Strategic review

Overview

The Victorian Energy Upgrades (VEU) program is the Victorian Government’s flagship energy savings and emissions reduction initiative, with a strong track record of success in delivering low-cost energy saving activities since its commencement in 2009.

In June 2024, the Victorian Government commenced a strategic review of the VEU program. The Victorian Government has now announced plans to modernise the VEU program to help households and businesses cut energy costs, reduce emissions and electrify for the future.

The proposed changes are explained in the section titled ‘What changes to the VEU program is the strategic review proposing?’.

The proposed changes require amending the Victorian Energy Efficiency Target Act 2007. A Bill is intended to be introduced to Parliament in 2026, seeking Parliament’s approval of these proposed changes to the Act.

What is the purpose of the strategic review?

The strategic review aims to deliver an updated VEU program that is fit for purpose and fully supports the government’s policy objectives on electrification, energy affordability, emissions reduction targets, and reliability.

The strategic review will strengthen the VEU to ensure it is fit for the future and deliver electrification and energy efficiency at scale.

It is examining the changes needed to strengthen the program so it can better support households and businesses to reduce energy use and accelerate electrification. This includes addressing current barriers and industry challenges.

The strategic review will also explore options to improve consumer protections, increase participation by households and businesses, and strengthen the integrity of the scheme.

How is it funded?

The VEU Strategic Review is funded by a $5.9 million investment over 2 years and led by Solar Victoria, within the Department of Energy, Environment and Climate Action.

What consultation has been done to date?

A stakeholder reference group (SRG) was established to support the strategic review. The SRG consisted of industry and consumer bodies and experts in energy, energy efficiency and clean energy.

The group helped guide the strategic review and ensured a diversity of views informed its findings and recommendations.

The stakeholder reference group comprised key industry and consumer organisations, including:

Energy Consumers Australia
Environment Victoria
Victorian Council of Social Services
Energy Savings Industry Association
Australian Energy Council
Energy Efficiency Council
Clean Energy Council
Smart Energy Council.

The strategic review also ran an initial public consultation process from late 2024 to mid-2025.

A discussion paper was released on 10 February 2025, which invited feedback on the future design of the VEU program. More than 50 submissions were received from industry groups, individual businesses (including energy retailers), and consumer advocates.

Key themes of feedback included:

the growing role of VEU in electrification
demand management
flexibility and storage
customer experience
the role of accredited providers, installers and aggregators.

Most stakeholders strongly supported electrification and demand management, while others focused on technical elements.

Insights from this process were analysed and have directly informed policy development and proposals for legislative and regulatory reform now being proposed by the Victorian Government.

What changes to the VEU program is the strategic review proposing?

While greenhouse gas emissions will remain as the measurement for certificates in the VEU program, a key change will include renaming the Victorian Energy Efficiency Target Act 2007 to the Victorian Energy Upgrades Target Act.

This better reflects the program’s broader purpose and its role in achieving Victoria’s renewable energy and net zero goals.

New objectives and guiding VEU program principles will shape future decision-making and make sure the program can support upgrades which encompass equity, energy affordability, electrification and flexible demand, while operating in the best interests of consumers.

To support achieving these renewed objectives, changes in law will provide more flexibility and allow a more streamlined introduction of new activities as innovations occur and new technologies evolve, with the ability to help encourage activities that deliver wider economic, environmental and social co-benefits.

The framework for certificate targets will also become more flexible and responsive to market conditions, making it easier for energy retailers to meet their obligations and pass on savings to consumers.

Other measures will boost consumer awareness and protections, including making discounts more transparent and providing trusted, independent dispute resolution.

The proposed reforms will strengthen the Essential Services Commission’s capability for effective oversight, while introducing administrative efficiencies to reduce red tape for industry, such as extending accreditation validity for reliable, compliant Accredited Persons in the program and clarifying participant responsibilities.

In total, these reforms will modernise the VEU program’s framework, ensuring it continues to deliver on Victoria’s energy and emissions reduction targets and support the state’s energy needs.

Next steps and engagement opportunities

The Victorian Government will progress legislative change to progress the changes described above. The proposed changes require amendments to the Victorian Energy Efficiency Target Act 2007, with a Bill planned for Parliament in 2026.

Formal engagement on the proposed changes will take place over March and April 2026, with multiple opportunities for stakeholders to participate. Engagement will include a series of webinars with time for questions and discussion.

To comment, or stay updated on the strategic review, visit Engage Victoria, Strategic Review of the Victorian Energy Upgrades program.