The NSW Energy Savings Scheme evolves constantly. Every year brings methodology updates, new activities, and changed baselines. Here’s what’s relevant for commercial LED lighting in 2026.

Quick Background

The ESS creates tradeable Energy Savings Certificates (ESCs) for energy efficiency activities. Lighting upgrades have been a major source of certificates since the scheme began.

An Accredited Certificate Provider (ACP) handles the paperwork and trading. Building owners receive an upfront payment—effectively a rebate—for qualifying upgrades.

If you’ve done commercial LED projects in NSW, you’ve probably worked with this scheme.

The 2026 Methodology Changes

The Independent Pricing and Regulatory Tribunal (IPART) makes annual rule changes. Here’s what matters for lighting in 2026:

Baseline Adjustments

The scheme calculates savings against a baseline—what would have been installed anyway. As LED becomes standard, baselines shift.

Commercial office lighting baseline now assumes LED panels rather than fluorescent tubes for new installations. This means retrofit-to-retrofit calculations are becoming relevant. Upgrading old LED to new LED generates fewer certificates than upgrading fluorescent to LED used to.

High bay industrial lighting still has fluorescent and HID baselines for retrofits, but the multipliers have reduced. The days of large certificate volumes from warehouse upgrades are waning.

Activity Changes

New activity: Lighting controls (standalone sensors, dimming systems) now have improved certificate creation pathways. The scheme is recognising that controls add savings beyond the fittings themselves.

Changed activity: Tunable white lighting in eligible sectors (aged care, healthcare) can claim additional certificates for circadian lighting benefits. This is new and reflects the evidence base around human-centric lighting.

Documentation Requirements

IPART has tightened evidence requirements for larger projects:

Pre-installation photos: More specific requirements for photographic evidence of existing conditions. Generic photos won’t pass audit.

Operating hours verification: For projects claiming high operating hours (which generates more certificates), you’ll need supporting evidence—BMS data, access logs, or similar.

Commissioning documentation: Controls projects need commissioning evidence showing the system is actually functioning as specified.

What This Means for Project Economics

The bottom line: commercial lighting certificates are worth less than they were five years ago. The scheme is maturing and savings opportunities are diminishing.

Typical 2021 project (fluorescent to LED): Large certificate volumes, significant rebate, often covered 40-50% of project cost.

Typical 2026 project (same scope): Smaller certificate volumes, reduced rebate, might cover 20-30% of project cost.

This doesn’t mean the scheme is useless. It still provides meaningful contribution to project economics. But the days of massive ESS windfalls are behind us.

Controls: The New Opportunity

If fittings are generating fewer certificates, controls are generating more.

A lighting controls upgrade can now create meaningful certificate volumes:

• Occupancy sensing across a floor plate
• Daylight dimming near perimeter zones
• Scheduling systems for after-hours reduction
• Integrated control platforms

The certificate value for a well-designed controls retrofit can approach or exceed a basic fitting retrofit in some cases.

This is relevant for buildings that did fitting-only LED upgrades years ago and now want to add controls. The ESS can help fund the controls upgrade.

Working With Accredited Certificate Providers

The ACP relationship matters more as the scheme gets more complex.

What good ACPs provide:

• Accurate pre-assessment of expected certificate volumes
• Assistance with documentation requirements
• Timely processing (certificates have value, and delays cost money)
• Fair pricing for certificate purchase

Red flags:

• Wildly optimistic certificate estimates that don’t materialise
• Requests for incomplete or questionable documentation
• Long delays between project completion and payment
• Prices significantly below market

Get quotes from multiple ACPs. Volumes and pricing vary.

Combining ESS With Other Incentives

NSW ESS can stack with some other programs:

Federal programs: ARENA and CEFC funding can combine with ESS in some circumstances, though double-dipping rules apply.

Local government programs: Some councils have additional energy efficiency incentives.

Utility programs: Ausgrid and Endeavour Energy occasionally have complementary programs.

It’s worth checking what’s available. The landscape changes regularly.

Documentation Tips

Based on audits I’ve seen fail:

Take proper photos: Include clear shots of the installation environment, not just close-ups of fittings. Date-stamped if possible.

Keep everything: Purchase orders, invoices, delivery receipts, commissioning sheets. ACPs need paper trails.

Operating hours: If you’re claiming high hours, have evidence ready. BMS logs are ideal.

Product specifications: Ensure you can document the actual products installed, not just generic categories.

The Bigger Picture

ESS is one funding source among several. A well-structured commercial lighting project might combine:

• ESS certificates
• Operational savings from reduced electricity consumption
• Reduced maintenance costs (LED lasts longer)
• Productivity benefits (better light quality)
• Sustainability credentials (NABERS, Green Star)

The ESS contribution is declining as a proportion of total value, but it remains worth capturing.

Getting Started

If you’re planning a NSW commercial lighting project in 2026:

1. Get an ACP assessment early: Understand the likely certificate value before finalising project scope.

2. Consider controls: Even if you’ve already done LED fittings, controls might generate meaningful certificates.

3. Document thoroughly: Assume your project will be audited and prepare accordingly.

4. Compare ACP offers: Get at least three quotes on certificate pricing.

5. Integrate with project planning: ESS requirements (like pre-installation evidence) need to be in your project timeline.

The scheme rewards energy efficiency. Good LED projects still qualify. But the easy wins are mostly captured, and the remaining opportunities require more sophistication.

James Thornton has been working in commercial lighting for 18 years and is based in Australia.