New South Wales has been running the Peak Demand Reduction Scheme (PDRS) alongside its better-known Energy Savings Scheme (ESS), and it’s surprisingly relevant for solar and battery owners. But most people have never heard of it.

The scheme is designed to reduce peak electricity demand by encouraging the installation of equipment that shifts or reduces consumption during critical peak periods. If you’re thinking about a battery, smart thermostat, or EV charger, the PDRS may offer financial incentives that improve your economics.

How it works

The PDRS creates tradeable certificates called Peak Reduction Certificates (PRCs). When you install eligible equipment that reduces your peak demand contribution, certificates are created based on the estimated peak demand reduction over the equipment’s lifetime.

These certificates are sold on a market (similar to STCs for solar) and the value flows to you as an upfront discount through your installer or supplier.

The key difference from the ESS: the PDRS specifically targets peak demand periods (roughly 2pm-8pm on hot summer days and 5pm-9pm on cold winter evenings), not overall energy consumption. Equipment that shifts load away from these peaks generates the most certificates.

What’s eligible

Home batteries are the biggest winner here. A battery that charges during off-peak/solar and discharges during peak periods directly reduces your peak demand contribution. A typical 10kWh battery installation might generate PRCs worth $800-1,500 in discount.

Smart EV chargers that can demonstrate load shifting capability are eligible. If your charger can be programmed to avoid peak periods (or respond to demand response signals), it qualifies.

Demand response-enabled air conditioners and pool pump controllers that can reduce or shift consumption during peak events also generate certificates.

Solar panels alone don’t qualify under the PDRS (they have their own incentives through STCs). But solar combined with a battery that demonstrably reduces peak demand does.

The money

PRC prices fluctuate based on market conditions, but recent prices have been around $25-40 per certificate. The number of certificates generated depends on the equipment’s capacity and its deemed peak reduction impact.

For a home battery, the PDRS discount typically adds $800-1,500 to the STC discount you already get for solar. Combined, these incentives can reduce the upfront cost of a solar-plus-battery system by $4,000-5,000.

This isn’t enough to make a marginal battery investment suddenly brilliant. But for systems that are already close to the break-even point, the PDRS tips the balance.

How to access it

You don’t apply for PDRS benefits directly. Like STCs, the certificates are typically assigned to your installer or supplier, who passes the value through as an upfront discount.

When getting quotes for batteries or smart energy equipment in NSW, ask specifically about PDRS incentives. Not all installers are registered to create PRCs, and some may not mention the scheme. A good installer in NSW should be across it.

The bigger picture

The PDRS is part of NSW’s broader approach to managing peak demand through demand-side response rather than building more supply-side infrastructure. It’s a smart approach — paying people to reduce peak demand is much cheaper than building new power plants or network infrastructure that only operates for a few hours per year.

If you’re in NSW and considering a battery or smart energy equipment, factor the PDRS into your calculations. It’s not life-changing money, but every dollar counts when you’re working out payback periods.

Other states are watching NSW’s scheme closely. Similar demand response incentive programs may emerge in Queensland and Victoria in the next few years, especially as peak demand management becomes more critical with increasing renewable penetration.