How To Get NSW’s Virtual Power Plant Incentive
Last Updated: 11th Nov 2026
NSW homes and small businesses can receive a payment for connecting their batteries to a Virtual Power Plant (VPP). It can be combined with the federal battery rebate and doesn’t affect the payments VPPs normally provide. To receive both incentives, a battery system must have between 5 and 100 kWh of nominal capacity for the federal rebate, and more than 2kWh but no more than 50 kWh of usable capacity as defined by the NSW scheme.
The VPP incentive is calculated using a maximum of 28 kWh of usable battery capacity. So, while it can be received by batteries up to 50 kWh, the incentive maxes out 28 kWh.
The amount of payment varies. At the time of writing, the total value of certificates the scheme is based on come to around $60 per kilowatt-hour (kWh) or about $1,700 for a 28 kWh battery — but households only receive around 60% of this amount. In November 2026, typical payments to households were roughly $36 per kWh, which makes for a maximum of around $1,000 for a 28kWh battery.
VPP Payment Eligibility
Details can be found on the NSW government page on the incentive, but here are the main eligibility requirements:
- The battery must have a usable capacity of more than 2 kWh, but no more than 50 kWh. To also receive the federal battery rebate it must have 5 kWh of nominal storage. of usable storage — but must have at least 5 kWh of nominal storage to also receive the federal battery rebate. But usable capacity for this payment is considered to be 90% of the batteries nominal capacity, which is different from the usable capacity figures most battery manufacturers give.
- The battery must be on CEC approved battery list. Note, some older batteries such as the Tesla Powerwall 2 are no longer on the CEC approved list and so can’t receive the VPP payment.
- The NSW VPP incentive can only be claimed once per electricity National Metering Identifier (NMI). This includes the earlier NSW VPP payment that existed before 1 July 2025. Usually, there is one NMI per property.
- The battery must have at least six years of warranty remaining. Joining a VPP must not reduce or void its warranty.
- You don’t need solar to get the NSW VPP payment, but you do need it for the federal battery rebate.
- No one can be on registered life-support.
- You have to be on-grid, as off-grid batteries can’t join VPPs.
- For households, the property must be a Class 1 building, such as a detached house or townhouse. Batteries in ordinary flats and apartment buildings are not eligible for this incentive.
- The property must be in NSW (duh).
The NSW government also provides this checklist, which will be a little confusing for some people. If your battery is new and received the federal battery rebate, it’s very likely it will also qualify for the NSW VPP incentive. However, it must meet the NSW scheme’s requirements, and you’ll need to find a participating VPP that accepts it.
If you contact the VPP provider you are interested in joining, they’ll be able to help you. It’s also possible your battery installer will offer to help you sign up to a VPP and get the incentive.
A few points to keep in mind:
Battery capacity: While the NSW VPP incentive can be received by batteries with over 2 kWh and up to 50 kWh of usable capacity, the federal battery rebate can only be used by batteries with at least 5-100kWh of nominal capacity. This means to get both, the battery capacity must be from 5 kWh nominal capacity to 50 kWh usable capacity. But the incentive is not based on the usable capacity given by battery manufacturers. Instead, for the purposes of the VPP incentive, it is defined as 90% of the nominal capacity recorded on the CEC approved battery list. (You can see the list here.) This will make it slightly less than the figure many manufacturers give for usable capacity. It’s okay for the capacity to be spread across multiple batteries, provided their total capacity is within the allowed limits.
Make sure there’s a VPP your battery can join: If you are getting a new battery and there’s a VPP you want to join, make sure they accept the battery you intend to get. If there’s no VPP in your area that accepts your battery, it won’t be possible to get the incentive.
Older batteries can become ineligible: Batteries must be on the CEC approved battery list. If a manufacturer allows their listing to expire, the battery won’t be able to receive the VPP incentive, regardless of how much warranty it has remaining. This has already happened to the Tesla Powerwall 2. You can check the CEC approved battery list to see when listings are set to expire. Companies rarely renew older model batteries because doing so costs over $6,000.
How The Scheme Works
The VPP payment is part of the NSW Peak Demand Reduction Scheme which is designed to reduce strain on the grid and reduce costs by improving how efficiently it works. Batteries joining a VPP help and so can receive a payment. But it’s not a straightforward process.
When a home battery joins a VPP, this creates Peak Reduction Certificates (PRCs), which can be traded for money. But only certain companies, called Accredited Certificate Providers (ACPs) can create them. Also, the certificates don’t go to the homeowner. The ACP gets them, trades them for money, and then passes on to the homeowner what’s left after they take a share. In practice, households get roughly 60% of what the certificates’ market value.
The number of certificates created mainly depends on the size of the battery, but can also be affected by location. You can get an estimate of the number of certificates a battery will receive using this NSW government calculator.
In November 2026, the number of certificates received in the middle of Sydney was around 22 per usable kWh. Each certificate was worth around $2.75 at that time. While that is a reasonably typical price, their value can change, and in the past it has gone as low as around $1 and as high as $3.60. You can check the current value of PRCs, as well as well as the value of other renewable energy certificates, here.
Why Do Households Get So Little Of The Incentive?
With these types of incentive schemes, there are always administration costs. However, they don’t have to be around 40% of the incentive. The federal solar rebate admin costs are only roughly 10%. It’s like the NSW VPP incentive was designed by someone who had studied Economics 101, but they were away for the “1” on the end and missed half the “0” in the middle. Hopefully, the NSW government will act to stem this waste — potentially by offering the incentive directly to households — but at this time, we’ve seen no indication they intend to take action.
Former NSW VPP Payment & Battery Incentive No Longer Available
The former NSW household battery installation discount ended on 30 June 2025 when the federal battery rebate commenced. NSW subsequently introduced separate battery installation incentives for eligible businesses and apartment buildings in September 2026. The old VPP incentive has also been replaced by the current scheme.
Next Steps – Start Now
If you are looking to get a home battery in NSW, simply request a battery quote. We’ll then match you to up to 3 trusted installers servicing your area who will provide you with a detailed obligation-free quote for a system that best suits your needs and circumstances.
If you need more information to determine if a home energy storage is right for you, check out our detailed guides to understanding, buying and owning a solar battery, and also our guide to Virtual Power Plants.