and restaurants up to industrial concerne – no residential buildings or data centres allowed – rebates apply to batteries sized between 20 kilowatt-hours (kWh) to 30 megawatt-hours (MWh), with bigger rebates on offer if solar is installed at the same time.

Sharpe’s office says the size of the discount is related to the size of the battery. For example, a small-sized business such as a grocery store could receive a discount of around $37,000, while a medium-sized business such as a dairy farm could receive a discount of around $355,000.

For apartments, the discount will be available for buildings with four or more units installing a battery between 20 kWh and 200 kWh. Eligible apartment complexes can expect discounts of between 20-30 per cent for a battery only, or 30 to 40 per cent when installed with new or additional solar.

There are many important details on the eligibility of applicants and the batteries they are allowed install – and a range of rules and requirements of the installers allowed to install them.

But the bottom line is that this is huge news for businesses in NSW, particularly in the wake of the federal Labor’s decision to extend the Small-scale Renewable Energy Scheme (SRES) to rooftop solar projects ranging from 100 kilowatts (kW) up to 1 megawatt (MW).

As Smart Commercial Energy CEO Huon Hoogesteger told Renew Economy last month, the early calculations show the PDRS changes could significantly reduce the pay-back period for businesses that have been wanting to install solar batteries but have held off due to cost.

“Break-evens for batteries are naturally sitting around seven years at the moment, but [with the PDRS] that will drop down to under four years, which is significant.

“[What it also] means is much larger battery size systems… will come into the market, which are easier to manage for the VPP operators and the electricity retailers,” Hoogesteger said.

“Another great thing about this program is that it’s going to encourage additional solar installation,” Hoogesteger adds, noting that the C&I sector in Australia remains vastly underserved, compared to the opportunity that is available.

“[And due to the settings], you know the biggest rebates will be gained by not just adding a battery, but by adding solar as well.”

It’s also a big leap forward for NSW, which like its southern neighbour, Victoria, is running well behind the pace on the large-scale renewable energy and storage capacity it needs to install in time to replace outgoing coal and meet emissions targets.

Sharpe says home battery uptake in the state is currently sitting at around 10,000 new systems being installed every month.

“NSW wants more batteries, and these changes will help more people cut their power bills, whether they are running a business or living in an apartment,” the minister said on Tuesday.

“The Minns Labor Government will help businesses unlock major savings through renewable energy, reducing their long-term operating costs, improving competitiveness and supporting jobs across NSW.”

If you would like to join more than 29,000 others and get the latest clean energy news delivered straight to your inbox, for free, you can click here to subscribe to our free daily newsletter.

If you wish to support independent media, and accurate information, please consider making a one off donation or becoming a regular supporter of Renew Economy. Please click here. Your support is invaluable.