Heating and cooling rebates in Victoria
The richest scheme in the country, and it shrinks by $2,000 on 30 September.
What you can claim towards heating or cooling in Victoria, what the systems actually cost to run here, and the local facts that change the answer — the climate, the tariff structure and the grid.
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 $1,000 for ducted systems and multi-head splits of 10 kW or more.
This is the largest household energy incentive in Australia and it is about to get $2,000 smaller for ducted systems.
Administered by Essential Services Commission. Official scheme page. Last verified 5 September 2026.
VIC: this changes in 25 days
The minimum co-payment for ducted systems and multi-head splits of 10 kW or more rises from $1,000 to $3,000 including GST on 30 September 2026. Small non-ducted systems stay at $200.
For anyone installing a ducted system or a multi-head split of 10 kW or more, waiting until October costs $2,000 — not because the discount shrinks, but because the minimum you have to contribute goes 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 timing, covered above. From 30 September 2026 the minimum customer co-payment for ducted systems and multi-head splits of 10 kW or more goes from $1,000 to $3,000.
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 calculator and every figure recalculates.
Every state, for comparison
| State or territory | Scheme | Indicative value | Deadline |
|---|---|---|---|
| Victoria | Victorian Energy Upgrades (VEU) | $1,000–$3,500 | Changes 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
What air conditioning rebate can I get in Victoria?
Indicatively $1,000 to $3,500, through the Victorian Energy Upgrades (VEU). It is delivered as a discount on your installation invoice by an accredited provider rather than claimed back afterwards, so it has to be arranged before the work is done.
Is Melbourne a heating or a cooling climate?
1239 heating degree days against 173 cooling, so decisively a heating climate — the winter half of the year is where your money goes, and a system should be chosen on how well it heats.
How much does it cost to run a ducted system in Victoria?
About $1,450 a year for a 160 m² pre-2005 house at 27.5c per kilowatt hour, heating and cooling combined. A multi-split in the same house comes to about $1,006, but it is conditioning less of the house — that is most of the difference, not better hardware.
Would insulation save more than a new system in Victoria?
Almost certainly. Taking the same house from pre-2005 to a 6-star standard cuts heating energy to 30% and cooling energy to 60% — a bigger reduction than any system change on the market, and it applies whichever system you end up with. No scheme in Victoria pays for it, which is precisely why it gets overlooked.