Victorian Heat Pump Hot Water Rebate 2026: The Complete Guide

⚠️ Important: Income Eligibility Is Changing on 1 July 2026 From 1 July 2026, the combined household income limit for the Solar Victoria Hot Water Rebate drops from $210,000 to $150,000 per year. If your household income is between $150,000 and $210,000, you must submit your application IN FULL — including all documents — by 5pm on 30 June 2026 to secure a rebate under the current limit. Saved applications and applications that time out will not be considered. You must click ‘Submit’ in the Service Victoria portal. Source: solar.vic.gov.au/hot-water-rebate (updated 2 June 2026)

Introduction: Why Upgrading Your Hot Water System in 2026 Makes Sense

Heating water is one of the largest single energy expenses in a Victorian home. According to the Victorian Government’s own data, hot water accounts for 15% to 30% of household energy use. For commercial buildings, this figure climbs as high as 36%.

Despite being such a significant cost driver, most Victorian households are still running old electric resistance or gas storage systems — the two least efficient technologies available. A heat pump hot water system uses ambient air to generate heat rather than burning gas or using a resistive heating element, delivering the same reliable hot water for a fraction of the energy.

In 2026, Victorian homeowners can access multiple stackable government rebate programs to reduce the upfront cost of upgrading to an efficient heat pump or solar hot water system. This guide explains exactly how each program works, who is eligible, what has changed in 2026, and how Climate Green can help Melbourne and Victorian households access every dollar they are entitled to.

“Switching from gas to an efficient electric hot water system can save households around $400 a year on energy bills.” — Victorian Government, energy.vic.gov.au

What Programs Are Available? The Three Stackable Rebates

Victorian homeowners can potentially access three separate programs that can be stacked together to maximise their upfront saving. Each operates independently, is administered by a different government body, and has its own eligibility requirements.

Program	Who Administers	Amount	Key Requirement
Solar Victoria Hot Water Rebate	Solar Victoria (State Govt)	Up to $1,000 (Up to $1,400 for locally-made products)	Owner-occupier; income under $150,000/yr from 1 July 2026; pre-approval required
Victorian Energy Upgrades (VEU) Discount	Essential Services Commission (ESC)	$560 – $910 upfront (indicative; varies with VEEC market price)	Victoria; property 2+ years old; replacing inefficient electric or gas system; min. $200 customer contribution
Federal Small-scale Technology Certificates (STCs)	Clean Energy Regulator (Federal Govt)	Approx. $300 – $600 depending on system size and location zone	CEC-approved product; applied by installer at point of sale
Combined Maximum Saving	All three stacked	Up to $2,030 (locally-made) or up to $1,630 (other eligible products)*	*Solar Victoria figure for combined Solar Victoria + VEU only. STCs are additional.

Source: solar.vic.gov.au/hot-water-rebate and energy.vic.gov.au/victorian-energy-upgrades/products/hot-water-system-discounts (accessed June 2026)

Understanding how these three programs work together is key to maximising your saving. Climate Green’s team will confirm which programs apply to your specific property and circumstances before any work begins.

Program 1: The Solar Victoria Hot Water Rebate

The Solar Victoria Hot Water Rebate is part of the Solar Homes Program, administered directly by Solar Victoria — a statutory authority of the Victorian Government.

How Much Is the Rebate?

Up to $1,000 for eligible heat pump or solar hot water systems
Up to $1,400 for products eligible under the Locally Made Incentive (products manufactured or assembled with at least 50% locally made parts in Australia)

The rebate is calculated as 50% of the purchase price of the hot water product, after all other discounts — including VEU and STC discounts — have already been applied. This means the Solar Victoria rebate is calculated last, on the net product price.

Who Is Eligible?

To be eligible for the Solar Victoria Hot Water Rebate, you must meet all of the following criteria as set out on solar.vic.gov.au:

You are the owner-occupier of the property where the system is to be installed
The combined taxable income of all property owners is less than $210,000 per year — reducing to $150,000 per year from 1 July 2026
The property value is under $3 million
The property has not previously received a hot water rebate or solar battery rebate under the Solar Homes Program
The existing hot water system being replaced is at least 3 years old from its date of purchase
You use an authorised hot water retailer listed on the Solar Victoria website
The product installed appears on Solar Victoria’s approved product list

Owner-occupiers who previously received a Solar Homes rebate and have since moved house may apply for a new rebate at their new address, provided that address has not previously received these rebates. Source: solar.vic.gov.au

Locally Made Incentive — Higher Rebate of Up to $1,400

From 1 July 2025, the Victorian Government introduced a higher rebate of up to $1,400 for households choosing an eligible locally made hot water product. This incentive supports local manufacturing jobs and aligns with the Victorian Government’s Local Jobs First policy.

