ESS (Energy Savings Scheme)

Written and checked by the Energy Merchants desk · Reviewed 2 October 2026

ESS stands for Energy Savings Scheme. It is the NSW program that pays for reduced energy use by creating Energy Savings Certificates (ESCs). Obligated parties, mainly electricity retailers, must buy ESCs each year, and that obligation funds discounts on upgrades like efficient lighting, hot water and heating or cooling.

The scheme is run by a NSW scheme administrator, and certificate providers must be accredited to create ESCs.

In practice

Customers do not usually ask for “the ESS”. They ask for a cheaper upgrade. For the installer, the ESS matters if you work under or with an accredited certificate provider who creates ESCs for your jobs. Your role is usually to deliver the activity correctly and capture the evidence: product details, installation records and customer consent. The provider handles the registration and sale.

The ESS has a sibling, the Peak Demand Reduction Scheme (PDRS), which uses the same legislative framework but creates PRCs for peak demand cuts. If your work involves batteries, smart controls or high-efficiency cooling in NSW, you are more likely to meet the PDRS. See PDRS definition.

Common confusion

The ESS is state-based and should not be confused with the federal Small-scale Renewable Energy Scheme, which creates STCs. See SRES definition. A single NSW household job can touch both: solar or a battery creates federal STCs, while an efficiency upgrade may create ESCs.

Victorian readers sometimes assume ESS is the same as Victorian Energy Upgrades. It is the closest equivalent, but VEECs and ESCs are separate certificates traded under different rules.

More terms are in the certificate trading glossary. For the federal certificates we handle, see STC trading and how it works.