Registering Commercial HPWHs for VEU (VEECs) and ESS (ESCs): The Five Step Guide

The Victorian Energy Upgrades (VEU) and the NSW Energy Savings Scheme (ESS) both pay for commercial heat pump water heating. VEU pays through Activity 44, set out in Part 44 of the VEU Specifications, and issues VEECs. ESS pays through the IHEAB method and issues ESCs. Both are deemed schemes, so a system is modelled once, registered once, and every installation of that registered system then creates certificates.

Registration is per system configuration, not per heat pump model. The heat pump, the tanks, the plumbing arrangement, the booster element and the control settings all sit inside the registered product. Two systems built from the same heat pump can earn very different certificate counts.

This guide sets out the path from a product idea to a listing on both registers in five steps.

The five step protocol

Steps 1 to 3 run in sequence, because each one needs the output of the one before it. Step 4 runs alongside steps 2 and 3, and it is usually the step that decides whether the project lands on time.

#	Step	Who does it	Typical duration
1	Design	You, with preliminary modelling if useful	Days to weeks, depending on how settled the range is
2	Test	A recognised test laboratory	The longest lead item. Book early
3	Model	EnergyAE	About 2 weeks for modelling and submission preparation, once documents are complete
4	Certify	Certification bodies and test laboratories, arranged by you	Runs in parallel. Electrical safety is the usual holdup
5	Register	EnergyAE lodges, ESC and IPART assess	6 to 10 weeks for assessment

What the two schemes pay for

The schemes are administered separately, use different equations and publish different climate zones. A single AS/NZS 4234 model serves both, so the two applications are prepared together.

	VEU (Victoria)	ESS (New South Wales)
Administrator	Essential Services Commission	IPART
Method	Activity 44	IHEAB
Certificate	VEEC	ESC
Climate zones published	Zone 4 (Melbourne and most of Victoria), Zone 5 (alpine and north-east Victoria)	Zone 3 (Sydney and coastal NSW), Zone 5 (tablelands and alpine areas)
Deemed lifetime	15 years with a new tank, 10 years reusing the existing tank	12 years
Small system factor	LoadFactor	ConfidenceFactor
Cap per installation	None	5,000 ESCs per item of end-user equipment
Portal	VEU Registry	TESSA

The three activity scenarios

What a system earns depends on what it replaces. VEU splits this into three scenarios and ESS into two activities.

Scenario	VEU	ESS	Relative certificate count
Replacing a gas water heater or boiler	44A(i)	F16	About half the electric replacement figure
Replacing electric resistance heating	44A(ii)	F16	The highest count of the three
New installation, no existing system	44A(iii)	F17	About a third to a half of the electric replacement figure

Electric resistance replacement carries the full emissions factor credit and produces the largest certificate count, but large electric water heating plant is rare in the Australian commercial market, and where one is replaced the capacity factor usually reduces the result further. Most commercial projects are new installations or gas replacements, so 44A(i) and 44A(iii) are the representative scenarios, and those sit at around a third to a half of equipment cost.

What registered systems earn

These are real figures, computed from the modelling outputs each product has published on the register. They cover systems replacing electric resistance heating, in the most populous zone of each scheme, and only systems averaging 10 kW or more per heat pump.

Total heat pump capacity	VEECs, zone 4 (median)	ESCs, zone 3 (median)
30 to 75 kW	988	2,081
75 to 150 kW	2,049	4,251
150 kW and above	3,223	5,000 (at the cap)

NSW issues roughly twice the certificate count, but a VEEC trades higher than an ESC, so a Victorian installation is currently worth around 1.4 times a NSW one. Every registered system above 150 kW hits the NSW cap of 5,000 certificates.

For a figure against your own capacity, tank volume and refrigerant, use the commercial incentive estimator.

Step 1. Design

What counts as one configuration

Everything inside the dashed boundary below forms one registered product. Change any numbered element and you have a second configuration to model and register.

#	Element	What defines it in the submission
1	Heat pump units	Model name and how many, matched exactly to the EN 14511 report and the data plate
2	Pump and flow control	Fixed flow rate, fixed outlet temperature, or fixed temperature rise, with the pump power curve
3	Pipework	Insulation thickness in mm and thermal conductivity in W/mK, for flow and return
4	Storage tanks	Model, quantity, volume, and whether they are single, parallel or in series
5	Control sensors	Sensor position and volume, set point, dead band, and the legionella cycle
6	Booster element	None, one, or two, with set point and dead band
7	Load	The Commercial Peak Load the modelling finds the system can serve

The design variables the templates cover

Each configuration is modelled from a simulation template matched to how the system is plumbed and controlled. Most commercial systems fall inside the following set.

Variable	Options covered
Tank arrangement	A single tank, a parallel tank bank, or two to six tanks in series
Flow control	Fixed flow rate, fixed outlet temperature, or fixed temperature rise across the heat pump
Heat exchange	Direct tank heating, a heat pump coil in the tank, a load-side coil, a split coil, or an integral unit
Temperature control	Single sensor or two sensor
Booster elements	None, one, or two
Set point strategy	A fixed year-round set point, or set points varied by month or season
Sanitisation cycle	None, daily, or weekly
Test data	EN 14511 or AS/NZS 5125.1

A system arranged outside this set needs a new template built and validated before its configurations can be modelled.

