The Victorian Energy Upgrades (VEU) program, run by the Essential Services Commission, pays incentives for replacing inefficient hot water systems with efficient ones. For heat pumps, the incentive arrives in the form of VEECs.
How it works in practice
An accredited provider carries out a qualifying activity, records the evidence and creates VEECs in the VEU registry. The VEECs are then sold to liable energy retailers, usually through a trader. VEEC spot has been roughly $85 to $95 in 2026, with a record near $110, so it can be material per job. It moves, so check the live market rather than relying on last quarter.
Typical conditions in activity specifications include:
- The product must be on the approved list for the activity.
- The system being replaced must meet the replacement conditions.
- The installer and the accredited provider must follow the evidence and record-keeping rules.
- Customer consent and a signed form are required.
Exact counts and conditions change with the program’s specifications. Always read the current activity page from the Essential Services Commission.
Combining with other incentives
A heat pump may also qualify for STCs under the federal small-scale scheme. Whether both can be claimed on the same job depends on the rules in force. Our guide to VEECs and STCs on the same job works through the logic, and the heat pump STC explainer covers the federal side.
Questions to settle before you quote
Before offering a Victorian customer a heat pump with a VEEC discount, confirm four things. Is the exact model listed for the activity? Does the customer’s existing system meet the replacement conditions? Is your business, or your partner, an accredited provider with capacity to claim? And what will you do if the VEEC rate has moved by the time you lodge? Settling these in advance keeps the discount you promised and the margin you need from colliding at the end of the job.
What this means for installers
If you install heat pumps in Victoria, work out the VEEC and STC position before you quote, not after. The VEEC trading page explains how we buy VEECs, the hot water STC page covers the federal certificate, and the hot water checklist lists the paperwork.