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The cost of heating and cooling your home or business can be a significant part of your energy bills.
On average, households can spend up to $800 a year, or a third of their energy bill, on heating. This can be significantly more for businesses.
By replacing old heating and cooling systems with more energy-efficient ones or simply purchasing new energy-efficient ones, you can reduce your costs and energy use.
We recommend reviewing our guidance to help you choose the right reverse cycle air conditioner for your home.
Space heating and cooling factsheet
We have created a handy factsheet to assist you in selecting the right size reverse cycle air conditioner to heat and cool your home. This factsheet will also be provided to you if you undertake a heating and cooling upgrade under the VEU program.
Eligibility
All Victorian households and businesses are eligible to apply for discounts.
With this activity you can only install a:
- VEU approved product with a minimum 5-year warranty
- range of ducted and non-ducted RCACs
- high-efficiency RCACs capable of both heating and cooling.
To find an approved product visit the product register, select ‘6(23) - Space heater and cooler - High efficiency air conditioner’ from the drop down menu and click 'Search'.
If you are replacing an existing heating or cooling system, the property must be more than 2 years old.
Living in a rental property?
Private rental properties are eligible to receive a discount on a heating and cooling system. We recommend that landlords and tenants work together when doing any upgrades to a rental property.
For more information, visit renters, landlords and body corporate.
How much discount you can expect
For households
Incentives of up to the following amounts are available for the average household:
Installing an efficient room-reverse cycle air conditioner
| Current system | Upgrade system size | Indicative discount* |
|---|---|---|
| Hard-wired electric resistance room heater | 3kW to 9kW | Up to $840 |
| Ducted (whole-of-house) gas heater | 4 split systems installed: 1 x 8kW 3 x 3kW | Up to $2,520 |
| Ducted (whole-of-home) gas heater | Multi-split system: 1 x 10kW outdoor unit | Up to $2,940 |
| Non-ducted (room) gas heater | 3kW to 9kW | $630 to $1,610 |
| Non-ducted reverse cycle air conditioner | 3kW to 9kW | $210 |
| No decommissioned product | 3kW to 9kW | $70 to $140 |
Installing an efficient ducted reverse cycle air conditioner
| Current system | Upgrade system size | Indicative discount* |
|---|---|---|
| Central electric resistance ducted heater | 10kW to 22.4kW | Up to $5,460 |
| Ducted gas heater | 10kW 16kW 22.4kW | Up to $2,520 Up to $4,200 Up to $5,530 |
| Ducted reverse cycle air conditioner | 10kW 16kW 22.4kW | Up to $490 Up to $770 Up to $910 |
| No decommissioned product | 10kW to 22.4kW | Up to $410 |
For businesses
Installing an efficient room-reverse cycle air conditioner
| Current system | Upgrade system size | Indicative discount* |
|---|---|---|
| Hard-wired resistance electric room heater | 3kW to 9kW | Up to $490 |
Ducted gas heater | If 4 split systems are installed in total: One x 8kW Three x 3kW | Up to $1,680 |
Ducted gas heater | Multi-split system: One x 10kW outdoor unit | Up to $1,820 |
| Non-ducted gas heater | 3kW to 9kW | $420 to $1,050 |
| Non-ducted reverse cycle air conditioner | 3kW to 9kW | $210 to $490 |
| No decommissioning | 3kW to 9kW | $70 to $140 |
Installing an efficient ducted reverse cycle air conditioner
| Current system | Upgrade system size | Indicative discount* |
|---|---|---|
| Central electric resistance ducted heater | 16kW to 56kW | Up to $4,060 |
| Ducted gas heater | 16kW 25kW 32kW 56kW | Up to $2,590 Up to $3,850 Up to $6,230 Up to $8,820 |
| Ducted reverse cycle air conditioner | 16kW 25kW 32kW 56kW | Up to $910 Up to $1,400 Up to $3,010 Up to $3,290 |
| No decommissioning | 16kW to 56kW | Up to $1,820 |
It is important to consider warranty when installing a new space heating and cooling system. Under VEU, space heating and cooling systems must be covered by a minimum 5-year warranty. A warranty is only as good as the company that provides it, so remember to read the warranty conditions look for a company with experience in manufacturing energy efficient space heating and cooling systems.
Under the VEU, space heating and cooling systems have a minimum customer contribution that must be met by all households and businesses. Products cannot be free of charge and customers must contribute at least the following to the cost of the product:
- $200 (inc. GST) per product for all non-ducted RCACs under 10 kW
- $1,000 (inc. GST) per product for all non-ducted RCACs over 10 kW
- $1,000 (inc. GST) per product for all multi-split and ducted RCACs.
The final installed price of the appliance, which includes the discount, is up to the accredited provider and will depend on several factors, including:
- certificate price (which can fluctuate)
- location
- installation costs
- the accredited provider’s administrative costs.
For more information on the certificate price under the VEU program, visit Victorian Energy Efficiency Certificates (VEECs).
If you have purchased an eligible product after 31 May 2023, and would like to organise a retrospective rebate, an accredited provider may be able to guide you through the process.
Find an accredited provider in your area
Please note that as VEU is a market-based program:
- not all accredited providers listed above will necessarily be offering heating and cooling system upgrades at present
- accredited providers can choose when and where they undertake upgrades.
Understanding heating and cooling systems
Existing equipment to be decommissioned | Definition |
|---|---|
Hard-wired resistance electric room heater | Electric resistance room heaters that are hard-wired are fixed to a wall and provide heating to a single room. Resistance heating elements cause electrical energy to be converted to heat energy and distributed as either radiant or convection heat. To be upgraded these heaters must be the main form of heating at the premises. |
Central electric resistance ducted heater | Central electric resistance ducted heaters are stand-alone heating units which are designed for installation with ducts to distribute heat. These must provide heating to a space with a floor area of at least 100m2. |
Hard-wired slab heater | These units provide heat to a whole house via electric cabling embedded in the slab. They heat the concrete to a low temperature which acts as a low temperature radiator, as well as heating the air in the room. |
Ducted (whole-of-home) gas heater | Ducted gas heaters consist of a central furnace unit that supplies heating to different parts of the house via ductwork. Units can be installed under the floor, in the ceiling or next to an external wall. Heat is distributed via ducting found in the ceiling or under the floor. |
Non-ducted (room) gas heater | Non-ducted gas heaters (also referred to as room gas heaters) are often fixed and designed to heat a single room or open plan area by burning natural gas or LPG. |
Refrigerative air conditioner | An air conditioner capable of cooling only. |
Ducted (whole-of-home) reverse cycle air conditioner | Ducted reverse cycle air conditioners provide heating and cooling to different parts of the house via ductwork. |
Non-ducted reverse cycle air conditioner | Non-ducted reverse cycle air conditioners provide heating and cooling for a single room or open plan area. Can be split systems, which have an indoor and outdoor unit. |
None of the combinations specified | This represents any equipment not captured in available decommissioning options or in instances where there is no heating and/or cooling equipment present. |
There is no minimum system size requirement to obtain a discount on an upgrade of a reverse cycle air conditioner.
Page last updated: 14/04/25