‘Locally made’ under this program does not require 100% Australian manufacture. Products qualify if at least 50% of their parts are locally made or assembled. Eligible brands currently on the Solar Victoria locally made list include Dux, Earthworker Energy, Everhot, Neopower, Panasonic Australia, Reclaim Energy, Rheem, Rinnai, Sanden, Solahart, Thermann, and Wilson Hot Water. This list is updated regularly.

The Pre-Approval Process

Unlike the VEU discount (which is applied at invoice with no pre-approval needed), the Solar Victoria rebate requires pre-approval before installation. The step-by-step process, as published on solar.vic.gov.au, is:

Research your options using the Solar Victoria Hot Water Buyers Guide
Contact an authorised hot water retailer (Climate Green is authorised)
Select a product from the Solar Victoria approved product list
Request a written quote — your retailer uploads this into the Solar Victoria portal
Wait for confirmation that the quote has been uploaded
Apply for pre-approval online at service.vic.gov.au
Upload your identification (2 forms of ID) and proof of income documentation
Wait for Solar Victoria to confirm eligibility and issue your unique QR code
Complete installation within 120 days of receiving your QR code
Pay the net amount — the rebate is deducted directly from your invoice by the retailer

Emergency installations: If your hot water system breaks down unexpectedly, you do not need to wait for pre-approval before replacing it. Proceed with installation using an eligible product through an authorised retailer, then apply for the rebate as soon as possible after installation. Source: solar.vic.gov.au

Program 2: The Victorian Energy Upgrades (VEU) Hot Water Discount

The Victorian Energy Upgrades (VEU) program is administered by the Essential Services Commission (ESC) of Victoria and has been operating since 1 January 2009. Since its inception, the program has delivered energy-efficient upgrades to over 2.4 million Victorian households and more than 170,000 businesses.

How the VEU Discount Works

The VEU program does not operate as a traditional rebate where you pay upfront and claim money back. Instead, it creates Victorian Energy Efficiency Certificates (VEECs) for every eligible installation. These certificates have a monetary value that VEU-accredited providers pass directly to the customer as an upfront discount on the installation invoice.

The discount amount is not fixed — it varies based on current VEEC market prices at the time of installation. The Victorian Government’s energy.vic.gov.au website publishes indicative discount ranges to help households estimate savings:

Replace This System	With a Heat Pump	With Solar-Boosted
Inefficient electric hot water system	~$630 indicative discount	~$910 indicative discount
Inefficient gas hot water system	~$560 indicative discount	~$700 indicative discount

Indicative figures from energy.vic.gov.au — actual discounts vary with current VEEC market price. Source: energy.vic.gov.au/victorian-energy-upgrades/products/hot-water-system-discounts

VEU Eligibility

Property must be located in Victoria
The property must be at least 2 years old
The existing system being replaced must be an inefficient electric or gas hot water system (this can include electric or gas-boosted solar water heaters with non-functional solar components, if the relevant warranty period has expired and the system was installed at least 5 years ago)
Residential upgrades are limited to a maximum of 2 domestic products per household
The installed product must appear on the ESC approved product register under the relevant activity category
A minimum customer contribution of $200 (incl. GST) applies — hot water systems cannot be installed at zero cost to the customer

Renters are eligible for the VEU discount. The Victorian Government recommends that landlords and tenants work together when undertaking upgrades to a rental property.

What Makes a Hot Water System ‘Inefficient’ Under VEU?

Under the VEU program, the following are considered inefficient and eligible for replacement:

Electric storage hot water systems — cheapest to purchase but most expensive to run on standard tariffs
Inefficient gas hot water heaters (LPG, natural gas, or simulated natural gas) — gas storage systems are particularly inefficient in cooler climates due to heat loss from the area where the gas flame heats the tank
Non-functional solar water heaters — a solar system that is no longer heating water due to failed components operates as a conventional inefficient gas or electric unit and qualifies for replacement

Program 3: Federal Small-Scale Technology Certificates (STCs)

Small-scale Technology Certificates (STCs) are a federal government financial incentive administered by the Clean Energy Regulator under the Small-scale Renewable Energy Scheme. Heat pump hot water systems that meet minimum energy performance standards generate STCs based on the estimated energy savings they will deliver over their lifetime.

Like the VEU discount, the STC benefit is applied as an upfront price reduction at the point of sale by the installer — it does not require a separate application by the homeowner. The value of STCs fluctuates with the market but typically delivers an additional discount in the range of $300–$600 for a residential heat pump hot water system in Victoria, depending on system size and your geographic zone.

