Strategic review

Overview

The 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 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.

The Victorian Government has legislated reforms to modernise the VEU program to help households and businesses cut energy costs, reduce emissions and electrify for the future. The reforms were enacted through the passing of the Energy and Resources Legislation Amendment (VEET Strategic Review and Other Matters) Bill 2026, which amends the Victorian Energy Efficiency Target Act 2007.

You can review the Amending Act here: Energy and Resources Legislation Amendment (VEET Strategic Review and Other Matters) Act 2026

These reforms position the VEU program to better support Victoria’s energy transition through to 2045, with a modernised framework that reflects evolving market conditions, supports electrification and delivers greater certainty for businesses operating in the scheme.

Changes are explained in the section titled ‘What changes will the strategic review reforms deliver?’

What is the purpose of the strategic review?

The 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.

These changes are 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 review’s reforms will improve consumer protections, increase participation by households and businesses, and strengthen the integrity of the scheme.

What consultation has been done to date?

Stakeholder Reference Group

A stakeholder reference group was established to support the strategic review. The group 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.

Public consultation on Engage Victoria

The review also engaged with industry and consumer stakeholder groups outside the stakeholder reference group through 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.

Webinars

The review held 3 public webinars over March and April 2026 to update stakeholders on proposed changes.

Attendees included industry representatives, such as accredited persons, energy retailers, peak bodies, installers, product manufacturers, and other service providers in the VEU program, as well as consumer advocates and community groups.

The webinars covered:

• what key reforms are proposed to modernise the program;
• why the VEU program needs to be updated and future-proofed in the face of a rapidly changing energy landscape;
• what the review has done to date to develop the reforms, including how industry and consumers were consulted and engaged; and
• what the next steps are in the review process are.

Overall, there was broad support for updating the VEU program, with stakeholders stressing the need for ongoing consultation, certainty and clarity as reforms progress.

Webinar questions focused on practical implementation details, including timing, the rollout of reforms and new requirements around consumer discount transparency and certificate price disclosure.

In response to the webinar feedback, the program will continue engaging with industry, clarify implementation pathways and timelines, and ensure robust consultation on key measures affecting the certificate market.

What changes will the strategic review reforms deliver?

As part of the strategic review reforms, greenhouse gas emissions will remain as the measurement for certificates in the VEU program. A key change is renaming the Victorian Energy Efficiency Target Act 2007 to the Victorian Energy Upgrades Target Act, reflecting the program’s broader purpose and its role in achieving Victoria’s renewable energy and net zero goals.

Reflecting 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 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

The legislation has now received Royal Assent and become law, marking an important milestone in modernising the VEU program.

The Victorian Government will progress consequential changes to the Victorian Energy Efficiency Regulations 2018 to support the reforms. Opportunities for industry input will be provided as further regulatory detail is developed.

Get the latest about the Victorian Energy Upgrades program

Page last updated: 17/09/26