Understanding the NSW ESS

If you own a business in NSW then chances are you’ve had a salesman come to your office, warehouse, or shopfront in the last few years offering you “cheap LEDs” and “government rebates”.

Often times the solutions these companies are offering sound too good to be true, but the reality is there are thousands of businesses who are continuing to save money on their electricity costs since deciding to upgrade their existing lighting to LEDs.

These businesses have taken advantage of what’s known as the NSW Energy Saving Scheme (or ESS). So how exactly does the ESS work?

In a nutshell, businesses in NSW have the opportunity to generate Energy Savings Certificates “ESC” when they adopt energy savings measures.

Under the scheme, when a business upgrades their existing light fittings to energy efficient LEDs, this means they reduce their electricity consumption, thus creating ESC’s.

ESC’s are in fact a tradable commodity and like the stock market vary quite considerably dropping by as much as 50% since there opening back in 2009. When your business creates ESC’s through the Energy Saving Scheme, are then sold off to the energy retailers (think Ausgrid, Endeavour Energy, Origin Energy).

At face value, it can seem a little bit convoluted.

There are a few sets of hands this all needs to go through to achieve the end result (that being lower electricity bills). The reason for this is there is a lot required to ensure each individual project is up to the necessary standard.

The energy retailers need to be able to verify to Ipart (the NSW Government department that manages the ESS) that every project undertaken is in fact producing ESC’s, that the businesses taking part are eligible for upgrades (and haven’t already taken part in any energy saving activities under the scheme), that the products being installed have undergone rigorous testing and approval by Ipart and that the people installing the products are suitably qualified, licensed and insured, and finally that the old products are being destroyed and lamps and tubes are being disposed by means of a qualified company receiving a recycling certificate..

ACP’s are able to ensure all the required information is presented in the format required, making life easier for the energy retailers, the installers, and most importantly, the end user.

So let’s bring this into the real world: Let’s talk about Company X.

Company X is an engineering firm which operates out of a factory/warehouse in Newcastle. Their annual electricity consumption is 52,800 kilowatt-hours, and they are paying 24 cent KWH resulting in an annual electricity bill of around $12,672.

The 40 high bay light fittings, each consuming 440 watts with ballast or 52,800kw annually . Under the ESS, these fittings are to be replaced by equivalent LED high bay fittings, each consuming 110 watt.

As a result, their power consumption will drop from $12,672 annually to $3,168.

Company X has now managed to reduce their electricity consumption by over 70%.

It’s important to note that these savings don’t come for free.

The cost for Company X to purchase these new LED high bay fittings was $4,000 including cost for installation, but we haven’t yet mentioned the ESC’s that the project has created!

Well normally these light cost around $16,000 installed but the NSW Government Energy Saving Certificates are worth about $12,000 which has been deducted from the amount Company X has to pay.

In Conclusion

By upgrading to LED under the ESS Company will save $9,500 annually for an investment of $4,000 gaining a ROI of less than 6 months.

It’s a No Brainer.

Businesses all over NSW are taking up the NSW ESS. Whether your business occupies a small shopfront, a multi-storey office, or a factory/warehouse, or whether you’re a school, a club, a pub, or even a hospital, chances are you’re eligible to upgrade your existing lighting to energy efficient LED’s, resulting in huge cost savings for your business!

Future Energy Savers are well versed and equipped to assist businesses to reduce their electricity bills, and provide solutions that help to lower their electricity consumption, while taking advantage of government grants and rebates so give Ian a call on 0401-226265.

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