Heating and cooling rebates in Victoria
The richest scheme in the country, with a $2,000 higher ducted co-payment from 30 September 2026.
The short answer is the Victorian Energy Upgrades program, the most valuable household energy incentive in Australia — though from 30 September 2026 the minimum you must contribute towards a ducted system is $2,000 higher than it was. Below: what the program pays, why replacing ducted gas earns several times what a new install does, and what the systems actually cost to run in Melbourne.
What you can claim in Victoria
Victorian Energy Upgrades (VEU)
Up to about $3,500 replacing ducted gas heating with reverse cycle, applied as a discount at installation — indicatively $1,000 to $3,500.
- Calculated on the energy the upgrade saves, not on what you buy, so replacing ducted gas gives far more than a new split in a house that had nothing.
- Delivered as an upfront discount by an accredited provider — there is nothing to claim back.
- A minimum customer co-payment applies: $200 for small non-ducted systems, and $3,000 including GST for ducted systems and multi-head splits of 10 kW or more — up from $1,000 before 30 September 2026.
This is still the largest household energy incentive in Australia, but from 30 September 2026 a ducted system needs $2,000 more of your own money than it did.
Administered by Essential Services Commission. Official scheme page. Last verified 5 September 2026.
VIC: changed on 30 September 2026
From 30 September 2026 the minimum co-payment for ducted systems and multi-head splits of 10 kW or more is $3,000 including GST, up from $1,000. Small non-ducted systems stay at $200.
For a ducted system or a multi-head split of 10 kW or more, that is $2,000 more of your own money than before — not because the discount shrank, but because the minimum you have to contribute went up by that much.
Victorian Energy Upgrades (VEU), effective 30/09/2026. Verified 5 September 2026 — confirm with an accredited provider before relying on it.
Why Victoria is different
Victoria has the most valuable household energy incentive in Australia. The Victorian Energy Upgrades program pays up to about $3,500 for replacing ducted gas heating with reverse cycle, delivered as an upfront discount by an accredited provider.
It is calculated on the energy the upgrade saves, which is why replacing ducted gas earns so much more than a new install. A gas ducted system in a pre-2005 Melbourne house is one of the largest single energy loads in Australian housing, and removing it generates a lot of certificates.
Victoria is also the state where the switch makes the most sense on its own merits. Melbourne has 1,239 heating degree days — more than any mainland capital except Canberra — so the heating bill dominates, and reverse cycle beats ducted gas comfortably on running cost.
The catch is the co-payment, covered above. From 30 September 2026 the minimum customer co-payment for ducted systems and multi-head splits of 10 kW or more is $3,000, up from $1,000.
What it costs to heat and cool a house here
A 160 m² house built before 2005, heated and cooled for a full year at Victoria's reference rates. On these assumptions the cheapest option in Victoria is single split system at about $444 a year — though read the conditions column, because it is not conditioning the same amount of house as the ones below it.
| System | Conditions | Per year | Installed | 10-year total |
|---|---|---|---|---|
| Single split system | One main living area | $444 | $2,600 | $7,037 |
| Multi-split system | Most of the house | $1,006 | $8,500 | $18,563 |
| Ducted reverse cycle | The whole house | $1,450 | $15,500 | $30,005 |
| Ceiling fans | Cools only — you would still need something for winter. | |||
| Ducted evaporative cooling | Cools only — you would still need something for winter. | |||
| Gas space heater | Heats only — you would still need something for summer. | |||
| Electric panel or fan heater | Heats only — you would still need something for summer. | |||
| Ducted gas heating | Heats only — you would still need something for summer. |
A 160 m² pre-2005 house in Victoria — 1,239 heating and 173 cooling degree days — at 27.5c/kWh, heating and cooling for a full year. Read the conditions column: the cheap options are partly cheap because they condition less of the house.
Your own house will differ. Put your floor area, insulation and rates into the heating and cooling cost calculator and every figure recalculates.
Every state, for comparison
| State or territory | Scheme | Indicative value | Changes |
|---|---|---|---|
| Victoria | Victorian Energy Upgrades (VEU) | $1,000–$3,500 | Co-payment rose 30/09/2026 |
| New South Wales | Energy Savings Scheme (ESS) | $200–$2,600 | — |
| Australian Capital Territory | Home Energy Support Program | $0–$2,500 | — |
| South Australia | Retailer Energy Productivity Scheme (REPS) | $300–$1,500 | — |
| Queensland | Climate Smart Energy Savers | $0–$1,000 | — |
| Western Australia | no state scheme | — | — |
| Tasmania | no state scheme | — | — |
| Northern Territory | no state scheme | — | — |
There is no federal rebate for heating or cooling. Small-scale Technology Certificates apply to water heaters and solar panels only, so unlike a hot water upgrade there is no national floor — what you get depends entirely on your state. Every figure is indicative and delivered as a discount by an accredited installer rather than claimed back. Last verified 5 September 2026.
Frequently asked questions
Is the Victorian rebate really worth $3,500?
Up to that much, for replacing ducted gas heating with reverse cycle — it is calculated on the energy the upgrade saves, so swapping out an old gas system earns far more than fitting a split into a house that had nothing. The catch: from 30 September 2026 the minimum you contribute for a ducted system is $3,000, up from $1,000, so a ducted install costs you $2,000 more than it did before that date.
Why does Melbourne lean so hard on heating?
1239 heating degree days against just 173 for cooling — more winter load than any mainland capital bar Canberra. A system bought for Melbourne should be judged on how it heats first.
What's the running cost of a ducted system in Melbourne?
Roughly $1,450 a year for a 160 m² pre-2005 house at 27.5c per kilowatt hour. A multi-split handling less of the house comes in around $1,006 — cheaper mostly because it is conditioning a smaller footprint, not because it is inherently more efficient.
Would insulation matter more than the rebate in Victoria?
It is close either way, but insulation is the one upgrade that helps regardless of which system you choose — taking a pre-2005 house to 6-star cuts heating energy to 30% of its starting point and cooling to 60%. No Victorian scheme currently pays for it, rebate or not.