The Victorian government will provide an extra $400 rebate to households seeking to upgrade their hot water system to an electric heat pump – if they buy Australian-made.
Victorian energy minister Lily D’Ambrosio says households applying for a discounted electric heat pump hot water system through the state’s Solar Homes Program could add $400 to the $1,000 already on offer by choosing an eligible product from an Australian manufacturer.
The move by the Victorian Labor government comes as the NSW Labor government and its Liberal predecessor both come under fire over the state’s heat pump incentive scheme, which industry claims has favoured cheap, low-quality systems from overseas over higher quality Australian products.
“We know there is a strong history of locally manufactured hot water products,” Victoria’s D’Ambrosio said in a statement announced the new incentive on Sunday.
“We want to make sure local jobs are supported and that money spent in Victoria stays in Victoria.”
The minister notes that the $1,000 rebate still exists on its own, allowing customers the choice of system, but the extra rebate amount is designed to ensure Australian manufacturers are not overlooked.
Victoria’s Solar Homes Program, which is operated by Solar Victoria, received $29.7 million boost from the 2025/26 state budget that the government is keen to direct towards electrification by subsidising appliances like heat pump hot water systems, reverse cycle air conditioners, and – to help power it all – solar panels.
Solar Victoria says using an efficient electric heat pump rather than gas for hot water can save a household up to $330 a year on its energy bills.
And Victorians have proved the value of heat pumps, making them the most popular part of the Solar Home Program with a 151 per cent increase in the number of installations on the previous year.
“We’re on the side of Victorians – helping families cut energy costs and take back control of their bills,” said D’Ambrosio.
