Renewable Energy

Complete Guide to Energy Saving Scheme (ESS) for Businesses

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11 months ago

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New South Wales (NSW) is shifting to a new energy system that is clean, affordable, and dependable. Between 2009 and 2022, a program has helped projects that are expected to save 48,000 gigawatt hours (GWh) of energy by 2033.  

This program will cut greenhouse gas emissions for households and businesses by 35 to 40 megatonnes by 2024, which is about the same as the emissions from NSW’s transport sector in 2022. 

The Energy Savings Scheme (ESS) for businesses provides financial rewards to update their equipment and processes to use energy more efficiently.  

The Energy Savings Scheme (ESS) aims to help NSW households and businesses reduce energy costs by providing financial incentives to install energy-saving equipment and appliances. 

Under the ESS guidelines, specific approved energy-saving actions are listed for suppliers to help them create energy savings certificates (ESC) needed to meet energy-saving goals. These actions are regularly updated to keep the program current and effective.

Energy Savings Scheme (ESS) NSW For Businesses

The Energy Savings Scheme offers financial rewards to NSW businesses that upgrade equipment or processes to use less energy.  

What to Expect?

Incentive payments vary based on the project. 

Who is This For?

NSW-based businesses. 

Overview

The Energy Savings Scheme (ESS) helps NSW businesses by providing financial incentives to invest in projects that reduce energy use. Incentives can be used for new equipment or to improve existing systems. 

Eligible equipment and systems include: 

  • lighting 
  • motors, fans, and pumps 
  • compressed air systems 
  • refrigeration 
  • hot water and steam systems 
  • furnaces 
  • batteries added to solar systems. 

All work must be done with a government-approved supplier, called an Accredited Certificate Provider (ACP), who will guide you through the process and help secure the incentive. 

Eligibility Requirements

Your business must be located in NSW to qualify. 

Benefits of Participating in the Energy Savings Scheme (ESS) for Businesses

Lower Energy Bills:

By using energy-saving technologies like LED lighting, efficient HVAC systems, and commercial solar panels, businesses can significantly cut down their energy costs. These savings help improve financial stability and free up funds for other investments.  

Better Brand Image:

In today’s eco-conscious market, companies involved in ESS are often viewed as environmentally responsible, which can enhance their reputation. This positive image attracts more customers, especially those who value sustainability and building brand loyalty. 

Improved Competitiveness:

Lower energy costs mean businesses can offer more competitive pricing or reinvest in areas like product development, marketing, or customer service. This can be a key advantage in highly competitive markets.  

Compliance and Financial Support:

Participating in the ESS helps businesses stay aligned with environmental regulations, potentially avoiding fines. Additionally, government incentives make it easier and more affordable for businesses to implement energy-saving measures. 

Steps to Join the ESS

Initial Assessment: Start with an energy audit to understand how energy is currently used and identify areas for improvement. This provides a baseline for measuring the success of any upgrades. 

Identify Opportunities: Use the audit results to identify the best energy-saving projects with a good return on investment, such as switching to LED lighting or upgrading equipment. 

Implement Projects: With a plan in place, install new technology, improve existing systems, or change practices to save energy. 

Claim Incentives: After completing projects, apply for ESS incentives to help cover costs, making it more affordable and shortening the payback time. 

Tips for Getting the Most Out of the ESS

Conduct Detailed Energy Audits:

Understand current energy usage and waste through an energy audit. This helps identify areas with the most significant potential savings, ensuring that investments are focused where they make the most impact. 

Consult with Energy Experts:

Experts can simplify the ESS process, from the audit to project implementation, helping you choose the best projects, meet ESS requirements, and maximise incentives. 

Make Energy Efficiency Part of Your Strategy:

Align energy-saving projects with your business goals, whether financial, environmental, or market-focused. A strategic approach makes energy efficiency a core part of business growth, competitiveness, and sustainability. 

The Latest Energy Savings Scheme Rule

The most recent Energy Savings Scheme (ESS) Rule was released on May 24, 2024, and became effective on June 19, 2024.  

This new rule includes a transition period allowing ESCs (Energy Savings Certificates) to be created using the previous ESS Rule.  

