NSW Energy Savings Scheme (ESS)
The NSW Energy Savings Scheme helps households and businesses in New South Wales reduce energy consumption and costs through subsidised upgrades. We connect you with accredited consultants who can help you take advantage of the scheme.
What Is the NSW Energy Savings Scheme?
The Energy Savings Scheme (ESS) is a NSW Government initiative established under the Electricity Supply Act 1995 and administered by the Independent Pricing and Regulatory Tribunal (IPART). The scheme creates financial incentives for households and businesses to invest in energy-efficient equipment and practices by generating tradeable Energy Savings Certificates (ESCs).
Under the ESS, Accredited Certificate Providers (ACPs) facilitate energy-saving activities and create ESCs based on the estimated energy savings achieved. These certificates are purchased by electricity retailers who must surrender a prescribed number of certificates each year. This mechanism effectively subsidises the cost of energy efficiency upgrades for end users.
Since its inception in 2009, the ESS has delivered billions of kilowatt-hours in energy savings across New South Wales, reducing electricity bills and greenhouse gas emissions for hundreds of thousands of NSW residents and businesses.
Eligible Activities Under the ESS
The ESS covers a broad range of energy-saving activities across residential, commercial, and industrial sectors. Eligible activities are categorised into several methods:
- Residential lighting — Replacement of halogen downlights and inefficient lamps with LED alternatives.
- High-efficiency appliances — Installation of energy-efficient refrigerators, washing machines, dryers, and other household appliances replacing older models.
- Space conditioning — Upgrading to high-efficiency reverse-cycle air conditioners, removing old inefficient heating systems, and installing building insulation.
- Hot water systems — Replacing electric resistance hot water systems with heat pump or solar hot water systems.
- Commercial lighting — Upgrading commercial and industrial lighting systems to high-efficiency LED alternatives with appropriate controls.
- HVAC upgrades — Installation of high-efficiency commercial heating, ventilation, and air conditioning systems.
- Motors and drives — Replacement of standard electric motors with high-efficiency alternatives and installation of variable speed drives.
- Power factor correction — Installation of power factor correction equipment to reduce electricity losses in commercial and industrial facilities.
Energy Savings Certificates Explained
Energy Savings Certificates (ESCs) are the currency of the ESS. One ESC represents one tonne of carbon dioxide equivalent (tCO2-e) in avoided greenhouse gas emissions, calculated based on the energy savings delivered by an eligible activity over its expected lifetime.
The certificate price fluctuates based on market supply and demand but typically ranges from $20 to $35 per certificate. This value is passed through to end users in the form of discounted or free energy-efficient products and installation services. For large commercial or industrial projects, the certificate value can offset a significant portion of the upgrade cost.
How to Access the ESS
Participating in the ESS is simple for end users. You do not need to register with the government or apply for certificates yourself. Instead, you work with an Accredited Certificate Provider (ACP) who handles all the compliance, paperwork, and certificate creation. The typical process involves:
- Contact an ACP or use our consultant finder to locate one near you.
- The ACP assesses your property and recommends eligible upgrades.
- You agree to the upgrade and the ACP arranges installation, often at a heavily discounted price.
- The ACP creates ESCs from the activity and manages all regulatory requirements.
ESS and BASIX
For new residential developments in NSW, the ESS operates alongside the BASIX (Building Sustainability Index) requirements. While BASIX sets minimum energy and water efficiency standards for new builds, the ESS primarily targets upgrades to existing buildings. However, some overlap exists where new high-efficiency equipment installed as part of a development may qualify for ESCs, effectively reducing the total project cost.