Energy efficient heating and cooling

Turning on a split system heater and cooler

The Victorian Government is investing $335.5 million over four years to provide efficient, lower cost heating and cooling for 250,000 low income and vulnerable households.

About the program

The Victorian Government's plan to invest $335.5 million over four years to provide efficient, lower cost heating and cooling for 250,000 low income and vulnerable households will improve the comfort of homes and deliver ongoing health and wellbeing benefits. In addition to saving on their heating costs, households will benefit from efficient cooling to deal with summer heat stress.

Rebates and grants will be provided through Solar Victoria to help households install high-efficiency reverse cycle air conditioners, replacing inefficient heaters. This is expected to deliver annual energy bill savings to households of around:

$300 a year for those upgrading from a gas heater
$680 a year for those replacing inefficient electric heating
$900 a year for those replacing LPG heating.

The program will provide a base rebate of $1000 towards the cost of installing high efficiency heating and cooling (average cost $1700). Some upgrades may also be eligible for a Victorian Energy Upgrade incentive.

These upgrades will also provide broader environmental benefits, reducing greenhouse gas emissions and improving local air quality.

The program will be available to low income and vulnerable households, such as concession card holders, and targeted to ensure the program helps those who need it most.

Eligible households and social housing providers across the state will be able to apply for this program in 2021.

Register your interest

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FAQs

The Victorian Government will provide rebates to help 250,000 households install an efficient reverse-cycle heater and cooler to replace their old gas, electric or wood-fire heater. This will reduce bills, improve comfort and health, create jobs and slash emissions.
- $300 for those upgrading from a gas heater (est. 60-65 per cent of upgrades)
- $680 for those replacing inefficient electric heating (est. 20 per cent of upgrades)
- $900 for those replacing LPG heating (est. 5-10 per cent of upgrades)
- $70 for those replacing an inefficient Reverse Cycle Air Conditioner (est. 5-10 per cent of upgrades).
In addition to saving on heating costs, households will benefit from improved comfort, including by having efficient cooling to deal with summer heat stress. Improving comfort for households in summer and winter will also provide important health benefits.
The program will be available to low income and vulnerable households, targeted to ensure the program helps those who need it most.

Eligibility criteria will be developed in close consultation with industry and welfare groups. Social and not-for-profit community housing providers will also be eligible to apply for this program on behalf of their tenants.
The program will provide a base rebate of $1000. Households may also be eligible for a Victorian Energy Upgrade incentive.
The average reverse-cycle heater and cooler costs approx. $1700, including installation.
Eligible households will be able to install an efficient reverse cycle air conditioner that provides low-cost heating and cooling. Eligible heaters will need to meet a minimum 4 star energy performance standard – eligible products will be listed on Solar Victoria’s website and only products on the list will be eligible for a rebate.
To be eligible for a rebate, a household must be replacing an existing heater, or have no fixed heating installed.

The program will be promoted towards households:
- Without suitable heating
- Replacing an old gas heater, including ducted heating
- Replacing wood-fire heaters
- Outdated reverse cycle systems
- LPG heating.
Yes, wood-fired heaters will be eligible for replacement. Replacing wood-fired heaters with an efficient reverse cycle heater and cooler will provide health benefits by improving local air quality.
The old, inefficient system must be decommissioned. Removal will be at discretion of householder and by agreement with installers to avoid unnecessary “make good” costs.
The licensed installer installing the system will need to certify that the existing system has been de-commissioned.
The program will commence in 2021, with further details to be announced in due course.
The rollout of the program will be designed with leading industry and welfare agency experts to ensure it reaches those who are most in need. A variety of delivery mechanisms will be considered, including the successful Solar Homes online platform and its existing community housing provider program.
No – households must confirm they are eligible before buying a heater, and rebates will not be paid retrospectively.
We will be working with retailers, industry, unions and community groups to design a mechanism that makes it easy and efficient to access and install an eligible system. Further details on how to buy a system will be provided in due course.
The rebate will be available to replace a heater in the main living area. It will also be available to households that have no fixed heater in the main living area.
Yes - reverse cycle air conditioners are the most efficient, proven technology that costs less to run and delivers dual benefits of heating and cooling.
Yes – up to 100,000 systems will be available in the first year of the program.
Rental properties are eligible. Landlords may apply to upgrade heaters in their rental property to benefit low income renters. Renters will be encouraged to work with their landlords to upgrade heating and cooling on the property
The program will support households over 4 years.
Upgrades of occupied homes can currently be undertaken where it is possible to create a physical barrier between workers and occupants and/or the occupier can vacate the premises for the duration of the internal work. All providers will have COVID Safe Plans in place to manage risks.
Reverse cycle air conditioners can only be installed by air conditioner installers licensed by Energy Safe Victoria or the Victorian Building Authority. Plumbing and gasfitting work can only be done by plumbers licensed by the Victorian Building Authority. All installations in Victoria are required to have a compliance certificate.
About 1 million reverse cycle heaters/air conditioners are sold in Australia each year. Supply should not be a problem. We will work with relevant retailers to ensure adequate supply of eligible appliances in Victoria.
The program will be delivered by Solar Victoria and build on the successful safety measures put in place to protect consumers and workers under that program. Installations in Victoria are only permitted by licensed installers and must include a compliance certificate. Regulators including Energy Safe Victoria, Victorian Building Authority and WorkSafe Victoria will step up their regulatory activity to ensure Victoria’s high safety standards are maintained.
The heater rebate will only be available for reverse cycle air conditioners that meet specified eligibility criteria – this will include demand response capability and 4 star efficiency. This requirement will be regularly reviewed to encourage manufacturers to incorporate demand response capability.
Demand response trials and connection to existing demand response programs will encourage households receiving a rebate in certain areas to participate in demand response.

Solar Victoria will promote the rebate to households who have previously taken up the Solar PV rebate. This will encourage the ‘self-consumption’ of on-site generation for heating and cooling.

Reviewed 04 December 2020

Energy efficient heating and cooling

The Victorian Government is investing $335.5 million over four years to provide efficient, lower cost heating and cooling for 250,000 low income and vulnerable households.

On this page:

About the program

Register your interest

FAQs

What has been announced?

How much can I expect to save on my heating costs by upgrading my heating and cooling through this program?

What other benefits will there be for my household?

Who will be eligible?

How much is available to support an upgrade?

How much does it cost to install a heater?

What type of heaters can be installed?

What type of system is eligible to be replaced?

Will wood-fired heaters be eligible for replacement?

What happens to my old heater?

Who will be responsible for ensuring the existing system is de-commissioned?

When will the program start?

How do I apply?

Can I buy a heater now and get reimbursed later?

Where can I go to buy a new heating/cooling system?

What if I already have a heater or air conditioner?

Will only reverse cycle air conditioners be supported?

Is there a cap on the number of applications per year?

Are renters eligible for this program?

How long will the program be open?

Will heater installations be able to proceed if there are coronavirus (COVID-19) restrictions?

Who can install a reverse cycle air conditioner to qualify for the rebate?

Will there be enough supply of heaters?

How will the government ensure the program is rolled out safely?

Will the heaters be required to have demand response capability?

How will consumers be supported to make the most of their efficient electric heating system?

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