State energy efficiency rebates to focus on electrification and getting homes off gas

The Victorian government’s long-running energy efficiency rebate scheme will undergo a nearly $6 million strategic review to better focus its design on helping households and businesses in the state to electrify and get off gas.

The review of the Victorian Energy Upgrades (VEU) program, was announced by the Labor Allan government on Tuesday as part of a $1.8 billion spend on energy in its cost-of-living focused 2024/25 state budget.

“With electrification the best way to lower power prices for families, we’re delivering a $5.9 million investment for a strategic review of the Victorian Energy Upgrades program – ensuring it will be the key driver to help more Victorians electrify their homes and businesses, slashing power bills and reducing emissions,” the government said.

Other funds allocated to energy in the budget include a top-up of the kitty for Solar Homes hot water rebates to a total of $37.7 million, a further $3.4 million in the Energy Assistance Program and $8.7 million towards power bill reduction measures like the Energy Compare website.

But energy efficiency and green groups say the spend on the VEU is long overdue for a program first launched back in 2009 – and well-timed to reset the scheme with an electrification focus.

“The ESIA has been advocating for a broader scope review of the VEU to better support Victorians as part of the energy transition and to provide a refresh of settings since the program was legislated and commenced in 2009,” said ESIA President Rod Woolley.

“Today’s announcement sends a clear signal that we have been heard.”

As it stands, the VEU is open to all households to apply for rebates worth up to $3600 to install efficient electric appliances including reverse cycle air conditioners, heat pump hot water systems and efficient lighting.

In December last year the Allan government announced the expansion of program to support upgrades to efficient electric induction cooktops – a change that is due to come into play in 2024.

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.

Woolley says it is expected that the review will develop options “to transition” the VEU scheme while providing industry with confidence to continue to engage and invest resources in the rapidly growing electrification sector.

One Step Off The Grid is seeking more information on what this transition might look like.

“This new scope of work will get under way in tandem with the 2026-2030 target setting process in train. It will be a fine balancing act that the government is committed to firming up during this term of government.

“We are looking forward to a targeted consultation kicking off soon to bring stakeholders together to discuss next steps,” said Woolley.