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A significant amount of energy is required to heat water. Approximately 36% of commercial building energy is for water heating that serves space heating and hot water. This proportion of energy is even greater for industrial facilities that have process heating requirements.

Improving the efficiency of your gas steam boilers, hot water boilers, or electric resistance water heaters is one of the best ways to reduce your business's energy bills.


To be eligible to upgrade your hot water system and get a discount/rebate, you must:

  • be a Victorian business
  • have an inefficient electric or gas hot water system.

Your participation is voluntary.

New upgrades to be introduced

The VEU program regularly reviews the range of energy efficiency upgrades available to receive incentives to make sure they continue to reduce emissions and save consumers money. As part of these reviews, DEECA recently consulted on changes to the VEU program’s space heating and cooling and water heating activities.

Following this consultation, DEECA has announced the introduction of incentives to replace gas appliances with efficient electric alternatives. New incentives to upgrade from gas to electric appliances will be introduced later in the year, so we recommend regularly visiting the VEU industry latest news page for updates on these new products/activities.

How to organise your hot water system upgrade

You must engage an accredited provider to get a discount or rebate on a hot water system upgrade.

Accredited providers can:

  • use their tradesperson (if they have any available) to install the hot water system
  • work with a tradesperson of your choice to install the hot water system.

Note: the accredited provider is responsible for helping you obtain a discount or rebate for the upgrade.

They will be able to explain:

  • the steps to participate
  • what sort of products can you install to get a discount/rebate
  • the necessary qualifications of the tradesperson who installs the hot water system.

To check if a person or business is an accredited provider, go to the Essential Services Commission's VEU Registry of Accredited Persons and:

  • select the 'Business name' drop-down menu
  • scroll until you see the accredited provider you are searching for.

Tips when organising a hot water system upgrade

  1. Shop around. As with any market, it's worth shopping around and finding the right fit for your needs. Further information about choosing the right hot water system is available from Sustainability Victoria.
  2. Ensure the product's suitability. To get a rebate, you must install an approved product. Search the Essential Services Commission register of products for approved products.
  3. Accredited providers operate freely like any other businesses and can choose what upgrades they deliver, with some keeping waiting lists for activities and may contact you if circumstances change.

Remember to do your research on products. Not all products are of the same quality or suitability for all working environments.

Additional information for installing a heat pump water heater

To minimise costs when installing hot water heat pumps, it is important to size them to meet your business needs. DELWP has engaged the Australian Alliance for Energy Productivity (A2EP) to develop a range of guidance materials to support best practice design, optimisation and installation of commercial and industrial heat pump water heaters.

These guideline resources support the design and installation of heat pumps water heaters in commercial and industrial applications account. They include technical design considerations and case studies to highlight applications of these principles.

Design considerations and guidelines

Case studies

How much rebate can you expect?

Removing an inefficient electric water heater

To be installed Indicative rebate*
Gas storage water heater Small $360
Medium $780
Large $1,020
Gas instantaneous water heater Small $480
Medium $840
Large $1,020
Electric boosted solar water heater Small $960
Medium $1,560
Heat pump water heater Small $660
Medium $1,080
Gas boosted solar water heater Small $1,020
Medium $1,680

Removing an inefficient gas water heater

To be installed Indicative rebate*

Efficient gas boosted solar water heater





*Discount/rebate will vary – these figures are based on a certificate price of $60 and the average efficiency of products improved under the program.

The final price will depend on several factors, including:

  • certificate price
  • type of LED
  • the number of products replaced
  • location
  • installation costs
  • administrative costs by accredited providers.

Find an accredited provider in your area

Page last updated: 28/03/23