Storage
Commercial batteries: when they pay, and when they don't
Storage is a second decision, not part of the first. Here is the arithmetic that decides it, and what New South Wales pays for peak demand reduction.
Solar first, storage second
A commercial solar system pays for itself by covering power the site would otherwise buy. That case is usually straightforward: the load is there, the generation matches it, and the arithmetic is a few numbers off a bill.
A battery is a different proposition. It rarely earns much by storing your own cheap daytime energy for the evening, because the spread between what you save and what the storage costs per cycle is thin. Where it earns money is in two narrower places: cutting a demand charge, and being paid to reduce peak demand under a scheme that exists for that purpose.
So the order matters. Size the solar against your daytime load — the guide covers how — then test storage against what is left over.
The two real cases
Where a commercial battery earns its keep
Demand charge reduction
Many commercial tariffs bill a capacity charge set by your highest demand interval in the period, separate from consumption. If that peak is sharp, predictable and falls outside strong generation, a battery sized to cover it can cut the charge materially. If your peak is at 1pm on a clear day, solar is probably already handling it and the battery adds little.
Self-consumption on a constrained site
On a site where the distributor limits or prohibits export, generation above the load is simply lost. Storage turns some of that spill into evening use. This is common on long rural feeders and in constrained parts of metro networks, and it is worth checking your export limit before assuming it applies to you.
The NSW Peak Demand Reduction Scheme
New South Wales runs a scheme that pays for capacity able to reduce demand during peak periods, administered by IPART. Commercial battery installations can be eligible, and the value is created as certificates that an accredited provider claims and passes through — normally as a discount on the installed price rather than a payment to you.
This is the one state-level mechanism on this site that can move a commercial storage decision on its own, which is why New South Wales gets a battery page rather than a generic state page.
Figures pending verification. Eligibility, the certificate calculation and current certificate values are being confirmed against IPART and energy.nsw.gov.au before they are published here. We would rather show you nothing than show you an incentive figure that has moved.
If your site is in New South Wales and you want the current numbers applied to your actual load, send a bill and they will be in the proposal, checked on the day it is written.
What to ask about a battery quote
- What demand charge is this actually reducing? Ask for the line on your bill it targets and the modelled reduction, not a percentage.
- What happens on a bad day? A battery sized to an average peak will miss the worst one, and the worst one may be what sets the charge.
- Warranty in cycles, not years. A commercial battery cycling daily ages differently to a residential one. Ask for throughput and end-of-warranty capacity.
- Who claims the certificates, and what do you actually receive? If a scheme value is in the quote, ask whether it is assumed or confirmed.
- Where does it go? Commercial batteries need space, ventilation and clearances that suit a switchroom or a compound, not a plant cupboard.
Common questions
Should we add a battery to a commercial solar system?
Usually not at the same time, and usually not for the same reason. Solar earns its money by covering daytime load; a commercial battery earns its money mostly by reducing demand charges or by being paid to reduce peak demand. Those are separate cases with separate arithmetic. Size the solar against your load first, then test whether storage adds anything on top.
What is a demand charge and can a battery reduce it?
Many commercial tariffs bill a capacity charge set by the site's highest demand interval in a billing period, separate from the energy you use. A battery can shave that peak if the peak is predictable and the battery is sized and controlled to cover it. If your peak falls in the middle of a sunny day, solar may already be doing the job. Read your own tariff before anyone sells you storage on this basis.
Is a commercial battery worth it without an incentive?
It depends almost entirely on your demand charge and how sharp your peak is. A site with a flat load profile and a small capacity charge rarely justifies storage on economics alone. A site with a short, severe peak can. This is a case where the answer genuinely differs site to site, which is why we read the bill rather than quote a rule of thumb.
Storage only makes sense against a real load profile
Send a bill and we'll tell you whether a battery does anything for your site, including when the answer is no.