Bound in Red Tape: NSW Tries to Fix Its Battery Rebate

The NSW Government has been seeking advice on improving the Peak Demand Reduction Scheme, as it works to harmonise the state battery incentive in anticipation of a federal rebate. Here’s how the bureaucrats are working to fix a myriad of problems, and what installers want to see changed.

For homeowners, NSW’s Peak Demand Reduction Scheme (PDRS) promises point-of-sale discounts for installing batteries—a decent win for your wallet and the grid.

However, to secure the rebate dollars, many solar installers are wrangling with red tape, fine print, third-party agents and other certificate trading ticket clippers. It all means payment delays behind the scenes.

Some say the rules help weed out dodgy operators. Others reckon they’re strangling good businesses and making battery upgrades harder than they should be.

It’s got to the point where some installers simply aren’t interested in claiming the cash because the compliance costs eat up the available funds.

This is on top of concerns that the NSW scheme isn’t currently stackable with the incoming federal Cheaper Home Batteries Program rebate, even though the feds have promised it will be.

Let’s unpack some concerns and how the NSW government is responding.

‘Battery Ready’ Inverters And The 10-Year Warranty Rule

One common question is: Can I add a battery to my existing hybrid inverter under the rebate scheme?

The short answer is yes — as long as the inverter originally came with a 10-year warranty.

Why? The idea is to cut out cheaper inverters that only ever offered 5 or 7-year coverage — a rough indicator of build quality.

Now, just because a product had a long warranty on paper doesn’t mean the company itself will last. Government officials acknowledge the problem, saying they’re looking for better ways to measure real-world quality.

When even a concern as big as LG Solar can simply wind up panel production, paper promises only go so far.

Is a Long Warranty Actually Worth Anything?

The government wants value for the taxpayer dollar, proper 10-year assets, not junk.

However, without a strong history or accelerated energy performance testing, they’re relying on warranties and other documents as proxies for quality.

It’s not ideal but with home batteries being a fairly new field of technology, and they’re open to suggestions about how to write rules to mandate better-quality hardware.

The first announcement of the scheme was so stringent even market leader Tesla Power & Sungrow were ineligible, so there’s already a precedent for making adjustments.

The trick is finding a condition or warrantable specification that can both encourage better quality and be possible to write into law.

Q-cells is another example of a company to leave Australia’s solar scene.

Price might be the best indication of quality, but you can’t set a minimum price in legislation.

What Installers Really Think: A Poll from the Trenches

SolarQuotes sought advice from one of the country’s most active solar installer forums, and 69 quality-focused industry professionals gave us feedback on how the NSW rebate system is running. It wasn’t a scientific poll, but the vibe was clear.

• 44% want inspections before rebates are paid out — to stop cowboys cutting corners.
• 8% support inspections plus a demerit point system.
• 21% say manufacturers must have proper Australian warehouses and locally staffed support — not just a serviced office and random supply chain.
• 8% think official warranty failure reporting is worth trying.
• 5% like the idea of an insurance pool to cover warranties and recycling.

While installers are usually allergic to red tape, more than half of our straw poll are calling for technical inspections of some sort, saying it is the only way to protect decent operators from being undercut.

Comments from the Field

Nick (paraphased):

 

“It’s ridiculous the compliance overreach and audit process before creating certificates so retailers can get paid. It’s choking cash flow and small business.

(Installers are framing the conversation with customers like this:

You won’t have control of your investment under the VPP¹ so don’t take the rebate.

Makes it easier for the installer and customer when they don’t have to worry about it.)

“I don’t see why they can’t use a stat dec like SRES… and then audit as needed when they have resources.”

“I’ve just heard that the IPART auditors are delaying payments, waiting for manufacturers to change wording on warranty documents. The compliance overreach with the program is ridiculous. I get they’re trying to stop stinks, but it won’t.”

“The other sticking point is DNSP performance. The networks must be forced to update the DER register in a timely fashion or have these requirements removed.”

(third party compliance detail must be correct but installers have no power to make the poles and wires authority to do their bit)

 

Mike:

 

“Please tell them to cap the number of PRCs instead of the max battery size that qualifies. Crazy to give nothing for a 28 kWh or greater!”

 

Mick:

 

“The PDRS cap should change to be a cap on payment, not a cap on kWh. It would open up eligibility on so many jobs even if Labor don’t get in and this federal scheme never happens.”

