Who is Eligible For VIC Government Hot Water System Replacement Rebates?
Sustainability Victoria published its State of Sustainability Report 2024 in November 2024.
In this survey, 95% of Victorian households said they are considering switching from gas to electric and 48% were aware of high greenhouse gases (GHG) emission intensity of natural gas appliances. Cost of living ranked #1 on the top three priority issues for Victorians.
Switching from gas and energy-inefficient resistive electric water heating appliances to heat pump powered water is one of the definitive solutions to tackle all three issues:
Cost of living
High GHG emission intensity
And transitioning away from fossil fuels.
Almost every second Victorian homeowner or business owner that calls us up to get a hot water upgrade asks the first question: “Am I eligible to get rebates for getting my old water heater replaced with an energy-efficient water heating unit?”
On most web portals, you’d find just two conditions to get the hot water rebates:
You must be a household/business located in Victoria state.
You should not have applied for the rebates before.
While these two conditions are essential for the rebates under the state government-run Victorian Energy Upgrades Program (VEU), there are other criteria that Victorians must meet to receive the VEU program rebates for replacement of old water unit with a new heat pump water heater or installation of a new heat pump based water heater (without any decommissioning of an old water heater and replacement).
Rebate eligibility conditions for residential heat pump installations and commercial heat pump installations are different. We’ll first cover the residential eligibility conditions for hot water rebates under the VEU program.
Which households are eligible for rebates under the VEU program?
Before discussing the eligibility conditions for households in Victoria state, it is important to know how the upgrades are carried out, and who is licensed to install the air-source heat pumps under the VEU scheme?
The VEU program was formulated under the VEET Act, 2007 and its regulations, specifications, and guidelines are listed in Victorian Energy Efficiency Target (VEET) regulations 2018, Victorian Energy Upgrades Specifications 2018, and Victorian Energy Efficiency Target Guidelines (VEET Guidelines).
The VEET regulations, VEU Specifications and VEET Guidelines have detailed guidelines, regulations, and specifications for the hot water upgrades, which includes:
Code of Conduct for installers and accredited businesses (businesses that are authorised to carry out the hot water upgrades under the VEU program). Code of Conduct is listed under Schedule 6 of the VEET regulations.
Heat pump water heater performance, energy efficiency requirements.
Eligibility conditions for households and maximum heat pump units that can be installed in residential premises.
Licensing of installers.
Pre-installation requirements
Guidelines for decommissioning of existing water heating units.
Installation guidelines and requirements for installing a new heat pump unit.
Record-keeping requirement for accredited businesses.
Before the upgrade/replacement, a Victorian homeowner has to sign a VEEC assignment form. This assignment of energy certificate rights enables the VEU accredited businesses to offer discounts/rebates on heat pump hot water units to Victorian residents.
The assignment of Victorian Energy Efficiency Certificates rights is done through VEEC assignment forms. One energy certificate represents abatement/avoidance of 1 ton of carbon dioxide (a GHG) equivalent. After assignment of VEEC rights and creation of VEECs, an accredited business can sell them to an energy utility company and offer rebates/discounts on installation and product in return for the assignment of the VEEC rights.
Accredited businesses must ensure that all personal information collected on the VEEC assignment form is held in accordance with the Information Privacy Principles under the Privacy and Data Protection Act 2014 (Vic) (PDP Act).
An accredited business (such as iPromise Australia) gets entitled to receive carbon credits — in the form of Victorian Energy Efficiency Certificates or VEECs — for every time it upgrades/replaces an old water heating appliance with an energy-saving heat pump water heater.
The accredited business gets entitled to VEECs only if the business has met the VEET regulations, VEU Specifications and VEET Guidelines.
Residential hot water upgrades are done under the following activity codes of the Victorian Energy Upgrades Program.
Activity 1C: Get a resistive electric heater replaced with a grid electricity-boosted solar water heater. The new solar water heater should be certified by an accredited body as complying with AS/NZS 2712 Standard, and it should not have a water storage tank of volume bigger than 700 litres. The new water heater should achieve greater than or equal to 60 percent annual energy savings, as determined in AS/NZS 4234:2021 standard. The new solar water heater must be listed in the VEU Register of Products at the time of VEEC creation. The existing resistive water heater must be connected to an electricity supply before it is decommissioned.
Activity 1D: Get a resistive electric heater replaced with an energy-efficient electric air source heat pump powered water heater. The new air source heat pump water heater should be certified by an accredited body as complying with AS/NZS 2712 Standard. It should have a water storage tank that is insulated and not bigger than 700 litres and a refrigerant that is less than 700 global warming potential (GWP). The existing resistive water heater must be connected to an electricity supply before it is decommissioned. The new water heater should achieve greater than or equal to 60 percent annual energy savings, as determined in AS/NZS 4234:2021 Standard. The air source heat pump should be covered by a warranty against defects for a period of at least 5 years from the day of installation.
Activity 3C: Get an LPG/natural gas-fired water heater replaced with an energy-efficient electric air source heat pump powered water heater. The rest conditions under Activity 3C are the same as Activity 1D.
Activity 3D: Get an LPG/natural gas-fired water heater replaced with a grid electricity boosted solar water heater. The rest conditions under Activity 3D are the same as Activity 1C.
In addition to meeting the VEET regulations, VEU Specifications and VEET Guidelines, the accredited businesses will only be eligible for energy certificates if they carry out the upgrades in accordance with the relevant provisions of the Australian Consumer Law (ACL), Electricity Safety Act 1998, Gas Safety Act 1997 and the Occupational Health and Safety Act, 2004.
Eligible residential premises & max installation limit
Residential property where hot water upgrades are planned under the VEU program should not be constructed within two years from the date of installation. That is, residential property must be at least two years old. Maximum 2 installations per residential property can be carried out.
Pre-installation requirements.
After a homeowner agrees to the rebates/discounts offered by the accredited business, the accredited business must:
Share a copy of VEU Water Heating Consumer Fact sheet with the homeowner.
Share clear and accurate information about suitability of new water heater with respect to meeting water needs of the homeowner and location of installation.
Advise the homeowner about the size-suitability of the new water heating unit in accordance with the VEU Water Heating Consumer Fact sheet.
Post-installation
After the installation is complete, the accredited business will have to provide the following documents to the homeowner:
Tax invoice/proof of purchase.
Energy certificate (VEEC) assignment form.
VBA compliance certificate.
Electrical Safety compliance certificate.
OEM (Original Equipment Manufacturer) manual/instruction and warranty
Information listed in VEU Code of Conduct (including dispute resolution contact details, manufacturer’s instructions, contact details of the accredited business and/or installer).
A minimum 5-year warranty against defects document.
Marketing and lead generation guidelines for accredited businesses.
Marketing and lead generation campaigns of the accredited business must adhere to relevant laws which includes:
Schedule 6 of VEET regulations (provisions of code of conduct)
Australian Consumer Laws
Telecommunications (Telemarketing and Research Calls) Industry Standard 2017
Spam Act 2003 and Spam regulations 2021 (for email and SMS text campaigns)