ESC stands for Energy Savings Certificate. It is the tradeable unit of the NSW Energy Savings Scheme, which exists to reduce energy use across the state by making retailers fund efficiency upgrades. One ESC equals one megawatt hour of energy savings.
How an ESC is created
An accredited certificate provider carries out an approved activity, such as installing an efficient heat pump hot water system or upgrading commercial lighting. The activity is calculated using a method set by the scheme, which converts the work into a number of megawatt hours of savings. Evidence is lodged, the regulator checks it and the certificates are registered. See how to sell ESCs.
Who buys them
Electricity retailers and some other liable entities have a target under the scheme. They meet it by surrendering ESCs. That demand is what gives the certificates value, and it is why providers can offer a discount on upgrades.
ESCs, PRCs and the PDRS
The Peak Demand Reduction Scheme sits alongside the ESS and creates PRCs, for activities that reduce peak demand. Some activities can create more than one type of certificate, subject to the rules. In 2025 the NSW battery incentive moved into the federal Cheaper Home Batteries Program, and the PDRS retained an incentive for connecting a battery to a VPP.
How it differs from STCs
STCs are federal, ESCs are state-based. A heat pump hot water system in NSW may be eligible for STCs and for ESCs, and the rules on combining them are set by each scheme. Check the relevant method. See also heat pump hot water rebates in NSW.
From the desk: do not assume a second certificate can be stacked on a job. Check the method and the stacking rules before you quote.
Where to read the rules
The scheme rules, activity methods and registry guides are published by IPART, and the NSW Government has summary pages for households and businesses. If you are an installer, read the method for each activity you plan to offer. It is the document that decides what evidence you need, and how many certificates a job creates.
What this means for you
If you work in NSW, learn which activities you can create ESCs for and who will buy them. For the federal side of hot water, see hot water STCs, and for the Victorian equivalent, VEEC trading. The resources hub has more.