Costs, Price Factors and 2026 Rebates
NSW Energy Savings Scheme discounts for heat pump hot water and air conditioners in 2026
How NSW households get Energy Savings Scheme discounts on heat pump water heaters and efficient air conditioners, the published amounts, the PDRS link and the paperwork.
In NSW, households and small businesses can get an upfront discount on an eligible heat pump water heater or efficient air conditioner through the Energy Savings Scheme (ESS), which IPART administers. The discount is delivered by installers who partner with an Accredited Certificate Provider (ACP) and appears on the quote. As published by NSW Climate and Energy Action in February 2026, the discount is up to $330 for replacing a gas water heater with a heat pump and up to $640 for replacing an electric water heater, and air conditioner examples include up to $550 for a new 6 kW system and up to $560 for replacing an old unit with a 6 kW split. Amounts vary by installer, location and model. This guide is part of the installation cost overview.
How the scheme works
The ESS is part of the NSW Energy Security Safeguard, which also includes the Peak Demand Reduction Scheme (PDRS). Both work on certificates:
- Accredited Certificate Providers create certificates for the energy savings (ESS) or peak demand reductions (PDRS) from an eligible upgrade.
- Liable energy retailers must buy and surrender certificates.
- The value of the certificates funds the discount the installer passes to you.
NSW Climate and Energy Action describes the household discounts for hot water and air conditioners as part of the ESS. Some air conditioner and hot water activities can also create PDRS certificates; the NSW eligibility and certificate pages explain which activities qualify. You do not need to calculate certificates yourself — the installer and ACP do it — but knowing the structure helps you read a quote.
Published discount examples (2026)
| Upgrade | Published example discount | Notes |
|---|---|---|
| Gas water heater → heat pump | Up to $330 | Lower than electric-to-heat-pump because savings are measured differently |
| Electric water heater → heat pump | Up to $640 | Common for homes with old electric storage tanks |
| New 6 kW air conditioner | Up to $550 | Must be on the eligible list |
| Replace old unit with 6 kW split | Up to $560 | More efficient models generally attract larger discounts |
Source: NSW Climate and Energy Action household energy saving upgrade pages, last updated 6 February 2026, listed as "available now" with no current closing date. Check the current figures before you sign.
Conditions to know before you book
For heat pump water heaters:
- Installation by a licensed plumber or electrician, with a signed Post Implementation Declaration and photos.
- The heat pump needs at least a 5-year defect warranty covering the unit, tank and components.
- If you already have an energy-efficient system you may not qualify, because the discount depends on potential savings.
For air conditioners:
- The model must be on the eligible list; not all models qualify and two models with the same kW can attract different discounts.
- You must make a minimum payment towards the cost.
For both:
- A nomination form must be signed before installation starts. Work already completed is not reimbursed.
- Your own licensed tradesperson can do the work if they partner with an ACP.
- The quote must show the discount and the total cost.
Combining with STCs and other offers
For heat pump water heaters, the national STC discount usually applies as well. A quote might show:
Illustrative example (electric storage → heat pump in Sydney):
- Installed price: $4,300.
- STC discount (illustrative): $700 → $3,600.
- ESS discount (illustrative, within the published "up to $640"): $600 → $3,000 payable.
All figures are illustrative. Your installer will confirm the STC count and ESS discount for the exact model and address. See the STC guide and test the result in the payback calculator.
For an air conditioner, combine the ESS discount with the installed price from the installation cost estimator. A 6 kW back-to-back split estimated at $2,800–$4,300 (6 × $350–$600 + $700) might come down by a few hundred dollars if the model and replacement scenario qualify.
Step-by-step
- Check the eligibility page for your upgrade on the NSW Climate and Energy Action website.
- Ask two or three installers whether they partner with an ACP and offer the discount at your address.
- Get written quotes that list the model, the discount, the STC amount (hot water) and the total.
- Check the installer's licence on the NSW Government's licence check service and, for split systems, their ARCtick licence (licence guide).
- Sign the nomination form before work begins.
- After installation, sign the Post Implementation Declaration and keep copies of everything.
Red flags
| Red flag | Why it matters |
|---|---|
| "Free" heat pump with no written quote | The discount has limits and a minimum payment may apply |
| Pressure to sign the nomination form at the door | Unsolicited sales rules give cooling-off rights; read the form first |
| Installer will not name the ACP | You need the ACP's name to raise concerns with them or IPART |
| Model number missing | You cannot check eligibility or warranty |
| Work starts before paperwork is signed | Completed work is not reimbursed |
If you have concerns, contact the installer, the ACP named on your nomination form or IPART. See rebate scams and door-knocking.
Frequently asked questions
Do renters qualify?
The scheme is aimed at households and small businesses, but the owner usually has to agree to an installation. Renters should talk to their landlord first.
Is the NSW discount the same everywhere in the state?
No. It depends on whether local installers offer it, the model and the installer's costs. Regional areas may have fewer participating installers.
Can I get the discount for a ducted system?
Eligibility is by product and activity. Check whether your ducted model is on the eligible list and ask the installer.
Who regulates the scheme?
IPART is the scheme administrator and regulator for the ESS and PDRS, accrediting certificate providers and auditing activities.
Official sources
- NSW Climate and Energy Action — household energy saving upgrades and eligibility pages
- IPART — Energy Savings Scheme and Peak Demand Reduction Scheme administration
- NSW Fair Trading — consumer rights, licence checks and complaints
- Clean Energy Regulator — STCs for heat pump water heaters
