The New South Wales Government is moving to make battery storage more affordable for businesses. In a bid to accelerate the state’s transition to renewable energy, it is offering discounts of up to 40% on the cost of installing battery systems.

The new incentive will begin on September 1 and will be available to eligible commercial and industrial customers that install batteries through accredited suppliers. The program will cover systems ranging from 20kWh to 30,000kWh.

The size of the discount will depend on the battery installation, with businesses that install both new solar and battery capacity having the potential to receive the largest savings.

According to NSW government estimates, a small business such as a grocery store could receive a discount of around $37,000, while a medium-sized operation such as a dairy farm could save about $355,000 on installation costs.

Businesses installing a battery alongside new or additional solar can expect discounts of around 30–40%. Battery-only installations can receive discounts of around 20–30%.

The incentive will also be available to apartment owner corporations installing shared battery systems.

Combining Solar and Battery 

The news comes shortly after the federal government introduced a 20% discount for businesses that install rooftop solar, creating an opportunity for eligible businesses to combine support for solar generation and battery storage.

The NSW government says the measures are designed to help businesses reduce their electricity costs while also increasing the amount of energy storage available to the electricity system.

NSW Minister for Climate Change and Energy Penny Sharpe said the state wanted to see more batteries installed to help businesses and households cut power bills.

Batteries Key In Renewable Transition

Battery storage is becoming more important as NSW adds more solar and wind generation to its electricity system.

Batteries have the capacity to store electricity when renewable generation is high, and release it when the demand increases. This helps to reduce price volatility and provide additional capacity during periods of peak demand.

The NSW government is also expanding incentives for Virtual Power Plants (VPPs). These connect individual household and small-business batteries through software so they can be coordinated as one larger source of electricity for the grid.

Eligible households and small businesses could receive up to $1,000 for connecting their batteries to a VPP with NSW setting a target of 3,400MW of VPP capacity by 2035.

Challenges for Large-Scale Renewable Projects

The push for more battery storage comes as developers face a tougher investment environment for large renewable energy projects.

More than 10GW of renewable generation and storage projects across NSW are reportedly caught in an investment squeeze, with higher construction costs and lower wholesale electricity prices affecting potential returns for developers.

The state’s Electricity Infrastructure Roadmap is targeting at least 12GW of new renewable generation and 2GW of long-duration storage by 2030, making investment in new generation and storage infrastructure critical as ageing coal-fired power stations retire.

The latest battery incentives are aimed at helping businesses reduce their energy costs while also building a larger network of energy storage that can support NSW’s electricity grid during the renewable energy transition.