NSW households and small businesses can now access stacked incentives for solar batteries and Virtual Power Plant connections.
Up to $5,000 in combined incentives is now on offer to install solar batteries and connect them to a Virtual Power Plant (VPP), following an alignment of state and federal programs from 1 July 2025.
The NSW Government will increase its VPP connection incentive to up to $1,500 per system – depending on battery capacity – coinciding with the launch of the Albanese Government’s $2.3 billion Cheaper Home Batteries Program.
The Commonwealth scheme offers discounts of around 30 per cent off battery installations, with savings of roughly $10,000 for a 27 kWh system.
The state-level VPP incentive replaces the NSW battery rebate, which is now effectively absorbed by the larger federal subsidy.
Systems installed under the state’s Peak Demand Reduction Scheme since November remain eligible for the upgraded VPP incentive if not yet claimed.
A typical 11.5 kWh home battery system, priced at about $15,000 before rebates, could attract a total of $5,000 in upfront support across the two schemes.
However, higher-end systems remain a major capital investment. A 27 kWh system costing $30,000 may still require at least $20,000 in out-of-pocket spend, even after stacking both rebates.
Eligibility and safety compliance will be overseen by the Clean Energy Regulator. Only approved battery models installed by accredited providers will qualify for rebates, and not all systems are VPP-compatible. Installers will need to ensure their offerings meet VPP technical specifications, including remote dispatch capability and data monitoring standards.
Unlike standalone batteries, VPP-participating systems allow aggregation of stored energy, enabling providers to discharge power during peak grid demand. This model offers ongoing revenue opportunities for owners and shifts battery dispatch control to third parties under contractual arrangements.
The NSW Government says it will continue to consult on further measures under the Peak Demand Reduction Scheme, with future incentives possibly targeting demand-side flexibility or commercial-scale storage.
More than 11,400 batteries have been installed under NSW programs in the past six months, according to the government.