All three programs — Solar Victoria, VEU, and STCs — can be combined on a single installation. Climate Green is accredited to access all three on your behalf and will apply every available discount to your invoice.

Side-by-Side Eligibility Comparison

Eligibility Criterion	Solar Victoria Rebate	VEU Discount
Owner-occupier required?	Yes — owner-occupier only	No — renters and landlords eligible
Location	Victoria	Victoria
Property age	Existing property	Property must be 2+ years old
Income limit	Under $210,000/yr now; under $150,000/yr from 1 July 2026	No income limit
Property value cap	Under $3 million	No property value cap
Previous rebate restriction	Property must not have received a Solar Victoria hot water rebate before	No restriction on previous rebates
Existing system age	Must be 3+ years old from date of purchase	Must be inefficient electric or gas system
Pre-approval required?	Yes — before installation (except emergencies)	No — discount applied at invoice
Minimum customer contribution	N/A (rebate is 50% of product purchase price after other discounts)	$200 minimum (incl. GST)

Sources: solar.vic.gov.au/hot-water-rebate and energy.vic.gov.au/victorian-energy-upgrades/products/hot-water-system-discounts (accessed June 2026)

Critical 2026 Change: Income Eligibility Tightens from 1 July 2026

This is the most time-sensitive issue for Victorian homeowners considering a heat pump upgrade in 2026. Solar Victoria has confirmed that from 1 July 2026, the combined household income threshold for the Solar Victoria Hot Water Rebate will reduce from $210,000 per year to $150,000 per year.

If all property owners combined earn between $150,000 and $210,000 per year, the window to access the rebate under the current, more generous threshold closes at 5pm on 30 June 2026. After that date, applications from households in this income band will be assessed under the new $150,000 cap and will not be eligible.

What You Must Do Before 30 June 2026 If You Earn $150,000–$210,000 1. Contact an authorised retailer (Climate Green) immediately to arrange a quote. 2. Ensure your retailer uploads the quote into the Solar Victoria portal. 3. Submit your FULL application — including all required documents and identification — by 5pm on 30 June 2026. 4. A ‘saved’ or ‘timed-out’ application will NOT be considered. You must click Submit. 5. If you miss this deadline, your eligibility will be assessed under the new $150,000 income cap. Source: solar.vic.gov.au/hot-water-rebate (updated 2 June 2026)

Looking Ahead: Mandatory Gas Phase-Out from March 2027

Beyond the current rebate landscape, the Victorian Government has confirmed mandatory electrification standards for residential buildings. From 1 March 2027, existing homes must replace gas hot water systems with an efficient electric alternative — such as a heat pump — when those systems reach end of life.

This means that any gas hot water system installed in Victorian homes today will, by law, need to be replaced with an electric system when it fails. Upgrading proactively now — while the full suite of rebates is available — is a financially sound decision compared to undertaking a forced replacement under potentially different rebate conditions in the future.

Source: Victorian Government electrification and efficiency standards — energy.vic.gov.au/households/electric-and-efficiency-standards-for-buildings

Energy Efficiency: How Much Can You Actually Save?

The Victorian Government and the Clean Energy Regulator both publish data on the energy efficiency advantages of heat pump technology. Key facts:

Heat pump hot water systems use up to 75% less electricity than a conventional electric resistance hot water system — as confirmed by energy.vic.gov.au
Hot water accounts for 15% to 30% of a typical household’s total energy use — as confirmed by solar.vic.gov.au
Switching from gas to an efficient electric hot water system can save households approximately $400 per year on energy bills — Victorian Government figure from energy.vic.gov.au
Solar-boosted hot water systems are considered the cheapest hot water systems to run, generating heat directly from the sun — energy.vic.gov.au
Pairing a heat pump with existing rooftop solar panels allows the heat pump to run primarily on solar generation, further reducing running costs

Hot Water System Type	Approx. Annual Running Cost
Old gas storage hot water	Higher running costs; gas storage systems especially inefficient in colder climates due to heat loss
Old electric resistance hot water	Most expensive electricity-based option to run
Heat pump hot water (grid electricity)	Uses up to 75% less electricity than a conventional electric system
Heat pump hot water + rooftop solar PV	Lowest running cost; solar generation powers the heat pump during daylight hours
Solar-boosted hot water system	Cheapest hot water systems to run overall; generate heat directly from the sun

Efficiency data sourced from energy.vic.gov.au and solar.vic.gov.au. Individual savings will vary based on household size, usage patterns, current tariff, and whether solar panels are installed.

