BESS3, BESS4 and BESS5

Frequently Asked Question 

 How will BESS3 work at apartment buildings? 

Class 2 residential buildings with at least 4 dwellings, including common walk-up apartment blocks, are eligible for BESS3 incentives.
Townhouses and villas are not Class 2 residential buildings. There cannot be an existing battery energy storage system installed at the same NMI. The ACP will need evidence that batteries are installed outdoors and in accordance with AS/NZS 5139. Implementations must also have received all required planning and network approvals and meet all other PDRS Rule requirements. 

 What does "outdoors" mean for BESS3 apartment battery installations? 

The intent is that batteries are not located inside any building. The requirement is based on fire safety considerations developed with stakeholders including Fire and Rescue NSW. Batteries should be installed in open outdoor areas. 

Do independent garages or carport areas qualify as outdoor locations under the new BESS3 activity? 

It would have to be outside of the apartment building. Independent garages or carport areas may not qualify and will need to meet all appropriate eligibility criteria. 

 Is solar PV mandatory for BESS3, BESS4 and BESS5? 

No. However, higher incentives may be available where new solar PV is installed within 90 days of the battery installation.
Participants must meet all applicable rule requirements. 

 Can BESS4 or BESS5 be undertaken where there is already an existing battery on site? 

The PDRS Rule does not prohibit an existing battery at the NMI for activities BESS4 or BESS5. However, a previous implementation of either BESS4 or BESS5 must not have been conducted at the site.  

 Are large batteries eligible for new incentives? 

Yes, provided all PDRS Rule requirements are met. The following battery capacities apply for the new activities:

• • • • BESS3: greater than 20 kWh and less than or equal to 200 kWh (for apartment buildings)

      • BESS4: greater than 20 kWh and less than or equal to 200 kWh (not in residential buildings or data centres)

      • BESS5: greater than 200 kWh and less than or equal to 30 MWh (not in residential buildings or data centres). 

If a battery has a nominated capacity of 205 kWh and a usable battery capacity of 195 kWh, should it be considered under BESS4 or BESS5? 

A battery with a usable battery capacity of 195 kWh (as defined in the PDRS Rule) would be eligible under BESS4 because the usable battery capacity is less than or equal to 200 kWh. For BESS5, the usable battery capacity must be above 200 kWh. 

 Is BESS4 stackable with the Cheaper Home Batteries Program (CHBP)? 

Yes, provided all eligibility requirements of both programs are met. Batteries installed under the CHBP must have a nominal capacity of 5–100 kWh.   

 Can projects be pre-approved before a BESS4 or BESS5 installation proceeds? 

No. There is no ‘pre-approval’ for certificate creation in the PDRS. Certificates may only be created when all the scheme requirements have been met. ACPs must hold this evidence at the time of certificate creation (or when entering a pre-registration audit). 

 How is the incentive value for BESS5 determined? 

The number of PRCs that can be created from a BESS5 implementation is calculated using equations in the PDRS Rule. There is no fixed value for PRCs. PRC values are determined by the market. 

 How is a commercial and industrial site defined under BESS5? 

The PDRS Rule does not define commercial and industrial site. To be eligible for PRC creation the site must not be a residential building or a data centre and all other BESS5 requirements must be met. 

 Does BESS5 require a customer payment? 

No, there is no minimum payment requirement for BESS5. 

 Will UL9540A be mandatory for all levels of a battery system under BESS5? 

The PDRS Rule requires that all batteries installed under BESS5 must be tested in accordance with UL9540A. 

Common questions and answers published 7 August 2026