The NSW Energy Savings Scheme (ESS) pays for energy that does not get used. When a business or household replaces an old appliance or upgrades a building, and the saving can be measured or deemed under a set method, the work can create Energy Savings Certificates (ESCs). Electricity retailers have to hold a number of them each year, so they buy.
For an installer, the ESS is less a separate business than a second source of certificate income on jobs you are already doing. This guide explains how the pieces fit, so you can decide how much of it belongs in your business.
The players
Four parties matter.
- IPART administers and regulates the scheme and accredits participants.
- Scheme participants (liable entities), mainly electricity retailers, must surrender ESCs to meet a target.
- Accredited Certificate Providers (ACPs) are the businesses allowed to create ESCs by registering the activity.
- Installers and tradespeople do the work that creates the saving. They are either the ACP, or they supply evidence to one.
NSW has a sister scheme for peak demand, the Peak Demand Reduction Scheme (PDRS), which creates PRCs. We cover its list in PDRS activities for installers. The two schemes share an administrator and a similar logic, but they pay for different things.
What one ESC is worth
One ESC equals one megawatt hour (MWh) of energy savings. The price is a market price, and it moves. Since NSW schemes move more slowly than federal ones, always check a current quote from a buyer rather than a number you saw last year. Our answer page on ESC price in NSW keeps the context.
A worked example, with assumed numbers. Suppose an activity is deemed to save 15 MWh over its life, a certificate count of 15, and the market price is $25. Value: 15 x $25 = $375. If the ACP keeps a margin and passes on the balance, the installer or customer may see something like $300. These figures are illustrations for arithmetic only. The real count comes from the method, and the real price from the market.
Which jobs create ESCs
The ESS is built on “activities”, each with a method for measuring or deeming savings. Broadly:
| Type | Idea | Example work |
|---|---|---|
| Deemed savings | A fixed saving per product installed | Replacing equipment with a more efficient model |
| Measured and verified | Savings measured against a baseline | Larger commercial and industrial projects |
| Project impact | Metered before and after | Complex site upgrades |
Residential and small business work is generally the deemed type. Heat pump water heaters in NSW are a classic example, and you can read how that interacts with federal certificates in our heat pump hot water STC guide. For the exact eligible products and calculation, use the current ESS rule and method documents on the NSW energy sustainability schemes site.
How a job becomes money
Walk through a single deemed job.
- The customer agrees to the work and the installer confirms the activity is eligible.
- The installer does the job and records evidence: product details, serials, photos, date, customer consent.
- An ACP checks the evidence against the method and creates the certificates in the scheme registry.
- The ACP sells the ESCs to a retailer or through a trader.
- The ACP pays the installer their share, according to the agreement.
Step five is where terms vary the most. Some ACPs pay in days, some in weeks, and some hold back until a later audit date. Our guide on how installers get paid for ESCs and PRCs compares the models, and NSW ESC payment time answers the timing question directly.
Should you become an ACP
There is a real trade-off.
- Becoming an ACP gives you control of the certificate and the margin. It also takes on audit obligations, systems and an application to IPART. See how to become an ACP in NSW.
- Working under an ACP is faster. You supply evidence and receive a share. You give up some margin, and you rely on their compliance.
A rough rule: if you do a handful of ESS or PDRS jobs a month, work under one. If certificate income is becoming a real line in your accounts, run the numbers on accreditation.
Where federal certificates fit
Some jobs sit in both worlds. A heat pump hot water system in NSW may create STCs federally, and may also qualify for NSW certificates, depending on the activity and rules in force. Each scheme has its own evidence and accreditation. Lodge the federal side through your normal STC trading process and the NSW side through your ACP. Use the STC calculator for solar and the hot water checklist for the federal evidence list.
A realistic example: replacing a hot water system in NSW
Consider a household in Sydney replacing an electric storage hot water system with a heat pump.
On the federal side, the installer creates STCs. The number depends on the model, its capacity and the postcode zone, and our heat pump STC guide explains the calculation. Say it comes to a few thousand dollars of certificate value, reduced from the quote as a discount.
On the NSW side, the same job may qualify for an additional activity, depending on the equipment, the property type and the method in force. The ACP checks, creates the certificates, and the value is shared back to the installer or customer.
What you must not do is count the same saving twice or ignore a rule that says certain incentives cannot be combined. The method documents state the combinations. When in doubt, ask your ACP to confirm eligibility before the quote goes out, not after the install.
Audit and record-keeping
IPART audits ACPs, and ACPs in turn audit the evidence installers supply. The scheme expects records to be kept for a stated period after certificate creation, and an ACP can be asked to produce them. If a certificate is found to have been created in error, it can be cancelled and the loss flows down the chain, usually to whoever signed the agreement that allows clawback.
Practical habits that make audits boring:
- Photograph the old and new equipment, including serial and compliance labels.
- Store the signed customer consent with the job.
- Record the date of installation and commissioning separately.
- Keep a copy of the method version used.
Our guide to how STC audits work covers the federal version of the same routine; the habits carry over almost unchanged.
What to do next
- Map your work to ESS and PDRS activities. Pick the two most common jobs you do.
- Find an ACP or consider your own application, comparing payment terms in writing.
- Build one evidence checklist that satisfies both federal and NSW rules for those jobs.
- Track the method version in force on each installation date.
- Ask your certificate buyer how they handle NSW certificates. Our ESCs and PRCs page sets out what we do and the pricing page shows current rates.