Energy Savings Scheme

The Energy Savings Scheme (ESS) aims to deliver cost-effective energy savings for NSW households and businesses by providing financial incentives to install energy-efficient equipment and appliances. The ESS also incentivises energy retailers and large energy users to reduce their use of fossil fuels. The ESS is NSW’s largest energy-efficiency program and is one of the key programs for NSW to achieve net zero emissions by 2025. The ESS was established in 2009 and will remain operational until 2050 under the NSW Electricity Supply Act 1995, in line with NSW’s net zero goals.

Between 2009 and 2023, the ESS has supported projects that will deliver 57,000 gigawatt hours (GWh) of energy savings over their lifetime. As of December 2023, the ESS has reduced greenhouse gas emissions by around 27 megatonnes (Mt). This is the same as the carbon emissions produced by the NSW transport sector in 2022.

Under the ESS Rule, we set out targets for energy retailers and large energy users. These targets are met by creating or buying Energy Savings Certificates (ESC). ESCs are created for eligible activities that reduce energy usage, such as installing energy-efficient appliances. These activities are updated regularly in consultation with industry stakeholders to ensure they remain effective, in alignment with the objectives of the Energy Security Safeguard.

We review the ESS every 5 years. During the 2020 review we increased the energy savings target of the scheme by 0.5% each year from 2022, reaching 13% in 2030. The target will then remain at 13% until the end of the scheme in 2050.

Find out more about the ESS.

The current ESS Rule

The current ESS Rule was published on 24 May 2024 and commenced on 19 June 2024. It includes transition arrangements for creating ESCs using the previous ESS Rule. 

We made key changes, including:   

• suspending incentives for the new refrigerated cabinet activity 
• amending both refrigerated cabinet activities to reduce lifetime savings and removing incentives for 4-sided display cabinets 
• aligning the high-efficiency pool pump activity with the Peak Demand Reduction Scheme (PDRS)   
• updating the energy savings methodology for the air conditioners for business activity 
• creating new baselines and calculations to ensure energy savings from residential and small business hot water systems better reflect real-world savings 
• adjusting the co-payments for residential hot water and adding new co-payments for residential air conditioning and commercial hot water heaters 
• making administrative improvements. 

These 2 position papers provide more detail on this May 2024 Rule change: 

• May 2024 update position paper 
• December 2023 position paper 

Learn more about previous changes to the ESS Rule. 

Get involved

We collaborate with industry through research and public consultation. We’ll keep you informed by updating activities regularly on our website and via email.

Email us to learn more about and get involved in our research and consultation at [email protected]

Thank you for submitting your interest.