Rebate guide — New South Wales
NSW Energy Savings Scheme: discounts on household energy upgrades
The NSW Energy Savings Scheme (ESS) lowers the upfront cost of energy-efficient upgrades for NSW households and small businesses. Installers partnered with Accredited Certificate Providers apply the discount directly to your quote, with hot water, air conditioning and virtual power plant incentives available.
Last updated: 10 July 2026
How does the Energy Savings Scheme work?
The ESS is a certificate scheme rather than a cash rebate. When an eligible upgrade is installed, the energy savings it delivers create tradeable certificates. Installers partner with Accredited Certificate Providers (ACPs) — businesses independently accredited by the Independent Pricing and Regulatory Tribunal (IPART) — who create and sell those certificates, and the certificate value funds the discount you see on your quote.
Some household incentives (such as air conditioning and the virtual power plant incentive) run under the closely related Peak Demand Reduction Scheme; together they form the NSW Energy Security Safeguard. The consumer-facing umbrella for all of this is the NSW Government's Household energy saving upgrades program.
ESS is not the same program as NSW Home Energy Saver, a separate zero-interest loan of up to $15,000 (plus an upcoming low-income discount) covering a broader list of upgrades. The two are designed to stack — any ESS discount is applied to your quote first, and a Home Energy Saver loan can cover the remainder.
What household upgrades are covered?
- Hot water upgrades — replacing an inefficient hot water system with a heat pump or solar hot water system. The NSW Government cites an indicative incentive of between $405 and $675 for replacing an electric water heater with a heat pump; the exact discount varies with the certificate market and is shown already applied on your quote. Details: hot water upgrade incentive.
- Air conditioner upgrades — discounts on efficient reverse-cycle air conditioners for both new installations and replacements. The NSW Government cites indicative discounts of up to $550 for a new 6kW system and up to $560 when replacing an old unit with a 6kW split system (indicative only — actual discounts vary).
- Virtual power plant (VPP) incentive — an incentive for connecting a home battery to a virtual power plant, which can be combined with the federal Cheaper Home Batteries discount.
Am I eligible?
- All NSW households and small businesses may be eligible — there is no income or property-value test.
- Your access depends on whether installers offering the incentive service your area.
- The incentive is based on the energy savings your new system achieves, so if your existing appliance is already energy-efficient, you may not qualify.
- Upgrades fixed to a rental property need the owner's approval.
How do I get a discount?
- Contact installers directly and ask whether they offer the incentive — only installers partnered with an Accredited Certificate Provider can apply it.
- Get multiple quotes and check that the discount is shown on each quote, so you can compare like for like.
- Expect to make a minimum payment towards the appliance and installation — the discount reduces the price, it never covers the full cost.
- The installer and their ACP handle the certificate paperwork; there is no claim-back process for you.
What about home batteries in NSW?
The NSW battery installation discount is no longer available — it ended on 1 July 2025 when the Australian Government's Cheaper Home Batteries Program took over battery purchase discounts nationally. NSW households can still access the state's virtual power plant (VPP) incentive for connecting a battery to a VPP, and the two can be combined: the federal discount reduces the battery purchase price, and the NSW VPP incentive rewards putting that battery to work in the grid.
Can ESS discounts be combined with other support?
- Solar systems attract small-scale technology certificates (STCs) under the federal Renewable Energy Target — these are separate from the ESS and are already built into solar quotes.
- Battery buyers can stack the federal Cheaper Home Batteries discount with the NSW VPP incentive, as above.
- The ESS itself is not means-tested, so it combines naturally with any income-targeted support you may receive — check the full list of NSW rebates and grants for what else applies to your household.
Frequently asked questions
Do I apply for the Energy Savings Scheme discount myself?
No. The discount is applied upfront by an installer partnered with an Accredited Certificate Provider (ACP) and shown on your quote — unlike a rebate, no money is paid to you afterwards. You will always make a minimum payment towards the cost of the appliance and installation.
How much can I save replacing an electric hot water system with a heat pump?
The NSW Government cites an indicative incentive of between $405 and $675 when replacing an electric water heater with a heat pump. The exact amount depends on the system, your location and the certificate market, and it appears already applied on a participating installer's quote — so compare quotes from more than one installer.
Can renters get an ESS hot water or air conditioning upgrade?
All households in NSW may be eligible. For upgrades fixed to the property, such as a hot water system, the property owner's approval is needed, so renters should involve their landlord. Access can also depend on whether installers offering the incentive service your area.
Is there still a NSW battery rebate?
The NSW battery installation discount ended on 1 July 2025, when it was replaced by the Australian Government's Cheaper Home Batteries Program. NSW still offers a separate virtual power plant (VPP) incentive for connecting a battery to a VPP, and it can be combined with the federal battery discount.
What consumer protections apply?
The NSW Government has banned unsolicited door-knocking sales for these upgrades, and heat pump water heaters (up to 700L average insulated storage volume) must carry a minimum five-year warranty against defects. Installers must work with providers accredited by IPART, which enforces safety and process requirements.
Is there an income test for ESS discounts?
No. The Energy Savings Scheme is not means-tested — eligibility depends on the energy savings your upgrade delivers, not your income. If your existing appliance is already energy-efficient, you may not qualify, because the incentive is based on the savings the new system achieves.
Related rebate guides
Which upgrades will actually cut your bills?
Discounts are only good value when they fund the right upgrade for your home. A home energy assessment shows where your home loses energy and which upgrades — hot water, heating and cooling, or sealing — will make the biggest difference before you get quotes.