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Heating and cooling your home or business can make up a significant portion of your energy bills.

Replacing older heating and cooling systems with more efficient options can reduce energy use and lower costs. Upgrading also helps improve your home and keep it comfortable year‑round.

Households can receive a discount of up to $1,610 and save up to $460 on energy bills each year when they install or replace a non‑ducted gas space heater (such as a single room heater) with an efficient reverse cycle air conditioner.

Higher discounts are available for larger systems, with up to $5,530 off and energy bill savings of up to $1,140 a year when removing or replacing a ducted (whole‑of‑home) gas heater with an efficient reverse cycle air conditioner.

Eligibility

All Victorian households and businesses are eligible for a heating and cooling discount through the Victorian Energy Upgrades program.

Private rental properties are also eligible. We recommend that landlords and tenants work together when planning an upgrade. For more information, visit Renters, landlords and body corporate.

Product requirements

To be eligible, you must install an approved high‑efficiency reverse cycle air conditioner that provides both heating and cooling. Eligible systems include a range of ducted and non‑ducted models.

The product must:

  • be approved under the Victorian Energy Upgrades program
  • come with a minimum 5‑year warranty (if for a home)
  • be a high‑efficiency reverse cycle air conditioner.

If you are replacing an existing heating or cooling system, the system being replaced must be more than 2 years old.

How to get a discount

Choose a heating and cooling upgrade and an accredited provider from the list at the bottom of this page. The accredited provider may complete the installation themselves or work with a partner installer.

The accredited provider (or their installer) will:

  • confirm which models are eligible
  • provide a quote that includes the discount
  • install the system
  • handle the paperwork, including providing any electrical or plumbing certificates to you.

If you have your own installer, they can work with an accredited provider to apply the discount.

Discounts for households

Tip: Getting more than one quote can help you compare options and choose the right system for your home.

If you have your own installer, they must work with an accredited provider to apply the discount before any work starts.

Current system Upgrade system size Indicative discount*
Hard-wired electric resistance room heater 3 kW to 9 kW Up to $840
Ducted (whole-of-house) gas heater

4 split systems installed:

1 x 8 kW

3 x 3 kW

 Up to $2,520
Ducted (whole-of-home) gas heater

Multi-split system:

1 x 10 kW outdoor unit

 Up to $2,940
Non-ducted (room) gas heater 3 kW to 9 kW $630 to $1,610
Non-ducted reverse cycle air conditioner 3 kW to 9 kW $210
No decommissioned product 3 kW to 9 kW $70 to $140

Current system Upgrade system size Indicative discount*
Central electric resistance ducted heater 10 kW to 22.4 kW Up to $5,460
Ducted gas heater

10 kW

16 kW

22.4 kW

Up to $2,520

Up to $4,200

Up to $5,530

Ducted reverse cycle air conditioner

10 kW

16 kW

22.4 kW

Up to $490

Up to $770

Up to $910

No decommissioned product 10 kW to 22.4 kW Up to $410

Discounts for businesses

Incentives of up to the following amounts are available for eligible businesses.

Current system Upgrade system size Indicative discount*
Hard-wired resistance electric room heater 3 kW to 9 kW Up to $490

Ducted gas heater

If 4 split systems are installed in total:

One x 8 kW

3 x 3 kW

 Up to $1,680

Ducted gas heater

Multi-split system:

1 x 10 kW outdoor unit

Up to $1,820

Non-ducted gas heater 3 kW to 9 kW $420 to $1,050
Non-ducted reverse cycle air conditioner 3 kW to 9 kW $210 to $490
No decommissioning 3 kW to 9 kW $70 to $140

Current systemUpgrade system sizeIndicative discount*
Central electric resistance ducted heater16kW to 56kWUp 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 decommissioning16kW to 56kWUp to $1,820

Choosing the right system

There are many eligible systems and models available through the program. Guidance is available on Choosing the right reverse cycle air conditioner.

This factsheet can also help you select the right size reverse cycle air conditioner to heat and cool your home:

Find an accredited provider

Accredited providers are the only organisations that can apply the discount. They manage the installation and oversee the process. You can also choose your own installer if they are partnered with an accredited provider.

Please note that the Victorian Energy Upgrades program is market‑based:

  • Not all accredited providers listed above will necessarily be offering heating and cooling system upgrades at this time.
  • Accredited providers can choose when and where they undertake upgrades.

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.

More information

For information on the certificate price under the program, visit Victorian Energy Efficiency Certificates (VEECs).

For information on eligibility for retrospective rebates, visit About Victorian Energy Upgrades.

Page last updated: 29/05/26