The eligibility floors

Through 2025 and 2026 both schemes were tightened to aim the incentive at engineered, larger scale plant. Four rules decide whether a design is worth registering at all, and they turn on averages rather than totals.

1. Average storage volume, VEU only. VEU asks for 700 L, or between 425 L and 700 L where average heat pump capacity is above 20 kW. Average storage below 425 L is not eligible for commercial VEECs at all. NSW has no equivalent floor.
2. Average heat pump capacity. Below 10 kW average, both schemes cut the certificate count hard. Average capacity is total heat pump thermal capacity divided by the number of heat pumps, so four 5 kW units are a small system even though they total 20 kW. Reading the threshold off the system total is the specific mistake the rule exists to catch.
3. The VEU LoadFactor. Below 10 kW average, VEECs are multiplied by 42 × N ÷ Commercial Peak Load, capped at 1, where N is the number of heat pumps. It applies to all three 44A scenarios. On the register today it runs as low as 0.11, so a system can earn a ninth of what its modelling alone would suggest.
4. The ESS ConfidenceFactor. Same trigger, different formula: 42 ÷ Peak Load, with no N. Because the heat pump count drops out, it cuts a multi heat pump system several times harder than the VEU version.

Preliminary modelling

Preliminary modelling runs an indicative AS/NZS 4234 simulation from data you already hold: internal or catalogue heat pump performance, a tank drawing or schematic, and your control logic. It shows how the system performs and roughly where the certificate numbers land, before you commit to laboratory testing.

It cannot be lodged with a scheme. Certificate earning results require EN 14511 data from a recognised laboratory. Its value is that it answers the go or no-go question for a few thousand dollars rather than the cost of a test round.

Step 2. Test

EN 14511 performance testing

EN 14511 is a European standard, and in these schemes it is used for one specific purpose: to build a heat pump performance map that feeds the annual AS/NZS 4234 simulation. The map defines how the heat pump performs across combinations of air temperature and water inlet temperature.

Twelve test conditions are the usual requirement. The minimum the regulators accept is the maximum inlet water temperature expected in normal operation, plus at least one of the required air points. The required air points are 2°C/1°C, 7°C/6°C, 12°C/11°C or 19°C/15°C, given as dry bulb over wet bulb. Results are linearly extrapolated down to a dry bulb of -5°C, so there is no need to test at -5°C.

These baseline matrices are starting points rather than universal requirements:

Refrigerant	Water inlet temperatures	Air temperatures (dry bulb/wet bulb)
R-290	10°C, 50°C, 70°C	2°C/1°C, 7°C/6°C, 19°C/15°C, 38°C/25°C
CO2	10°C, 30°C, 50°C	2°C/1°C, 7°C/6°C, 19°C/15°C, 38°C/25°C

The upper water inlet point should sit just below the system’s maximum rated water temperature. For an R-290 unit with a 75°C tank set point and a 5 K rise, that is 70°C. For a CO2 unit with a 90°C outlet that shuts the compressor off above 50°C inlet, it is 50°C. Adding a hot air point between 30°C and 38°C usually improves the modelled result, because capacity and COP are higher in warm ambient conditions and much of Australia operates there.

For the full treatment, see how to select EN 14511 test conditions.

In-house testing before the accredited round

In-house EN 14511 testing is useful early, to check whether the minimum performance requirement is likely to be met. Both schemes require at least 60% annual energy savings against the AS/NZS 4234 reference system, which corresponds to an annual system COP of roughly 2.5. A design that cannot reach that in-house will not reach it in an accredited laboratory.

For the application itself, third party NATA accredited or equivalent testing is required. This is currently available through Intertek China, CVC and Yukawa Laboratory.

Tank testing

Where the tanks are 700 L or less, an AS/NZS 4692.1 standing heat loss test report from an accredited laboratory is required. Above 700 L, heat loss is calculated from the drawing geometry under AS/NZS 4234 Appendix E instead, and no tank heat loss test is needed.

The tank drawing then has to state internal diameter, internal height, total internal volume, insulation thickness on wall, top and bottom, insulation material or thermal conductivity, and the height of every connection.

Step 3. Model

The AS/NZS 4234 model is a TRNSYS simulation of the whole system across a full year, in each climate zone the schemes publish. It takes the performance map from step 2 together with the physical and control description of the system, and produces the numbers the application rests on.

1. Performance mapThe EN 14511 grid is normalised into a map the simulation can interpolate across, and extrapolated down to a dry bulb of -5°C.
2. System modelTank geometry, heat loss, pipework, pump, sensors, set points, dead bands and the sanitisation cycle are assembled into the template that matches your arrangement.
3. Commercial Peak LoadThe load is increased until the system reaches its limit. The Commercial Peak Load is the largest load it can serve while still meeting minimum delivery temperature and the savings threshold.
4. Annual energy savingsModelled annual energy use against the AS/NZS 4234 reference system. Below 60%, the activity cannot be claimed at all.
5. Certificate quantitiesThe scheme equations convert the modelled outputs into VEECs and ESCs, per climate zone, for each activity scenario.

