If you’ve been thinking about upgrading your hot water system or exploring energy-efficient options for your home or business, there’s never been a better time to act than right now. The NSW Government has rolled out some important updates to the Energy Savings Scheme (ESS). All designed to make the process safer, more transparent, and more rewarding for households and businesses alike!

So – here’s what changed, and what you need to know.

No More Door-Knocking or Cold Call

Let’s be honest here. No one enjoys a pushy sales pitch at the front door or over the phone. So, effective August 2025, the NSW Government has put a stop to unsolicited marketing under the ESS and Peak Demand Reduction Scheme (PDRS). That means there is now:

• No more door-knocking
• No more cold calls or telemarketing

This change protects consumers and makes sure energy upgrades are made via informed, voluntary decisions, not pressure tactics. If you’re considering upgrades, you can now do so with confidence and know the process will be respectful and transparent.

Stronger Warranty Requirements for Heat Pumps

Heat pump hot water systems are already a smart choice. They’re

• Energy-efficient,
• Reliable, and;
• Work in all weather conditions

But as of August 2025, they also come with stronger warranty protections under the ESS. All eligible heat pump systems installed through the scheme must now include:

• A minimum five-year warranty on the tank
• A minimum five-year warranty on all parts

This means greater peace of mind for homeowners and businesses. It’s also a clear signal that quality and durability are front and centre in the government’s energy efficiency push.

Updated Co-Payment for Commercial Hot Water Upgrades

There’s good news on the air conditioning front too, especially if you run a business and currently rely on gas hot water.

The ESS now offers new incentives for energy-efficient air conditioning systems. These upgrades are eligible for rebates under the scheme and can help reduce electricity bills and improve comfort, especially during peak summer months.

Eligible businesses can now access:

• Gas-to-heat pump upgrades for a minimum co-payment of $1,000 — up from the previous $200 contribution.

Sure, it’s a significant increase BUT it’s still a significant saving, especially when you factor in reduced energy bills and lower maintenance costs over time. For businesses in hospitality, aged care, or other sectors with high hot water demand, it is a golden opportunity to future-proof your operations.

Updated Co-Payment for Residential Hot Water Upgrades

There have also been changes for residential hot water systems.

Previously, eligible homeowners could upgrade to a heat pump hot water system for as little as $33. However, from August 2025, the minimum co-payment for residential hot water upgrades has also increased to $1,000.

Once again, it is a considerable increase but remember the long-term cost savings and environmental benefits! Specifically, these changes reflect the NSW Government’s push for higher-quality installations, stronger warranty protections, and more meaningful consumer engagement.

The Take Away

The upfront cost may be higher but…

The long-term savings – through reduced energy bills and improved system performance – still make it a smart investment for businesses and households looking to cut costs and reduce their carbon footprint.

New Incentives for Air Conditioning

There’s good news on the air conditioning front too! For both households AND small businesses…

The ESS offers new incentives for energy-efficient air conditioning systems. These upgrades are eligible for rebates under the scheme and can help reduce electricity bills and improve comfort, especially during peak summer months.

Eligible systems include:

• Reverse-cycle units
• High-efficiency split systems
• Other approved models

Co-payment amounts and installation details are available through approved providers, so if you’re considering an upgrade, now’s a perfect time to explore your options.

End of Commercial Lighting Incentives (March 2026)

The window is closing on commercial lighting upgrades. This includes rebates for LED or high-efficiency lighting installations in commercial settings and bundled lighting + hot water offers.

The discontinuation of these incentives reflects the NSW Government’s shift in focus to higher-impact technologies like heat pumps and air conditioning.

However, these are more than offset by the generous incentives available for other upgrades, especially hot water and cooling. Your business can continue to reduce energy costs and improve sustainability in other areas.

The Bottom Line

These changes to the NSW Energy Savings Scheme are designed to make energy upgrades safer, more transparent, smarter, and more accessible. Regardless of whether you’re a homeowner looking to cut costs or a business ready to make the switch…

For example, by choosing a heat pump hot water system, you’re not only saving money. You are also reducing your carbon footprint and contributing to a more sustainable future. And with stronger warranties, better protections, and increased incentives, the path to energy efficiency has never looked better. Want to find out if you’re eligible or explore your upgrade options? Visit the NSW Energy Savings Scheme page or speak to an approved supplier today. Efficient Energy Group is a leading partner in the EES and various other energy efficiency schemes across NSW.