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We are taking action to ensure Victorian buildings – residential and commercial - are safer, more comfortable and healthier to be in - while saving you hundreds of dollars a year on energy bills and cutting emissions.
These changes introduce new building electrification regulations and set minimum energy efficiency standards for rental homes.
They will be phased in over 4 years, beginning from 1 January 2027.
These changes will affect people differently depending on their circumstances. There are a range of exemptions for situations where electrification or compliance with the standards is impractical or costly.
Find out how the changes apply to you
New builds – residential and commercial
From January 2027, all new homes and commercial buildings must be built all-electric, including commercial kitchens.
This does not apply to industrial or agricultural buildings or existing commercial buildings.
Support available: VEU discounts.
Existing owner-occupiers
From 1 March 2027, if a gas hot water appliance breaks and cannot be repaired, it must be replaced with an electric alternative.
No requirement to upgrade gas space heating or stovetop gas cooking to electric, however, we encourage existing homeowners to make this change to lower the cost of their energy bills.
Support available: VEU discounts, Solar Homes Hot water rebate (if eligible).
Rental providers – appliance upgrades
From 1 March 2027, when a hot water or heating appliance breaks and cannot be repaired, it must be replaced with an efficient electric reverse cycle air-conditioner or heat pump water heater.
No requirement to upgrade stovetop gas cooking to electric, however we encourage rental providers to make this change to improve the value of their property.
Support available: VEU discounts.
Rental providers – 4-star showerheads and cooling
From 1 March 2027, at the start of a new lease, rental homes must include:
- Energy-efficient cooling in the living area
- 4-star showerheads
Support available: VEU discounts.
Rental providers – insulation
From 1 March 2027, at the start of a new lease, ceiling spaces without insulation must be upgraded to R5.0 rating, installed by an accredited professional.
Support available: VEU discount (expected to be available by 1 January 2027).
Rental providers – draughtproofing
From 1 July 2027, at the start of a new lease, rental properties must have draughtproofing installed on external doors, windows, and wall vents.
Support available: VEU discounts.
Rental providers – efficient cooling in all properties
By 1 July 2030, efficient electric cooling must be installed in the living area of all rental properties, regardless of lease status.
Support available: VEU discounts.
Our nation-leading programs are supporting Victorians with rebates and discounts
To support these changes, we are slashing the up-front cost of going electric and improving energy efficiency.
With our nation-leading Victorian Energy Upgrades and Solar Homes programs, efficient electric appliances need not cost more than gas alternatives – and will help Victorian households and businesses save thousands on their energy bills each year.
Victorian Energy Upgrades
Heating and cooling discounts
Households can claim a discount of up to $1,610 and save up to $400 in operating costs annually* when they install or replace an existing gas space heater with an efficient reverse cycle air conditioner.
Households can claim a discount of up to $5,530 and save up to $1,010 annually* when removing and replacing an existing ducted gas heater with an efficient reverse cycle air conditioner.
Hot water discounts
Households can claim a discount of up to $560 and save up to $330 in operating costs annually* when they install or replace an existing gas hot water heater with a heat pump water heater.
Cooking discounts
Purchasing an induction cooktop will attract a rebate of about $140 if you have an existing gas cooktop. If cooking is your last gas appliance, you can save around $400 a year in supply charges by disconnecting from gas altogether.
*Indicative savings only
Discounts are also available for showerheads, draughtproofing and home energy assessments.
Visit Victorian Energy Upgrades to learn more.
Solar Homes Program
Solar panel (PV) rebate
Eligible households can claim rebates of 50% up to $1,400 plus an equivalent interest-free loan off the upfront cost to install solar panels.
Solar Homes customers save up to $1,000 a year on energy bills when they use the free solar power they generate through the day to power their home and appliances to avoid paying retail electricity prices.
Solar rebates for rental properties
Eligible rental providers can claim rebates of 50% up to $1,400 plus an equivalent interest-free loan off the upfront cost to install solar panels on up to two rental properties in a financial year, saving on bills for renters, cut emissions and adding value to the rental property.
Hot water rebate
Households can receive rebates up to 50% off the costs of installing hot water systems. From 1 July, households that choose an eligible hot water system with local content through the Solar Homes program can receive a higher maximum rebate amount of up to $1,400.
A maximum rebate amount of $1,000 will remain for eligible imported hot water systems. Replacing a gas hot water system with a quality heat pump hot water system can save a household up to $330 a year on electricity bills.
Visit Solar Victoria to learn more.
Check around for additional savings
Don’t forget to check other incentives that may be offered by your local council or the Australian government.
For example, Small-scale Technology Certificates (STCs) is a payment made by the Australian Government to purchasers of renewable energy systems, including solar panels, solar hot water systems and heat pump hot water systems.
Learn more at renewable power incentives.
What are the benefits of efficiency and electrification?
All-electric homes are cheaper to run, preserve gas for industry, and are better for the environment.
New all-electric homes save $880 a year or $1,820 with solar.
Existing all-electric homes save approximately $1,700 or $2,020 with solar.
Replacing gas hot water with electric saves around $330 a year.
Adding ceiling insulation where not already present saves around $454 a year.
Why are these changes being made?
With fossil gas no longer the cheap and plentiful option it once was, immediate action is required to electrify Victoria’s residential and commercial sectors.
These changes mean that by 2030, Victorian buildings – both homes and businesses – will cost far less in energy bills to run.
It also shores up gas supply for the Victorian industries that need it most, helping them to continue to do the business that benefits our economy – and all Victorians.
Page last updated: 24/06/25