Energy Savings Scheme NSW
The Energy Savings Scheme provides businesses with financial incentives to upgrade equipment and processes to improve energy efficiency.

What you get?
Incentive payments vary.

Who is this for?
NSW businesses.

The Energy Savings Scheme (ESS) provides NSW businesses with financial incentives to invest in projects which will reduce their energy consumption. Incentives are available to install new equipment or modify a current system.

Different equipment and processes are eligible, including but not limited to:

  • lighting
  • heating, ventilation, and air conditioning (HVAC) systems
  • motors, fans and pumps
  • compressed air systems
  • refrigeration
  • power systems
  • hot water and steam systems
  • furnaces

Any work undertaken must be done in conjunction with a government-approved supplier. These approved suppliers are known as Accredited Certificate Providers (ACP’s). An ACP will explain the process and assist you to get the incentive.

The ACP will calculate the potential energy saved with a proposed upgrade. This energy saving is then converted into Energy Saving Certificates (ESC’s) which are sold to an energy retailer.

Some of the money from selling the ESC’s is then returned to your business. The more energy saved, the greater the return.

What are the eligibility criteria?
To be eligible, your business must be located in NSW.

How do you apply?
Find out more about eligibility and how to apply at Energy Savings Scheme.

NSW Energy Savings Scheme

The Energy Savings Scheme provides businesses with financial incentives to upgrade equipment and processes to improve energy efficiency.

The NSW Energy Savings Scheme (ESS) provides financial incentives to install energy efficient equipment and appliances in NSW households and businesses.

The ESS was established in 2009 under the NSW Electricity Supply Act 1995 and has been highly successful. Since its inception, the ESS has supported projects that will deliver more than 32,500 gigawatt hours of energy savings and over $6.1 billion in bill savings by 2029.

In September 2021, the NSW Government released a position paper that sets out the Government’s final position on the design of the Energy Security Safeguard, including major reforms to the ESS. See Review and reform of the Energy Savings Scheme for further information.

The current Energy Saving Scheme Rule

The Energy Savings Scheme Rule (ESS Rule) details how Energy Savings Certificates are created.
The current ESS Rule is effective from 1 August 2022. The rule was updated to include changes to the refrigerated cabinet activity.

The key changes include:

separating new and replacement activities
reducing the energy efficiency index (EEI) for baselines
the introduction of a minimum $250 co-payment requirement.
A transitional arrangement has been included for contracts executed on or before 1 August 2022, where the implementation date is before 15 August 2022.

You can read more about the changes in the refrigerated cabinets position paper.

The Energy Savings Scheme Rule is updated annually

The NSW Government has committed to updating the ESS Rule on an annual basis. The annual updates to the ESS Rule are intended to:

incorporate stakeholder feedback and evaluation results
maintain the effectiveness of the ESS Rule through updates to savings factors, changes to the Rule requirements and adding activity schedules for new technologies
complement changes to building and equipment standards
incorporate new methods for Energy Savings
make other enhancements to the ESS Rule to maintain its integrity and/or reduce transaction costs

Review of lighting methods

The ESS has incentivised the uptake of energy efficient lighting in NSW since the scheme’s inception in 2009. Lighting upgrades make up the majority of energy savings delivered through the scheme to date.

In 2017, the Department of Planning, Industry and Environment commissioned the Lighting Market Impact Evaluation (LMIE) study, which was supported by a quantitative model: LMIE report (PDF 6.84MB) and accompanying Modelling assumptions report (PDF 2MB).

The evaluation found that the ESS has brought forward the uptake of LED lighting technologies and upgrades in NSW by 7 to 10 years. With LED lighting becoming the norm for new product sales, at current trends LEDs will soon replace most common lighting technologies.

In mid-2020, the NSW Government commissioned Beletich Associates, Common Capital and Light Naturally to review and update all 3 ESS-deemed lighting methods to reflect the latest market and policy developments, and to provide detailed recommendations on the improved delivery of the lighting upgrades.

A targeted consultation workshop was held on Wednesday 9 September 2020 where Beletich Associates, Common Capital and Light Naturally presented their draft findings along with future options for lighting in the ESS.