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Hot Water Cost

Victoria's hot water rebates

Two programs can cut the price of a heat pump or solar hot water system in Victoria. One has no income test; the other does, so check both.

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Solar Victoria pays up to $1,000 towards an eligible heat pump or solar hot water system, or up to $1,400 for a locally made one. A Victorian Energy Upgrades discount comes off first. Solar Victoria puts the two together at up to $1,630 for most eligible systems.

1. The Solar Victoria rebate

The rebate is 50% of the price, worked out after the other discounts, and capped at the amounts above. You go through an authorised retailer, who takes it off your price.

Who qualifies

  • You're the owner-occupier of an existing home.
  • The combined taxable income of all owners is under $150,000 a year.
  • The property is valued under $3 million.
  • The system you're replacing is at least 3 years old.
  • The home hasn't already had a Solar Homes hot water or battery rebate.

2. The Victorian Energy Upgrades discount

Accredited providers take this off the price when they install an efficient system. The program lists an indicative $630 when a heat pump replaces an inefficient electric system and $560 when it replaces gas. The discount is tied to certificate prices, so treat those as a guide and ask your provider for today's figure.

An upgrade can't be free: households pay a minimum contribution of $200. Anyone offering a free install is skipping a program rule, so walk away.

Indicative VEU heat pump discount, by what you replace

Indicative amounts published by the Victorian Government. The real discount moves with the price of Victorian energy efficiency certificates.

Show these figures as a table
Item Figure
Replacing electric $630
Replacing gas $560

Using both together

The discount comes off first, then the Solar Victoria rebate is worked out on what's left. For a locally made product, Solar Victoria puts the combined saving at up to $2,030. The two government pages don't quote quite the same total for other systems: the Victorian Energy Upgrades page says up to $1,560, listed next to its gas replacement discount, while Solar Victoria says up to $1,630. The difference matches the gap between the gas and electric discounts. There's a worked example if you want to see the order play out.

The 2027 rule for gas hot water

From 1 March 2027, existing Victorian homes must replace a gas hot water system with an efficient electric one, such as a heat pump, when it reaches end of life. For owner-occupiers the rule bites when the gas unit breaks and cannot be repaired: a repairable system can still be repaired. Rentals go further, with a broken, unrepairable hot water appliance replaced by a heat pump water heater.

The government says there are a range of exemptions where electrifying is impractical or costly, and there's no requirement to give up a gas cooktop or gas heating. If your gas unit is near the end of its life, pricing a heat pump now, while both rebates are open, beats deciding on the day it fails. The 2027 rule in full.

How to claim

  1. Check your eligibility on the Solar Victoria website.
  2. Get quotes from authorised retailers for a product on the approved list.
  3. Your retailer applies both reductions, and you pay the balance.

Run your own numbers in the calculator, or compare Victoria with the NSW discount if you're weighing up a border property.