The paper presents the development of a downscaled hardware-in-the-loop (HiL) setup for a wave energy converter heaving point absorber. HiL simulation involves the buoy motion coupled to a gearbox system that converts the buoy’s vertical movement into rotational. The dynamic movement of the heaving buoy is simulated and converted into rotation. A process is employed to determine the resultant torque based on the generator’s rotational speed. The use of an online derivative technique allows the system to implement an inertia emulation. Consequently, without modifying physical components, it is possible to change the system dimension. The demanded torque is then applied using an electric machine torque control loop. The technique is developed for real-time implementation and allows the reproduction of different wave conditions. Froude’s law is used to determine the scale down factor considering the machine limitations and the wave conditions. Experimental results validate the methodology.