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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, Victorian 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 significantly reduce the costs and energy use associated with heating and cooling.


All Victorian households and businesses are eligible to apply for discounts.

Your participation is voluntary.

Living in a rental property?

If you’re living in a private rental property, you 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.

New upgrades available

With this new activity, you can only install a:

  • Victorian Energy Upgrades (VEU) approved product
  • range of ducted (whole-of-home) and non-ducted (room) reverse cycle air conditioners
  • high-efficiency reverse cycle air conditioner capable of both heating and cooling.

Note: to be eligible for a discount, the accredited provider or installer may also be required to decommission your existing heating system. The following type of heating and cooling appliances can be upgraded to energy-efficient reverse cycle air conditioners:

Existing equipment to be decommissioned


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.

Choosing the right heating and cooling system for your home

It is important to choose the right heating and cooling system for your home. Every household is unique, and this impacts what system is appropriate.

We recommend reviewing our guidance to help you choose the right reverse cycle air conditioner for your home.

Victorian Energy Upgrades (VEU) 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.

Key steps when organising an heating and cooling installation

To get a discount on the installation of a heating and cooling system you must:

  1. install an approved product
    Hint: research these products for their suitability and quality. There are a lot of products approved for installation as part of VEU. Not all products are of the same quality or suitable for every environment.
  2. work with an accredited provider
    Hint: get quotes from several providers. Accredited providers offer different types of products, services, expertise and costs. Make sure to get a quote from several accredited providers on the final installed price of the appliance, which includes the discount.
  3. decommission your existing heating and cooling system.

Working with accredited providers

An accredited provider is:

  • any business that is approved to deliver or facilitate installations in the VEU program
  • responsible for helping you get a discount on an installed appliance through the VEU program.

When doing an installation through the VEU program, accredited providers can either:

  • use their own tradesperson, or
  • work with a tradesperson of your choice.

Accredited providers will be able to explain:

  • the steps to take part in the program
  • the types of products can you install to get a discount
  • the necessary qualifications of the tradesperson who installs the heating and cooling system.

Remember: you must work with an accredited provider to get a discount on an installed appliance through the VEU program.

How to check if a person or business is accredited under the VEU program

The Essential Services Commission’s VEU Registry of Accredited Persons:

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

Note: accredited providers often work with installers who are not listed on the registry.

How much discount you can expect

Incentives of up to the following amounts are available for the average household:

Current system

Upgrade system size

Indicative discount*

Ducted (whole-of-house) gas heater

Four split systems installed in total:

One x 8kW

Three x 3kW

Up to $2,520

Ducted (whole-of-home) gas heater

Multi-split system:

One x 10kW outdoor unit

Up to $2,800

Non-ducted (room) gas heater

3kW to 9kW

$560 to $1,400

Non-ducted reverse cycle air conditioner

3kW to 9kW

$210 to $490

No decommissioned product

3kW to 9kW

$70 to $280

Current system

Upgrade system size

Indicative discount*

Central electric resistance ducted heater

10kW to 22.4kW

$5,040 to $7,700

Ducted gas heater




Up to $2,450

Up to $3,500

Up to $5,180

Ducted reverse cycle air conditioner




$630 to $700

$910 to $1,260

$1,190 to $1,680

No decommissioned product

10kW to 22.4kW

$210 to $700

Please note: there is no minimum system size requirement to obtain a discount on an upgrade of a reverse cycle air conditioner.

*This figure is based on a certificate price of $70.

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 fluctuates)
  • location
  • installation costs
  • the accredited provider’s administrative costs.

For more information on the certificate price under the VEU program, please see Victorian Energy Efficiency Certificates (VEECs).

Find an accredited provider in your area

Can't 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.

Page last updated: 15/02/24