The NSW Energy Savings Scheme (ESS) is moving away from paying for gas and toward paying for electric alternatives. If you are asking about gas-to-electric conversion, the direction of travel is on your side, but the detail matters.
What changed in 2026
New ESS and PDRS rules commenced on 1 July 2026. As reported at the time of writing, ESS incentives for several gas activities were wound back: to create ESCs for them, work had to be completed and the certificates fully registered by 30 June 2026. From 1 July 2026 the excluded activities included gas-fired boilers, gas-boosted water heaters and gas space heaters.
Electric alternatives were kept. Heat pump water heaters remain supported, and a minimum product warranty of five years was reported for systems installed under the scheme. Treat those as reported figures and read the current activity rule before you rely on them.
What counts as a conversion
A gas-to-electric conversion covers a few different jobs, and each follows its own activity rules.
- Hot water. Replacing a gas storage or instantaneous unit with a heat pump water heater. This is the most common pathway; see the NSW heat pump hot water rebate and the ESS hot water activity.
- Space heating and cooling. Replacing gas ducted heating with efficient reverse-cycle electric. Activity availability and baselines change, so check the method for the job date.
- Commercial plant. Boilers and process heat have their own methods and measurement requirements.
Stacking with federal certificates
A heat pump can also create federal STCs, which raises the stacking question: can the same job earn STCs and ESCs? Our pages on stacking heat pump STCs and ESCs in NSW and the heat pump hot water checklist set out what to check. The short version is that the rules prevent double-counting the same benefit, so the order of claims and the evidence matter.
What this means for installers
Re-train your quoting. A quote that assumed ESCs on a gas upgrade in 2025 is no longer valid. For electric conversions, build your checklist around current evidence and warranty rules, then confirm the product is on the right approved list. For heat pumps, our hot water STC pillar and how heat pump STCs work cover the federal side.
What this means for you
If you are a homeowner or business thinking about leaving gas, the incentive stack for electric hot water remains a sensible reason to move, but get the quote to show every discount line. Ask which scheme each is from, and whether it applies to the install date.
Related
See the ESCs and PDRS hub, and what an ESC is.