The VEU discount for replacing gas or electric heaters

The single most useful thing to know about the Victorian Energy Upgrades heating discount is this: do nothing to the old heater until an accredited provider has seen it. The discount depends on proving what was there, and a heater that has already gone to the tip proves nothing.

With that said, here is how the space heating and cooling activity works for a house, drawn from the Essential Services Commission's activity guide (version dated 15 April 2026) and its program updates.

Start with what you are heating with now

The activity is built around "decommissioning scenarios". In plain words, the discount depends on which old heater is taken out. For a home, the main ones are:

• a ducted gas heater that is the main heating for the house
• a gas space heater that is not ducted, such as a wall furnace or a room heater
• a hard wired electric room heater, such as a panel heater, that is the main heating
• central electric heating serving at least 100 square metres, or a slab heater
• an old ducted reverse cycle system that is the main heating
• an old split system reverse cycle unit

Several of these also allow a cooling only air conditioner to be taken out at the same time, as long as that air conditioner is not in a bedroom. There is also a scenario where nothing is taken out, with tighter limits.

Note the words "hard wired". A plug in heater you carry from room to room is not on the list.

What the new system has to be

The new unit must be a high efficiency reverse cycle air conditioner listed on the VEU Register of Products. For newer models, the program checks heating and cooling performance against the Residential Cold Zone figures on the federal energy rating system, which suits our part of the state. From 31 March 2025 it also needs a warranty against defects of at least five years.

For a multi split system, every indoor unit must be from the same manufacturer as the outdoor unit.

What has to happen to the old heater

• It must be connected to its gas or electricity supply before it is decommissioned, unless it was disconnected for safety reasons.
• It must be made safely and permanently unusable, then removed where that is practical and safe.
• The installer photographs it in place first, showing brand, model and serial number, and for gas, photographs the gas pipe sealed or capped.
• Gas work is done by a licensed gasfitter, electrical work by a licensed electrician, and refrigerant work by someone holding the right refrigerant handling licence.

You, the installer and the provider each sign a declaration that the old heater was not put in just to be taken out again.

Limits per house

The house must not have been finished within the two years before the work. For homes, the guide allows one ducted system per premises, and up to five split systems where old heaters are being taken out. Only one new product counts for each old one removed. Only one hard wired electric room heater can be claimed per house, but more than one ducted gas heater can be taken out where a house has two, within those limits.

The co-payment

You must pay part of the price yourself, and the provider cannot refund it in any form. At the time of writing, per installed unit including GST:

• $200 for a single split under 10 kW
• $1,000 for a single split of 10 kW or more
• $1,000 for a ducted system or a multi split

The Essential Services Commission has published that from 30 September 2026 the figure for a ducted system, and for a multi split of 10 kW or more, rises to $3,000.

Before you agree

The provider or installer must give you the current VEU space heating and cooling consumer fact sheet, tell you clearly whether the system suits your house, and say whether its size matches what the fact sheet recommends. For a multi split, they must assess each room the system serves. If the conversation was all about the discount and nothing about the size of your rooms, slow down.

Where we fit

The discount itself comes through an accredited provider. What we do is design and install split systems and ducted reverse cycle across Daylesford, Castlemaine, Kyneton, Trentham and the towns between, sized for the cold. We can look at your old heater, tell you which scenario it is likely to be, and make sure nothing gets pulled out early.

If you are replacing ducted gas, read replacing old gas ducted, and whether the ducts can stay first. For the bigger picture on the certificates, see how VEU discounts work. Our split systems and ducted pages cover what we install.

Ask us about your heater through our contact page, or call 0417 734 206 between 8:00am and 4:30pm on weekdays.