Product Requirements: What Systems Qualify?

To access either the Solar Victoria rebate or the VEU discount, your installer must use an approved product. Under the VEU program:

All heat pump water heaters must be listed on the Essential Services Commission (ESC) approved product register under activity category ‘1D(18) & 3C — Water heater — Heat pump’
Heat pump water heaters installed under VEU must carry a minimum 5-year warranty
Under the Solar Victoria program, products must appear on Solar Victoria’s approved hot water product list, accessible at solar.vic.gov.au/product-lists

Climate Green supplies and installs only CEC-approved and VEU-approved systems. All products installed are drawn from the current approved lists, and our team stays up to date as Solar Victoria updates its product register.

Choosing a product from the Solar Victoria locally made incentive list (brands including Rheem, Rinnai, Reclaim Energy, Sanden, Panasonic Australia, and others) qualifies your household for the higher $1,400 rebate rather than the standard $1,000 rebate. Ask Climate Green which systems in your budget are eligible for the higher tier.

How Climate Green Handles the Entire Process for You

One of the most common reasons Victorian homeowners delay upgrading is the perception that government rebate paperwork is complicated. Climate Green’s role is to remove that barrier entirely.

As a VEU-accredited provider and Solar Victoria authorised retailer, Climate Green manages the complete process from first contact through to your compliance certificates:

Free eligibility check — we confirm your qualification for Solar Victoria, VEU, and STC programs before any commitment
Recommendation — we assess your household size, water usage, and existing system to recommend the right heat pump capacity and product
Quote and pre-approval — we prepare your quote and submit it to the Solar Victoria portal on your behalf; we guide you through the pre-approval documentation
Rebates applied at invoice — all applicable discounts (Solar Victoria rebate, VEU discount, and STC value) are deducted from your invoice before you pay
Licensed installation — our plumbers and electricians complete the installation and responsibly remove your old system
Compliance certificates — you receive your Plumbing Compliance Certificate (VBA) and Certificate of Electrical Safety (CoES) confirming the installation meets all Victorian regulatory requirements

Frequently Asked Questions

Can renters access the heat pump hot water rebate in Victoria?

Renters are not eligible for the Solar Victoria Hot Water Rebate, which requires owner-occupier status. However, renters and rental properties are eligible for the VEU discount — and the Victorian Government recommends landlords and tenants work together on upgrades. Climate Green can provide landlords with a quote that incorporates the VEU and STC discounts.

Does a heat pump hot water system work well in Melbourne winters?

Yes. Modern heat pump hot water systems are engineered to operate efficiently in cold conditions. The Victorian Government’s approved product list includes systems rated for reliable performance in Melbourne’s temperate climate. Heat pumps extract ambient heat from the air — even cold air contains usable heat energy — rather than generating heat directly.

Can I combine a heat pump hot water rebate with a solar panel rebate?

Yes. Solar Victoria confirms that eligible Victorians can apply for both a solar panel (PV) rebate and a hot water rebate to save even more on energy costs. The two programs can be accessed separately, subject to each program’s eligibility criteria. Visit solar.vic.gov.au for the current solar PV rebate details.

What is the minimum I have to pay under the VEU program?

Under the Victorian Energy Upgrades program, there is a mandatory minimum customer contribution of $200 including GST. This applies to all residential hot water upgrades. Hot water systems cannot be installed at zero cost to the customer under this program. Any offer advertising a ‘free’ heat pump hot water system under VEU is not compliant with program requirements.

How long does the pre-approval process take?

Most Solar Victoria pre-approvals are processed within a few business days once your application is submitted with all required documentation — including 2 forms of ID and proof of income. Climate Green helps you prepare this documentation to minimise delays.

My hot water system just broke down — can I still get the rebate?

Yes. Solar Victoria’s emergency installation provision allows you to proceed with installation before receiving pre-approval in the event of a system breakdown. You must still use an eligible product installed by an authorised retailer, and you must apply for the rebate as soon as possible after installation. Climate Green can arrange rapid replacement and manage the post-installation rebate application on your behalf.

What happens after 1 July 2026 if I miss the income threshold deadline?

After 1 July 2026, the Solar Victoria Hot Water Rebate will only be available to households with a combined taxable income of $150,000 or less per year. If your income is above this threshold, you will not be eligible for the Solar Victoria rebate — though you may still access the VEU discount and STC benefit, which do not have income limits. The VEU program will continue to provide a meaningful upfront discount regardless of the Solar Victoria income cap.

Victorian Heat Pump Hot Water Rebate 2026: The Complete Homeowner Guide