 

Greig:

 

“100% the cap needs to go.”

 

Louis:

 

“They have got to speed up approvals and payments, otherwise there will be no companies left to install the batteries in the first place.”

 

Isaac:

 

“Being able to claim PDRS only once is a bit weird. So is the 28 kWh cap.”

“Compulsory inspections is not ideal.. it may bring up the standard of work but for regional NSW… such a hassle.”

“Random audits are good. They should do their best to look at a number of installs from each installation company.. especially the higher volume crews.”

“If there’s non-compliances found, then yeah delve deeper into their previous installs… So yeah sure suspensions make sense comparatively.”

 

Brent:

 

“Mandate UL9540a safety battery certification.”

Cash Flow Crunch

Multiple installers said cash flow is being strangled by audit delays and compliance overreach.

There are justifiable gripes: like rebates held up until some fine detail, like a manufacturer warranty document wording, is fixed. That leaves small businesses in limbo while OEMs flounder to update PDFs to satisfy the rules.

Others want a system like the one used for solar rebates under the Small-scale Renewable Energy Scheme (SRES). Just sign a statutory declaration, get paid, and accept that random audits may follow.

The government’s response? They know the current process needs work, and they’re looking at ways to speed up payment and streamline how audits are triggered.

Audit Quality Must Be Improved

It’s been noted that NSW Government audits have been undertaken by qualified people who aren’t experienced in solar.

This has installers ticked off because the audits have produced non-existent problems that hold up payments.

Some PDR certificate traders have worn the risk and paid installers, but others are refusing until the audit process is completed and everything is technically ticked off.

28 kWh Cutoff Is An Artificial Ceiling

The current cap for rebate eligibility is 28 kWh of battery capacity, which has many installers scratching their heads.

What about homes (or small businesses) that want more? Especially seeing as the mooted federal CHB scheme will subsidise 50kWh and doesn’t cut out until 100kWh.

Officials say the cap came from modelling used in ACT’s NextGen trial, which NSW tweaked to line up with South Australia. But the key goal of the PDRS is just that — peak demand reduction.

Both the federal incentive and the PDRS are one-time offers; there’s no second round available for expansions.

NSW says they’re focused on first-time battery installs because those offer the biggest bang for the grid. Additional or oversized batteries? Not so much.

However the industry is unanimous, this cap should be on payments, not kilowatt hours.

This 9kWh battery can’t be expanded without moving the inverter. Considering the tap, gravel surface and the air conditioner, I would move all this equipment anyway.

What About UL9540a Certification?

The government says this is “on the radar”, but they’re cautious about setting requirements that could favour one supplier over another unless there’s a clear safety case.

It’s been pointed out that the international laboratories doing this certification mightn’t get new products tested in a timely manner.

The $20,000 Question

Home Building Compensation (HBC) insurance (formerly known as home warranty insurance) is mandatory if a job goes over $20,000.

That’s led some installers to quote smaller battery sizes just to avoid the extra paperwork and expense.

The government says installers must comply with all relevant legislation. Though they don’t explicitly require proof of HBC insurance under the scheme, the climate and energy department can’t grant exemptions from legislation it doesn’t control.

Talk about unintended consequences:

Mandating a smoke detector to go with a new PDRS home battery might feed irrational fears about lithium battery fires. However the real cost comes when all the smoke detectors on the premises need updating; because they must be interlinked under the current building code.

Sigenergy have included an internal fire surpression measure.

Bottom Line: Progress, But Still Clunky

The NSW government deserves credit. They’ve taken installer feedback seriously, admitted when things aren’t working, and committed to fixing what they can.

But the scheme is still clunky. And if installers walk away because it’s too hard to get paid, the rebate won’t help anyone.

The homeowners, who are being leveraged for private investment, will miss out, and the broader public will still be left with a grid that needs more costly upgrades sooner.

If you’re a customer, talk to your installer. Ask how they handle rebates, and how long payment takes. A good one will be honest about the system’s flaws — and still get you a solid battery at a fair price.

The rebate might come with strings attached. But with the right installer, it can still be worth it.

To see what the NSW battery incentive takes off the price of a battery, use our NSW Solar Battery Rebate Calculator. For more on what the federal government rebate will do to take the cost off a battery wherever you are in the country, our Battery Calculator and Solar & Battery Calculator now factor in the federal discount.