Minimum delivery temperature is usually the governing criterion rather than energy savings. AS/NZS 4234 requires delivered water at 45°C through the peak draw.

The performance map is fixed once the unit has been tested, but control settings are not, and they can be swept against the real test data right up until submission. Set points, dead bands, sensor position and volume, storage capacity, booster behaviour, tank plumbing arrangement and insulation thickness all move the result. Two registered systems of the same rated capacity earn certificate counts up to twice apart, and that gap is set by these choices.

EnergyAE confirms the Commercial Peak Load and the modelling results with you before certificate quantities are finalised, so the numbers the registration rests on are approved before anything is lodged. For more on how the results become certificates, see how commercial HPWH results become VEU and ESS certificates.

Step 4. Certify

Product certification is separate from the scheme certificates, and it is where the schedule usually slips. How much of it applies turns on one number: 700 L.

The VEU warranty condition has applied since 31 March 2025 to systems with insulated storage of 700 L or less, and the ESS equivalent since 1 December 2025. The warranty text can sit inside the installation manual rather than in a standalone document, provided it carries the five year term, Australian contact details for claims, what the consumer must do to claim and who bears the cost, and the mandatory Australian Consumer Law paragraph unaltered.

Step 5. Register

Both applications can be lodged in parallel, and one set of modelling and documentation covers them both. Portal accounts should be set up before the pack is ready. See setting up VEU and TESSA portal accounts.

1. Confirm the exact model names that will appear in the public listings. They must match across the test report, data plates, drawing, schematic, manual and declarations. Name mismatches are the most common cause of rework.
2. Lodge the VEU application through the VEU Registry, against the ESC’s Commercial and Industrial Air Source Heat Pump Water Heater Product Application Guide. A step by step walkthrough is in how to submit a HPWH application through the VEU Registry.
3. Lodge the ESS application through TESSA under the IHEAB method. See how to submit a commercial HPWH through TESSA.
4. Answer requests for information. VEU and ESS assess each application individually, so an RFI here costs more than the equivalent under SRES. Each one realistically adds weeks.
5. Get listed, then install. Approval typically takes 6 to 10 weeks where the documentation is complete and consistent.

Under VEU Activity 44 a product only has to be on the Register of Products by the time VEECs are created, not by the installation date, so installing while an application is still under assessment is technically possible. It is not worth doing. There is no guaranteed approval timeframe, and if the ESC comes back requiring changes to the model, an already installed system may not qualify as modelled.

VEECs are not backdated to the lodgement or publication date. They are eligible from the date the installation was completed, and they must be created no later than six months after the end of the year in which the activity occurred. A 2025 installation needs its VEECs created by 30 June 2026.

Documents to have ready

Model names must be consistent across every document. Send everything as searchable PDFs or clear images.

Step	Document	Notes
2	EN 14511 test report	Signed and stamped, with laboratory validity confirmation
2	AS/NZS 4692.1 heat loss report	Tanks 700 L or less only
1, 3	Tank drawing	Dimensioned, with a data table: internal diameter, volume, wall thickness, thermal conductivity, port and sensor heights, coil geometry, insulation spec
1, 3	System schematic	Heat pump, tank and pump brand and model, flow path, control valves, sensor locations, legible title block
3	Pipe insulation specification	Thickness in mm and thermal conductivity in W/mK, inlet and outlet
3	Pump power curve	Flow rate in L/min against power consumption in W
3, 5	Bill of materials	Components and quantities, for verification against the schematic
3	Control declaration	Signed statement of set point, dead band, outlet target, sensor position and volume, legionella method and frequency, long shutdown behaviour
4	AS/NZS 2712 certificate	Tanks 700 L or less only
4	Electrical safety evidence	ERAC or EESS registration and the electrical safety certificate
5	Data plates	Photos or PDFs. The heat pump model must match the EN 14511 report exactly
5	Installation manual	Brand and model names, plumbing schematic, control strategy, warranty text, legionella control consistent with the control declaration
5	Applicant company details	Legal name, ABN, address and contact for the scheme forms
5	Authorisation letter	Where the report owning company differs from the applicant: permission to use the test reports, listing all third party report numbers, signed

The full version, with what each document has to show, is in the commercial HPWH documentation checklist.

Common causes of delay

1. Model names that do not match across the test report, data plate, drawing, schematic and manual.
2. Draft or unsigned test reports, which cannot be lodged and send the project back to the laboratory.
3. Electrical safety certification started late, which then holds up the AS/NZS 2712 certificate, which then holds up the application.
4. A test matrix that is too narrow, so the performance map does not cover the water inlet temperatures the system actually operates at.
5. System definition changing after modelling: a different heat pump count, a different tank model, or control settings in the manual that contradict the control declaration.
6. A layout outside the template set, found after testing rather than during design.

Common questions

Next steps

If you are developing a commercial HPWH system and want to know how it will perform under the VEU or ESS methodology, get in touch with the heat pump model, tank sizes and control logic you have.