Until June 19, 2024, the 2022 ESS Rule was in use. Key updates in the new rule include: 

  • Removing incentives for new refrigerated cabinet activities. 
  • Changing incentives for refrigerated cabinets by lowering savings estimates and eliminating support for 4-sided display cabinets. 
  • Aligning high-efficiency pool pump operations with the Peak Demand Reduction Scheme (PDRS). 
  • Updating the method for calculating energy savings from commercial air conditioners. 
  • Developing new baselines and calculations to better capture actual energy savings from hot water systems used in homes and small businesses. 
  • Implementing administrative changes to improve program management. 

Main Factors Affecting Business Electricity Prices| Understanding Business Electricity Prices

Understanding business electricity costs is key to controlling expenses. Unlike set residential rates, business electricity prices are custom-made to fit each company’s specific energy needs and patterns.  

This tailored approach comes with both challenges and opportunities, requiring businesses to manage their electricity expenses closely.  

Location:

Where your business is significantly located impacts electricity prices. Rates vary between states and even within regions of a state due to differences in energy resources and regulations.  

Areas with more natural resources or competitive energy markets may offer lower rates, while locations with fewer resources or stricter rules may have higher rates. 

Usage Patterns:

How your business uses electricity also affects prices. Providers often offer better rates to companies with steady energy use, as it’s easier to supply them efficiently.  

However, businesses with inconsistent energy needs might face higher costs due to the challenges of meeting unpredictable demands. 

Market Conditions:

Energy prices change based on global and local factors, such as supply and demand, international events, and even the weather. Knowing these factors can help businesses predict and manage potential cost changes. 

Ways to Manage and Reduce Business Electricity Costs

Understand Your Energy Use:

Start by analysing when and how your business uses electricity. By identifying peak times and energy-heavy activities, you can adjust operations to save money. 

Negotiate Better Rates:

Use knowledge of your energy needs to negotiate with suppliers for rates that match your business’s consumption patterns. Comparing multiple suppliers can also help you secure the best deal. 

Consider Fixed-Rate Contracts:

Fixed-rate contracts allow businesses to lock in a steady rate over a set time, protecting against sudden price increases and simplifying budgeting. 

Use Time-of-Use Rates:

By shifting energy-heavy tasks to off-peak hours, when rates are lower, businesses can save on electricity costs without affecting productivity. 

Follow Market Trends:

Staying updated on energy market trends helps you anticipate price shifts and adjust strategies, like exploring new technologies or renegotiating contracts, to lower costs.

How Cyanergy Can Help Businesses Get the Best Electricity Prices

Cyanergy supports businesses in managing energy costs through expert guidance and tailored energy solutions. 

Custom Energy Solutions:

We create energy plans that suit each business’s specific needs, helping companies of all sizes save energy and reduce costs. 

Negotiation:

Our team uses their market knowledge to negotiate with suppliers on your behalf, ensuring you get the best terms possible and saving you time and money. 

Market Insights:

We keep you informed on energy market trends and provide insights to help you make the best energy-buying choices, from timing contract renewals to switching suppliers at optimal times. 

Frequently Asked Questions (FAQs) for Energy Savings Scheme NSW For Businesses

What is an Energy Savings Certificate (ESC)?

An ESC is a certificate that represents one megawatt-hour (MWh) of energy saved by carrying out approved energy-saving activities in NSW. 

The Independent Pricing and Regulatory Tribunal (IPART) has guidelines for calculating the number of ESCs an upgrade can earn. 

Businesses and organisations that participate in the scheme must get and submit ESCs to IPART to meet their energy savings obligations under the ESS.  

Which Activities Qualify for ESCs in the ESS?

There are several ways to save energy in the commercial and industrial sectors of NSW. 

For Small Business: 

  • Upgrading pool pumps 

For Commercial and Industrial: 

  • Upgrading commercial and public lighting 
  • Installing high-efficiency appliances (like HVAC systems and refrigerators) 
  • Upgrading industrial equipment and processes 

How Much Can Customers Save on Upgrades with ESCs?

The energy savings from each type of activity are calculated using formulas that compare the energy usage of the old, less efficient equipment with that of the new, efficient equipment. The more significant the difference, the more ESCs the upgrade will earn. 

For example, replacing an electric hot water system with a high-efficiency heat pump water heater could earn up to 45 ESCs.  

A split-system air conditioner upgrade might qualify for around 11 ESCs, while installing a high-efficiency refrigerated display cabinet in a small business could generate even more ESCs due to higher energy savings. 

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