As of 30 June 2025, the NSW Government will be suspending its incentive for battery installations under the Peak Demand Reduction Scheme. But it’s not all bad news, the Federal Government is stepping in with its new battery rebate launching on 1 July 2025.
What was the NSW battery incentive?
The soon-to-be-suspended NSW rebate offered:
- Between $1,600 and $2,400 off the cost of installing a battery at homes or small businesses with existing solar
- An additional $250 to $400 rebate for connecting the battery to a Virtual Power Plant (VPP), claimable twice over six years
NSW Virtual Power Plant incentive update
From 1 July 2025, NSW residents can get a boosted incentive for connecting their battery to a Virtual Power Plant (VPP). Payments scale with battery size, with a 27 kWh battery now eligible for around $1,500 upfront. A 10 kWh battery will receive roughly $550. This can be combined with the federal Cheaper Home Batteries Program.
Eligibility
- You need a solar battery installed that can connect to a Virtual Power Plant (VPP).
- Not all batteries qualify, so check compatibility before buying.
- Batteries installed through the NSW Peak Demand Reduction Scheme are eligible.
- The incentive applies per unique electricity meter (NMI).
Why was it suspended?
NSW Energy has not publicly confirmed a reason, the suspension is suspected to be in relation to the incentives’ conflict with the federal rebate. A notice will appear on the official NSW government page when (or if) the program resumes. And, of course, we will keep you updated as information is provided.
What’s replacing it? Enter the Cheaper Home Batteries Program
From 1 July 2025, the Federal Government’s Cheaper Home Batteries Program will kick off, offering:
- Up to 30% off the cost of installing a home battery system
- Support for low-income and vulnerable households
- Expansion of the Small-scale Renewable Energy Scheme to include batteries
This $2.3 billion initiative is part of the Albanese Government’s plan to reach 82% renewables by 2030.
Can you stack NSW and federal rebates?
Not at the moment. The NSW rebate for installations is suspended, and the federal rebate won’t begin until July 2025. However, if NSW reactivates its program or launches a new one, it may be possible to stack savings, depending on eligibility.
Final word: What should households do now?
If you’re keen on battery storage:
- Take advantage of the new federal battery rebate. Check out our Cheaper Home Batteries Program page for more information
- If you already have a battery, claim the VPP rebate while it’s still on offer
- Stay alert for any NSW updates or new programs
Battery costs are expected to fall further, and the federal scheme will likely encourage better deals, especially from approved VPP providers.
