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Australian Energy Incentive Schemes Overview

Australian Federal and State governments offer generous subsidies for a variety of clean energy technology upgrades, including solar and heat pump water heaters (HPWH).

Australian energy efficiency incentive schemes determine the level of rebate based on assessments made according to the AS/NZS 4234 standard, which provides a framework for assessing the energy performance of solar and heat pump water heaters across various climate zones. AS/NZS 4234 assesses system performance across 5 climate zones across Australia, enabling regulators to award systems a level of incentive according to the local climate conditions of each region.

Australia’s approach to promoting renewable energy and energy efficiency is structured through various certificate schemes: STC, VEEC, and ESC.

1. Small-scale Renewable Energy Scheme (SRES)

SRES applies nationally and is administered by the Clean Energy Regulator (CER). It creates Small-scale Technology Certificates (STCs), with solar and heat pump water heater calculations currently based on AS/NZS 4234:2008.

The SRES incentivises residential installations of renewable energy systems in Australia, such as solar water heaters and heat pumps, by issuing STCs. These certificates are calculated based on the displaced energy (GJ/year) compared to a reference electric water heater, promoting the reduction of greenhouse gas emissions.

STCs are tradable and can offset the installation cost. The scheme applies to systems up to 425 L, and the number of certificates a product earns depends on its energy performance and location zone.

2. Victorian Energy Upgrades (VEU) Program

VEU applies in Victoria and is administered by the Essential Services Commission (ESC). It creates Victorian Energy Efficiency Certificates (VEECs), with current heat pump water heater modelling based on AS/NZS 4234:2021.

The VEU program offers incentives through the generation of VEECs, which are awarded based on the abatement of greenhouse gases compared to a baseline scenario. This scheme covers residential activities (Activity 1D for electric replacement, 3C for gas replacement) and commercial activities (Activity 44A), enhancing energy efficiency across various applications.

1 VEEC is equivalent to 1 tonne CO₂-equivalent of greenhouse gas emissions saved relative to the reference system over the product’s lifetime. The program has helped over two million Victorian households since its inception in 2009.

3. Energy Savings Scheme (ESS)

ESS applies in New South Wales and is administered by the Independent Pricing and Regulatory Tribunal (IPART). It creates Energy Savings Certificates (ESCs), with residential heat pump water heaters generally handled through Home Energy Efficiency Retrofits (HEER) and commercial systems handled through Industrial, Commercial and Large-scale Energy Savings (IHEAB).

The ESS in NSW encourages energy savings by offering ESCs, which reflect the amount of energy saved through efficiency improvements. The calculations incorporate a variety of factors, including baseline energy use, energy consumption factors, and regional adjustments.

Residential HPWH activities include D17 (replacing electric) and D19 (replacing gas). Commercial activities include F16 (replacing existing hot water systems) and F17 (new installations).

How EnergyAE Can Help

EnergyAE specialises in registering solar and heat pump water heaters for all three schemes. We provide AS/NZS 4234 modelling, TRNSYS simulation, scheme eligibility assessment, application preparation, submission support, and ongoing compliance advice.

Get in touch to discuss registering your products.

References

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