If you search for a NSW heat pump rebate, you will find offers that sound like a government payment. They are not. What a NSW household actually gets is a discount on the price of the job, funded by two certificate schemes, one federal and one state. You do not fill in a form or wait for a payment. The value is built into the quote by your installer, and what matters to you is knowing how to read it.
This guide explains what the two schemes are, how they combine on a heat pump, an illustrative quote and the questions that tell you whether a quote is solid. We do not state NSW certificate counts or dollar values because they depend on the product, the activity rules and the date. For the technical background, see our NSW heat pump hot water rebate answer and the ESC explainer.
Two certificate schemes, two discount lines
Federal STCs
Eligible air-sourced heat pump water heaters earn STCs under the federal Small-scale Renewable Energy Scheme. The number depends on the registered model, climate zone and installation type. At the time of writing STCs have been roughly $38 to $40 each, so a unit earning 25 STCs would be worth roughly $950 to $1,000. That 25 is illustrative. See how many STCs a heat pump earns.
NSW ESCs
Under the NSW Energy Savings Scheme, an accredited certificate provider can create ESCs when a qualifying heat pump replaces an existing hot water system. The activity definition sets the product requirements and how the savings are calculated. Details noted by the scheme include a minimum five-year warranty for most residential-sized heat pump systems from 1 December 2025. Rules were updated again on 1 July 2026, so the installer should be working from the current definition.
What the discount looks like
An illustration, not a price guide:
| Line | Example |
|---|---|
| Installed price before incentives | $4,500 |
| Less federal STC discount (25 STCs at about $39) | -$975 |
| Less NSW ESC discount (set by the activity and the provider) | shown as its own line |
| Price you pay | your installer’s figure |
The STC line is calculated from numbers you can check. The ESC line is set by the provider, so ask what number of ESCs and what price per ESC they are using. A quote that shows only a final price tells you nothing about whether the discount is real.
Who qualifies
The federal STCs follow the registered product list and the installation type. The NSW activity has its own conditions, usually around the product, the equipment being replaced and the installer’s accreditation. In general:
- The heat pump must be on the relevant product lists and meet the warranty and specification requirements.
- The job must be a qualifying activity, which commonly means replacing an existing electric resistance or gas system.
- The installer must be licensed and the work properly certified.
- You give consent and sign the paperwork assigning the right to create certificates.
Ask your installer to confirm each point in writing for your system. The installation type guide explains why “replacement” versus “new” changes the answer.
From the desk: photograph the old hot water unit, its data plate and its connections before it is removed. It takes two minutes. If the claim is queried later, those photos are the evidence that you replaced a qualifying system, and they cannot be recreated once the old unit is in a skip.
Questions to ask each installer
- Which certificates are included in this quote, STCs, ESCs or both?
- How many of each, and what dollar value per certificate?
- Who creates the ESCs, and are they an accredited certificate provider?
- Is the product eligible for both, and can you show me the listing?
- Do I need to do anything beyond signing the forms?
- What happens to my price if a certificate is refused after install?
Number 6 is the one that separates a careful installer from an optimistic one.
Comparing quotes
Two quotes with the same final price can hide different assumptions. Put the incentive lines side by side:
| Quote A | Quote B | |
|---|---|---|
| Product and model | ||
| STCs and price each | ||
| ESCs and price each | ||
| Warranty (five years or more for eligible systems) | ||
| Net price |
If one quote includes a large ESC discount and the other none, ask why. Either the product qualifies for one and not the other, or one installer is not claiming what they could.
Timing and change
State rules move. New ESS and PDRS rules commenced on 1 July 2026, and some commercial heat pump incentives change after 31 December 2026. For households, the practical point is that a quote should state its date and assumptions. If your job is a planned upgrade, get quotes now and check the validity period. If your hot water system has failed, do not wait for the perfect incentive. Install a qualifying system and make sure the paperwork is complete. The federal scheme also ends on 31 December 2030, as covered in when the STC scheme ends.
If you are an installer in NSW
Heat pump jobs can create federal STCs and NSW ESCs from the same set of photos. STCs settle through a trader on a published rate. Our hot water STCs page explains the claim, and the heat pump checklist lists the evidence. On the ESC side, see how to create ESCs. The Energy Merchants desk handles STCs and pre-checks each claim before lodgement. Today’s rate is on /pricing/.
If the quote looks too good
A discount that seems far larger than the combination of the two schemes could explain deserves a question. At roughly $38 to $40 an STC, a typical heat pump earns a federal discount in the high hundreds of dollars. If a quote promises thousands off with no breakdown, ask where it comes from. It may be a genuine ESC value, a separate offer or simply a high list price discounted down for effect. Compare net prices, product models and warranties rather than the size of the discount. A fair quote is one where each line can be explained, and where the installer is happy to put the assumptions in writing.
What to do next
- Get two written quotes that show the STC and ESC lines separately.
- Check the product and warranty against the quote.
- Photograph the old system before removal.
- Keep copies of the signed forms.
- Read heat pump hot water STCs explained for the federal side in more depth, and the resources hub for the paperwork guides.