Heat Pump Hot Water Rebates in Victoria 2026: What You Can Claim

Heat pump hot water systems are one of the most efficient ways to heat water in Victoria — they use roughly a quarter of the electricity of a standard electric storage system by extracting heat from the ambient air. And thanks to state and federal rebate programs, upgrading to a heat pump is more affordable than many Morwell households realise. Here's what's available in 2026 and how to claim it.

Victorian Energy Upgrades (VEU) Program

The Victorian Energy Upgrades (VEU) program is the biggest single discount available when replacing an electric storage hot water system with a heat pump. Under the VEU program, the upgrade generates Victorian Energy Efficiency Certificates (VEECs), which are purchased by energy retailers to meet their efficiency obligations. The value of those certificates is passed on to you as a discount on the installed system — often reducing the upfront cost by a substantial amount.

To be eligible, you generally need to be replacing an existing electric storage hot water system (not gas, and not a brand-new installation where there was no system before). The heat pump must be an approved model on the VEU product register. We handle the paperwork and certificate creation as part of the installation, so the discount is applied to your quote up front — you don't have to wait for a rebate.

Solar Victoria Hot Water Rebate

Solar Victoria offers a separate hot water rebate for eligible households installing solar hot water (not heat pumps — solar thermal systems with roof collectors). The rebate is up to 50% of the system cost, capped at $1,000, with an optional interest-free loan for the remaining amount. Eligibility is generally based on household income, property value, and whether you've previously received a Solar Victoria rebate. If you're weighing up a heat pump versus solar hot water, we'll explain the difference and which rebates apply to each.

Federal STCs (Small-Scale Technology Certificates)

Some heat pump and solar hot water systems also attract federal Small-Scale Technology Certificates (STCs) under the Renewable Energy Target. Like VEU certificates, STCs are created based on the system's expected energy savings over its lifetime, and their value is applied as a discount on the installed price. Your installer (that's us) handles the STC creation and applies the discount to your quote.

Stacking the Rebates

In many cases, multiple rebates can be combined — for example, a heat pump upgrade may attract both VEU certificates and federal STCs, substantially reducing the out-of-pocket cost. The exact combination depends on the system, your existing setup, and current program rules, which change periodically. We'll assess your situation and tell you exactly what you can claim before any work begins.

Is a Heat Pump Right for Your Morwell Home?

Heat pumps work well in the Latrobe Valley's climate — they're effective down to near-freezing temperatures, and Gippsland winters rarely get cold enough to significantly reduce their efficiency. They're a particularly good upgrade for homes currently running expensive electric storage systems on peak tariffs. If you're on off-peak electric, gas, or have solar panels, the calculation is a little different, and we'll talk you through the numbers for your specific situation.

Curious whether a heat pump makes sense for you? Call us or book online and we'll assess your current system, explain the rebates you're eligible for, and give you an upfront price on a fully installed upgrade.