Victoria government opens the third round of its neighbourhood BESS initiative in Australia

LinkedIn
Twitter
Reddit
Facebook
Email

The Victoria government has launched the third round of its 100 Neighbourhood Batteries Program, allocating AU$6.6 million (US$4.34 million) to support the installation of battery energy storage systems (BESS) across the state.

This initiative aims to empower communities in Victoria to benefit from rooftop solar PV without requiring individual home battery systems.

Neighbourhood batteries are smaller than utility-scale batteries, making them easier to site and quicker to construct.

Designed to serve entire communities, these distributed BESS solutions provide a cost-effective and scalable approach to energy storage and distribution.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

Funding details and BESS project requirements

Through the Neighbourhood Battery Initiative grant programme, the Victorian state government is offering up to AU$400,000 per project to applicants who can demonstrate multi-use case applications for BESS.

A total of AU$42 million is available for relevant projects under the programme.

The initiative covers systems that include a neighbourhood battery, solar PV, a generator, and a management system. Each battery must have a minimum size of 20kW/40kWh and a maximum size of 5MW/20MWh.

This funding round prioritises projects that benefit diverse, low-income, and vulnerable households, as well as those in outer suburbs and regional areas of Victoria.

The programme is expected to help Victoria achieve its target of 100 Neighbourhood BESS installations, further advancing the state’s renewable energy goals.

Victoria’s minister for energy and resources, Lily D’Ambrosio, emphasised the program’s potential to reduce energy costs and benefit communities.

Neighbourhood batteries and BESS adoption in Australia

Neighbourhood and community batteries, including BESS, have become a focal point for Australian policymakers, given their ability to harness the country’s extensive distributed rooftop solar PV generation capacity.

The technology has garnered significant attention from industry leaders and government agencies.

In July 2024, the Australian Renewable Energy Agency (ARENA) approved AU$143 million in funding through its Community Battery Funding Round 1 initiative to scale BESS technology.

This scheme will deploy 370 community batteries across Australia, benefiting all states and the Northern Territory. ARENA anticipates the initiative will unlock around AU$359 million in renewable energy infrastructure investment.

One of the awardees of ARENA’s initiative was the not-for-profit consultancy Yarra Energy Foundation (YEF), which has installed several community BESS in Melbourne and its surrounding suburbs.

YEF was an early adopter of community batteries, starting with its Fitzroy North BESS in Melbourne, installed in 2022.

Earlier this year, YEF reported that its Fitzroy North community battery generated AU$8,423 in revenue (excluding GST) for the 2023-24 financial year.

The revenue primarily came from energy arbitrage (AU$8,158), with a smaller portion derived from Citipower’s bidirectional community battery trial tariff (AU$1,046). YEF explored these findings further in a guest blog on Energy-Storage.news in February 2025.

Our publisher, Solar Media, will host the Battery Asset Management Summit Australia 2025 on 26-27 August in Sydney. You can get 20% off your ticket using the code ESN20 at checkout.

3 November 2026
Málaga, Spain
Understanding technology and supplier selection for Europe’s utility-scale PV market in 2027. PV ModuleTech Europe 2026 is a two-day conference that tackles these challenges directly, with an agenda that addresses all aspects of PV module, inverter and battery supplier selection; product availability, technology offerings, supply chain traceability, quality assurance, factory auditing, system reliability, and supplier bankability.

Read Next

September 25, 2026
Recently, US BESS companies Energy Vault and Goshe, SMT Energy and Climate Adaptive Infrastructure, and NeoVolta and SK On have made major deals and secured strategic partnerships.
September 25, 2026
ESR, a Singapore-headquartered real asset owner and manager focused on logistics real estate and data centres, has signed an agreement to acquire 100% of Aquila Clean Energy APAC.
September 25, 2026
AEMO has said that a record 9.1GW of new renewable energy and storage capacity connected to the National Electricity Market (NEM) in FY26.
September 24, 2026
Market research firm Wood Mackenzie stated that data centre buildout is uplifting the US battery energy storage system (BESS) outlook across all segments.
September 24, 2026
AGL has advanced two grid-scale BESS in New South Wales, one now before Australia’s EPBC Act and the other still in early planning.