Registering Commercial HPWHs for VEU (VEECs) and ESS (ESCs): 2026 Guide
The Victorian Energy Upgrades (VEU) and NSW Energy Savings Scheme (ESS) have evolved significantly since commercial heat pump water heater (HPWH) activities were first introduced.
VEU Activity 44 and ESS IHEAB schemes are now directly focused on incentivising larger-scale commercial HPWH systems, not residential systems installed in light-commercial settings. Scheme registrations are based on unique system configurations, so the heat pump, thermal storage, plumbing, auxiliary boosting, and control settings all matter.
The incentives are still strong for eligible systems, with certificate returns covering up to 60% of equipment cost.
This guide covers current system eligibility rules, EN 14511 testing, documentation, modelling, and the application process for commercial HPWH registrations.
Latest rules for system eligibility
Through 2025 and 2026, VEU and ESS regulations have been adjusted to focus the program more squarely on engineered, larger-scale systems.
VEU now includes a minimum average storage volume requirement of 700 L, or 425 to 700 L where average heat pump capacity exceeds 20 kW. The VEU LoadFactor substantially reduces VEECs for systems below 10 kW, while the ESS ConfidenceFactor applies a similar reduction for smaller systems.
In practice, these changes largely remove any commercial incentive for smaller systems to apply for the commercial activities.
Scheme regulators have also increased requirements on warranties and co-payments to improve the quality of installations delivered under the schemes.
Steps to apply for the schemes
A typical commercial HPWH registration starts by defining the intended system range. This includes the heat pump model or models, compatible tank models, storage volumes, plumbing arrangements, and any auxiliary boosting.
Once the system range is clear, the manufacturer arranges third-party EN 14511 testing and compiles the documentation needed for modelling. EnergyAE then prepares the system energy modelling and supporting reports before the application is submitted through the VEU and ESS portals.
EN 14511 testing
EN 14511 testing forms the foundation of commercial heat pump performance modelling. Selecting test conditions that reflect expected operating conditions is important, as these directly influence modelled system performance and resulting certificate outcomes.
In-house testing to EN 14511 is useful in the early stages of a product to check whether minimum performance requirements are likely to be met. As a practical target, systems usually need at least 60% energy savings, which corresponds to an annual system COP of approximately 2.5.
For the final application, third-party NATA-accredited or equivalent testing is required. This testing is currently available through Intertek China, CVC, and Yukawa Laboratory.
For detailed guidance on selecting air and inlet water temperatures, see our EN 14511 test conditions guide.
Initial documentation required
Accurate testing and documentation is extremely important for commercial HPWH projects, as inconsistencies or errors are a common cause of delays.
EnergyAE needs the EN 14511 heat pump performance test report, the system schematic, tank drawings, and pipework insulation specifications before energy modelling can begin. The schematic should show storage tanks, heat pump units, plumbing configuration, and any auxiliary boosting.
For tanks below 700 L, EnergyAE also needs the AS/NZS 2712 certificate and AS/NZS 4692 tank heat loss test report.
Modelling for R&D and performance optimisation
EnergyAE compiles the relevant system parameters to produce a TRNSYS model of your system. This model can be used to optimise system design before the final application is locked in.
The modelling can assess the impact of control settings, set points, dead-bands, sensor positions, storage capacity, auxiliary boosting, tank plumbing configuration, EN 14511 test condition selection, and tank insulation thickness. Careful analysis at this stage can materially improve system performance and certificate returns.
Once the design is finalised, compliant AS/NZS 4234 modelling reports are produced for the final application.
Application process
Final application requirements are defined by each scheme and must align with the latest guidance from the ESC and IPART.
Once submitted, applications are reviewed by the scheme administrators. Approval is typically achieved within 6 to 8 weeks where documentation is complete and consistent.
Next steps
If you are developing a commercial HPWH system and want to understand how it will perform under the VEU or ESS methodology, get in touch with EnergyAE to discuss your project.