Legislation to extend Victoria’s market-based energy efficiency subsidy scheme by a further 15 years has passed through state parliament, sending a “rock-solid signal” to business to invest in electrification so consumers save energy and money.
The Victorian Energy Efficiency Target Amendment (Energy Upgrades for the Future) Bill 2025 was voted through parliament late on Tuesday, extending the Victorian Energy Upgrades (VEU) program to 2045 from its current legislated end date of 2030.
The VEU incentivises households and businesses to invest in energy efficient appliances and building upgrades by offering discounts – 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.
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 plan to extend the scheme was announced by Victorian energy minister Lily D’Ambrosio in October last year, following a decision earlier in the year to conduct a nearly $6 million strategic review of its design.
The VEU review, which is still underway, is expected to to better focus the program’s design on helping households and businesses in the state to electrify and get off gas.
In a statement on Wednesday, Energy Savings Industry Association (ESIA) president Ric Brazzale welcomed the extension of the VEU as well timed and well intentioned.
“This is the rock-solid signal industry needs to invest in energy efficiency for the next two decades in Victoria, and something we have been advocating on for several years,” Brazzale said.
“We need the Victorian government to now accelerate ‘upgrading’ the VEU with a longer-term vision, to be more fit for purpose so millions more Victorian homes and businesses can tap into the upfront financial discounts the VEU provides when replacing old inefficient appliances with more highly efficient technologies.”
The ESIA says the VEU coudl boost its effectiveness by updating its core objective – to reduce greenhouse gas emissions – to including reducing electricity peak demand.
“This fundamental addition will unlock more significant energy and bill savings for Victorian households and businesses by supporting rooftop solar PV and battery storage as well as energy efficient appliances,” ESIA says.
“There are more than 700,000 Victorian households with rooftop solar PV are now spilling free electricity in the middle of the day when they could be soaking it up into their own battery, hot water system or electric vehicle using integrated smart technology that could all be supported by the VEU.
“It’s a no brainer,” says Brazzale.
According to a VEU consumer Fact Sheet, the average household can save between $120 and $1,100 a year on energy costs, depending on the upgrade, while businesses can save between $500 and $74,000 a year – depending on both their size and the upgrade.
Sophie is editor of One Step Off The Grid and editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
