Australia’s Biggest Energy Efficiency Scheme Set For Change

Victoria’s Minister for Energy & Resources Lily D’Ambrosio recently introduced a bill into state parliament to strengthen and greatly extend the hugely popular Victorian Energy Upgrades (VEU) program.

The VEU has been in operation since 2009 and is the largest government energy efficiency initiative currently operating in Australia. The VEU plays a key role in Victoria’s transition away from expensive gas used in homes and businesses.

The program helps Victorians slash their energy bills and emissions through discounted energy-efficient products and services, while also helping to support industries providing the same. The much broader benefits include reining in energy demand, which helps to avoid the need to build new infrastructure and maintains downward pressure on energy prices. According to Minister D’Ambrosio, between 2021 and 2025 the scheme will have avoided $3.8 billion in energy system costs.

Originally the program was to finish up in 2029, but reforms that went into effect in 2023 extended it by one year. This was to align it with the Victorian Government’s emissions reduction target of between 45 to 50 per cent by 2030. Victoria brought forward its commitment to achieve net-zero emissions from 2050 to 2045 in 2023 – and now wants to have the VEU running until the end of that year as well.

The amendments give the Essential Services Commission (ESC) – which oversees the program –  additional clout. For example, to issue improvement and prohibition notices and strengthening other regulatory oversight and compliance mechanisms to help the ESC better protect consumers. It also allows for additional prescribed activities to ensure the scheme stays fit-for-purpose, and provides the ability for the development of future VEU program discounts benefiting vulnerable and low-income consumers specifically.

After its second reading last week, debate on the bill was adjourned until Thursday 3 April. The full text of the Victorian Energy Efficiency Target Amendment (Energy Upgrades for the Future) Bill 2025 can be viewed here.  On a related note, a two-year strategic review of the VEU program is also currently under way.

How The Victorian Energy Upgrades Program Works

Among the many products supported by the Victorian Energy Upgrades program are eligible clothes dryers, fridges and freezers, hot water heat pumps, insulation, energy efficient lighting, air-conditioners, pool pumps and more.

The VEU discounts are based on Victorian Energy Efficiency Certificates (VEECs), with each certificate representing one tonne of greenhouse gas emissions reduction. As with Small-Scale Technology Certificates (STCs) associated with Australia’s solar rebate, the value of VEECs fluctuates based on market conditions. In the last 12 months, VEEC values have ranged from a low of $93.90 to a high of $116 per certificate.

Also like the national solar panel rebate, the value of the VEECs (minus any admin fees) is provided as an up-front discount on an eligible purchase. The certificates, created by accredited persons under the program, are purchased by energy retailers obliged to surrender a certain number of VEECs each year. The overall target for this year is 7.3 million VEECs – representing 7.3 million tonnes of greenhouse gas avoided.

How To Get A VEU Discount

There are a few ways to go about it. One is to choose an eligible upgrade listed with the Essential Services Commission, and before purchase engage a qualified tradesperson (where required) who is partnered with an accredited provider to handle the paperwork. But even if professional installation isn’t required, an accredited provider still needs to be involved to secure the discount.

Another way is to first find an accredited provider offering the type of eligible product/service desired and then contacting that party to arrange purchase, and installation where required.

There can be a lot of products to trawl through and research – and the same goes for finding an accredited provider that can be trusted to get the job done right and for a reasonable price. But in the case of hot water heat pump systems, a short-cut is getting quotes right here on SQ for eligible products installed by eligible businesses who have been thoroughly pre-vetted; potentially saving a bunch of time and hassle.

A Victorian Energy Upgrades discount on hot water heat pumps can be worth up to around $630 off when replacing a conventional electric hot water system, or up to ~$560 when replacing a gas system. That’s in addition to the Solar Victoria rebate of up to $1,000. Victorians may also be eligible for multiple VEU discounts through the purchase of different product types.

The Victorian Energy Upgrades program performance report for 2024 hasn’t been released yet, but the report covering 2023 indicates 829,161 energy efficiency upgrades (all types) occurred in 529,222 homes and businesses – and there was a 7 per cent increase in residential upgrades compared to 2022. Since it kicked off, the VEU program has assisted more than 2.57 million households and businesses.