PDRS Rule and changes
This page has information about the Peak Demand Reduction Scheme Rule (PDRS Rule). The PDRS Rule applies to Accredited Certificate Providers (ACPs) and their activities to reduce peak demand. It provides details about:
- nomination as the Capacity Holder
- recognised peak activities (RPAs)
- product acceptance requirements
- calculation methods for determining peak reduction capacity
- eligibility, equipment and implementation requirements
- conversion of peak reduction capacity to Peak Reduction Certificates (PRCs).
ACPs must understand and comply with the PDRS Rule.
The NSW Department of Climate Change, Energy, the Environment and Water develops the policy behind the PDRS. It also updates the PDRS Rule annually or at other times as required. To find out more about how the PDRS Rule is updated and how to get involved, visit the NSW Climate and Energy Action website.
PDRS Rule change commenced 1 July 2026
The latest PDRS Rule applies to all existing activities with an implementation date on or after 1 July 2026. Three new battery activities commence on 1 September 2026.
The 1 July 2026 Rule change information below is organised by method. Some changes apply across all PDRS methods. Each section explains what has changed and what you need to do.
Details of the specific changes to clauses in the Rule are in the PDRS Reference Table.
PDRS-wide changes
What has changed
Disposal and recycling evidence for the disposal of refrigerants has been clarified.
What you need to do
Be sure you comply with requirements.
Reducing Demand Using Efficiency (RDUE)
What has changed
From 1 July 2026:
- multi-split systems are now eligible, with a cap of 500 certificates per HVAC1 implementation using one or more multi-split systems
- product class types from the GEMS Determination have been adopted and specified in the Equipment Requirements and low-efficiency systems have been removed
- Equipment Requirements relating to make and model have been introduced for all product types
- an implementation requirement for end-user equipment to be designed and installed in accordance with AS/NZS 5141:2018 has been introduced
- definitions and factors used in calculations have been updated.
What you need to do
- carefully review the updated Activity Definition HVAC1 in the PDRS Rule to understand the changes
- update your internal systems and processes to correctly calculate certificates and only submit capacity that would create certificates up to the multi-split cap
- review and make sure you comply with the AS/NZS 5141:2018 standard
- make sure only eligible products are offered to consumers.
What has changed
From 1 July 2026:
- new or replacement air conditioners must have a cooling capacity greater than 30 kW
- new implementations are limited to large business sites unless replacing an existing air conditioner in a residential building or small business site where it is in a centralised system or in the common areas of a Class 2 building
- eligible product classes have been specified (Equipment Requirement 1)
- Equipment Requirements relating to make and model have been introduced for all product types (Equipment Requirements 3 and 4)
- definitions and factors used in calculations have been updated.
What you need to do
- carefully review the updated Activity Definition HVAC2 to understand the changes
- make sure you understand the Large Business Site definition
- update your internal systems and processes to correctly calculate certificates
- make sure only eligible products are offered to consumers.
What has changed
From 1 July 2026:
- Activity Definition WH1 is no longer an activity (suspended since 19 December 2024)
- references to WH1 throughout the Rule have been removed.
What you need to do
- Nothing. We will remove WH1 from your RDUE accreditation when you next apply for an amendment. If your RDUE Accreditation Notice contains only WH1 we will contact you about your accreditation.
Store and Shift Capacity (SASC)
What has changed
From 1 July 2026:
- name of activity changes to include single dwelling residential and small business
- implementations can be delivered at a government owned and managed site or through an approved exempt energy program (EEP)
- both BESS1 and Commonwealth Cheaper Home Batteries Program incentives can be claimed for eligible implementations
- minimum payments do not apply when delivered under an EEP or low-income energy program
- additional information about existing, new and total solar photovoltaic capacity and inverter capacity must be provided when registering certificates
- inverter warranty requirements and DER Register requirements have been removed
- Usable Battery Capacity definition has been updated and is now 90% of Nominal Battery Capacity.
What you need to do
- update documents that reference the full activity name
- understand changes to eligibility and make sure you comply
- understand changes relating to Exempt Energy Programs and minimum payments (refer to the Exempt Energy Programs and Upgrade costs pages for more information)
- use the Usable Battery Capacity definition to determine the capacity of the battery to meet Equipment Requirement 2 and to calculate the Demand Shifting Components in Equation BESS1.2
- review the CSV specification guide and PDRS Example Template and update systems and processes to capture information about solar photovoltaic capacity and inverter capacity for certificate registration
- start using the new BESS1 factsheet
- update your internal systems and processes to correctly calculate peak demand capacity.
