Nearly 100,000 households have participated in the Victorian Energy Upgrades program in the first six months of 2025, including to swap out gas appliances for efficient electric alternatives that can cut hundreds of dollars from their annual energy bills.
State energy minister Lily D’Ambrosio says 99,000 households have taken advantage of the Victorian Energy Upgrades (VEU) program so far this year, with participation expected to exceed 170,000 households by year’s end.
The VEU scheme incentivises households and businesses to invest in energy efficient appliances and building upgrades by offering discounts.
When a household or business accesses a discount through the scheme, the accredited providers create Victorian Energy Efficiency Certificates (VEECs), which are then sold to energy retailers to meet annual energy savings targets set in Victorian legislation.
The program was originally launched all the way back in 2009, but has more recently evolved to support the state policy-driven electrification of homes.
Victoria is the largest user of residential gas in Australia, but is also the first state (not counting the ACT) in the country to ban gas connections in new-build homes and to legislate a staged phase-out of gas in existing homes.
In late June, the Victorian Labor government announced that, from May 2027, owner-occupied households will be required to replace end-of-life gas hot water systems with electric heat pumps or other efficient alternatives.
In rental properties, both gas hot water systems and gas heaters must be replaced with efficient electric alternatives at end of life, from March 2027.
From July 2024, VEU discounts were made available for houses switching their gas cooktops for electric induction stoves, and for a wider range of hot water and space heating heat pumps. Further, the Allan Labor government has introduced legislation to extend the VEU program to 2045, from its current end-date in 2030.
For example, a household that replaces a gas ducted heating system with an electric heat pump can get a cost deduction of up to $3,600.
As well as extending the VEU, the Allan government is also undertaking a review of the program that will be conducted over the next two years.
According to data revealed last week, in the first half of 2025 the VEU has seen over 41,000 households access discounted heating and cooling upgrades, capable of saving households up to $5,530 on the cost of upgrading appliances and over $1,000 on their annual energy bills.
Similarly, more than 18,000 households have upgraded their gas water heating to electric, a move which saves up to $330 each year.
These hot water system upgrades are one of the most popular available through the VEU, offering up to $2,030 off the cost of installing a locally made electric hot water system when combined with a Solar Victoria rebate and a Victorian Energy Upgrades discount.
According to the state government, a new all-electric home with solar can save up to $1,820 annually on energy bills, while existing homes can save around $2,000 each year by going all-electric with solar.
During 2024, it is estimated that the VEU saved households almost $54 million off their energy bills – money that went straight back into the pocket of Victorian families.
The VEU program is also directly supporting 2,700 jobs for businesses and tradespeople delivering the installations.
“We’re on the side of Victorian families and helping them cut their energy bills in a time where every dollar counts,” said D’Ambrosio.
“The VEU program is just one way we’re helping Victorians cut energy costs, with people also able to save through the Power Saving Bonus and solar homes programs.”
Other upgrades available through the VEU include reverse cycle air conditioners, heat pump hot water systems, induction cooktops, weather sealing, and more.
More information about the Victorian Energy Upgrades program is available here.
