Appliances for Businesses
The Installation of High Efficiency Appliances for Businesses (IHEAB) method is a calculation method under the ESS. It calculates energy savings from installing the following high efficiency equipment:
- refrigerated cabinets
- liquid chilling packages
- air conditioners
- motors powering fans and various other equipment
- boilers
- oxygen trim systems, burners or economisers on boilers or water heaters
- blowdown controls, systems and heat exchangers on boilers
- heat pump water heaters.
Equipment that you use in this method must follow the relevant performance standards. It also needs to be registered or accredited under those standards. For example:
- being a Greenhouse and Energy Minimum Standards (GEMS) or New Zealand Energy Efficiency (Energy Using Products) registered product
- meeting Minimum Energy Performance Standards (MEPS)
- meeting an Australian/New Zealand Standard
- meeting other performance requirements as applicable.
For the specific eligibility, equipment and implementation requirements for each Activity Definition in the IHEAB Method, please refer to Schedule F within the ESS Rule.
Refrigerated display cabinet, air conditioners, heat pump hot water systems and some gas activities have changed, and monthly reporting has been introduced. Changes take effect from 12 September 2025 through to 30 June 2026. See the ESS Rule change page and our ESS Reference Table for more information.
Key IHEAB requirements
Be sure you meet the following key requirements for this method to calculate energy savings.
For activities from October 2025, ACPs are required to report activities done each calendar month by the end of the following month. See the Reporting requirements page for details.
Activities from unsolicited doorknocking are not eligible. ACPs and their representatives must follow the Minimum Requirements of Conduct (Minimum Requirements) for activities under the ESS. Representatives who engage with customers are effectively the public face of the ESS. The Minimum Requirements help ensure that ACPs and their representatives act in a way that protects the interests of customers and maintains the integrity of the ESS.
Product acceptance
Heat pump water heaters must be accepted by the Scheme Administrator as meeting equipment requirements. Visit our Accepted products list page for details of accepted heat pump water heaters.
This requirement is relevant for the following activities:
- Replace old hot water boilers or heaters with air source heat pump water heaters - Activity Definition F16
- Install air source heat pump water heaters - Activity Definition F17.
See the Water Heaters page for further information on water heater equipment requirements.
Installing multiple heat pumps
You can install any single heat pump water heater on the Accepted Products List in multiples. Then use this to calculate certificates under the IHEAB method as long as the heat pumps:
- are accepted for use in Activity Definitions F16 or F17
- are each an identical model
- are joined in parallel and
- have balanced water flow.
Calculating certificates
See the IHEAB Method Guide for more details about how to calculate energy savings certificates (ESC).
From 12 September 2025, there are changes to ESC calculations with the introduction of a confidence factor. ESCs created from a single implementation of F16 and F17 will be limited to 5,000 for each system installed. A system is one standalone heat pump or multiple heat pumps manifolded together (where they are identical models joined in parallel with a balanced water flow).
Building Commission NSW advisory notes
Building Commission NSW has guidance on carrying out safe and compliant installations. Refer to the following advisory notes:
Heat pump fact sheet requirements
You must give customers a copy of the IHEAB Heat Pump Water Heater Fact Sheet before they agree to an upgrade. This is before they sign the nomination form and start the installation.
It’s good practice to keep records as evidence of providing the fact sheet.
Minimum warranty
From 1 December 2025 Activity Definitions F16 and F17 will require a minimum 5-year warranty against defects for all heat pump hot water systems with an average insulated storage volume of 700 litres or less.
- Only Refrigerated Cabinet Product Classes 12-15 with implementation dates on or after 12 September 2025 can create Energy Savings Certificates (ESCs) for new (F1.1) and replacement (F1.2) refrigerated cabinet activities.
- Refrigerated Cabinet Product Classes 1 – 11 are suspended activities until further notice and cannot be used to create ESCs.
- The minimum co-payment increased from $200 to $1,000 (excluding GST) on 12 September 2025 for all activities.
- Refrigerated cabinets with 2 or more display sides are not eligible, even if they fall into Product Classes 12-12.
Qualified licence holders are required in certain scenarios. Where electrical work is required, you must ensure that it is done by a licenced electrician. A Certificate of Compliance for Electrical Work (CCEW) must be issued and the installer included in your installer register.
Replacing or installing an air conditioner requires an electrical licence, not an air conditioning license. Air conditioning licences allow only for repairing and replacing parts. They do not allow for replacing the system.
For replacements, electrical components must meet requirements of AS/NZS 3000 which requires:
- a Type A RCD
- a local isolator
- ensuring the installation wiring meets the requirement of the system being installed.
This means a licensed electrician is required for replacing air conditioners. Not only for installations.
A Certificate of Compliance for Electrical Work must be provided to the customer and Building Commission NSW.
Air conditioner lifetimes increased from 10 to 12 years from 12 September 2025.
The minimum co-payment increased from $200 to $1,000 (excluding GST) for activities on or after 12 September 2025. This minimum cost applies:
- per item of equipment
- when installing a refrigerated cabinet under Activity F1.1 and F1.2
- when installing a heat pump water heater under Activity F16 and F17.
Note: a heat pump water heater system comprising multiple heat pump water heaters joined by a manifold is considered one item.
ACPs must arrange to complete a Site Assessment Report for each implementation of Activity Definitions F4 and F8–F17. ACPs may use the template below or create their own report.
As an ACP, you need to arrange for the installer to complete an Installer Declaration when implementing some activities. See the IHEAB Method Guide for details. ACPs may use the template below or create their own declaration.
When installing a replacement refrigerated cabinet, the new one must be the same Product Class as the old one. Installers must declare that this is the case. ACPs are responsible for their installers being trained to identify different product classes.
The specific Activity Definitions in the ESS Rule outline the Product Class for different types of refrigerated cabinets.