Commences 1 September 2026.
Some key requirements for BESS3 include that batteries:
- are installed in an apartment building (BCA Class 2) with at least 4 individual dwellings
- have a combined usable battery capacity greater than 20 kWh and less than or equal to 200 kWh
- meet specified capacity requirements relative to inverter output and warranty and connection requirements set out in the PDRS Rule
- are listed on the Clean Energy Council battery list
- are installed by an installer on the Solar Accreditation Australia installer list
- are installed outdoors and in accordance with AS/NZS 5139
- a minimum payment of $1000 per implementation is required
- Implementations must also have received all required planning and network approvals.
ACPs or their representatives must give a fact sheet to the customer with the quotation for installation of a battery.
See the PDRS Rule and PDRS Method Guide for more details of BESS3 requirements.
What you need to do
If you’re interested in becoming accredited for BESS3:
- understand the requirements for this activity
- start preparing your application (see our Preparing your application page for more information)
- start preparing your systems and processes.
Commences 1 September 2026.
Some key requirements for BESS4 include that batteries:
- are not installed in a Residential Building or Data Centre
- have a combined usable battery capacity that is greater than 20 kWh and less than or equal to 200 kWh
- meet specified capacity requirements relative to inverter output and warranty and connection requirements set out in the PDRS Rule
- are listed on the CEC’s approved battery list
- are installed by an installer on the Solar Accreditation Australia installer list
- are installed in accordance with AS/NZS 5139.
- Implementations must also have received all required planning and network approvals.
- A minimum payment of $5000 per implementation is required.
ACPs or their representatives must give a fact sheet to the customer with the quotation for installation of a battery.
See the PDRS Rule and PDRS Method Guide for more details of BESS4 requirements.
What you need to do
If you’re interested in becoming accredited for BESS4:
- understand the requirements for this activity
- start preparing your application (see our Preparing your application page for more information)
- start preparing your systems and processes.
Commences 1 September 2026.
Some key requirements for BESS5 include that batteries:
- are not installed in a Residential Building or Data Centre
- have a combined usable battery capacity that is greater than 200 kWh and less than or equal to 30,000 kWh recorded in a manner specified by the Scheme Administrator. (We are consulting on this and will confirm the approach once the consultation process is complete)
- incentives only apply to the first 10,000 kWh of capacity
- meets specified capacity requirements relative to inverter output and new solar photovoltaic capacity
- be internet connectable and controllable by a Demand Response Aggregator be tested in accordance with UL9540A
- meet connection requirements set out in the PDRS Rule
- are installed by a suitably licensed person in compliance with the relevant standards and legislation.
- Implementations must also have received all required planning and network approvals.
See the PDRS Rule and PDRS Method Guide for more details of BESS5 requirements.
What you need to do
If you’re interested in becoming accredited for BESS5:
- understand the requirements for this activity
- start preparing your application (see our Preparing your application page for more information)
- start preparing your systems and processes.
Household Annual Demand Response (HADR)
What has changed
From 1 July 2026:
- eligible battery capacity increases to 50 kWh (PDRS incentives only apply for the first 28 kWh of battery capacity)
- nomination can be within 90 days of onboarding (ACPs must be nominated at the time of certificate creation)
- the site must be a BCA Class 1 building or small business site
- warranty and solar photovoltaic requirements have been removed.
What you need to do
- understand the changes
- update internal systems and process to:
- make sure sites meet eligibility requirements
- account for nomination changes
- correctly calculate peak demand response capacity.
What has changed
Activity Definition V2G1 - Onboard a battery electric vehicle with a demand response aggregator is a new activity to commence on a date to be announced by the Minister for Energy.
What you need to do
We will publish more information ahead of the future date.
PDRS Rule change commenced 1 April 2026
The latest PDRS Rule applies to all implementations with an implementation date on or after 1 April 2026 to 30 June 2026.
The Rule change removed the BESS2 equipment requirement that from 1 April 2026 batteries must have a minimum warranted cumulative energy throughput equivalent to 3.65 MWh/kWh. The requirement for batteries to have a minimum warranted cumulative energy throughput equivalent to 2.8 MWh/kWh still applies.
See the document hub for the PDRS Rule, and for all versions of the Rule (including the current one).
PDRS Rule change commenced 12 September 2025
The previous version of the PDRS Rule applies to all implementations with an implementation date from 12 September 2025 to 31 March 2026.
Details of the specific changes to clauses in the Rule are in the September 2025 PDRS Reference Table.
You can also download the September 2025 ESS and PDRS Rule changes: Information session – What it means for you.