Heat pump hot water is one of the biggest residential activities in Victorian Energy Upgrades (VEU), the program run by the Essential Services Commission (ESC). This page covers both questions people ask: how the activity works, and what the discount is.
How the activity works
An accredited provider arranges for an eligible heat pump water heater to be installed, usually replacing an existing electric or gas system. The ESC’s specification sets the product requirements, the situations that qualify, and the evidence needed. When the job meets the rules, VEECs are created in the VEU registry. One VEEC represents one tonne of CO2-e abated.
For installers, the working parts are:
- Product: the exact model must be accepted for the activity on the installation date.
- Replacement conditions: the system removed and the evidence of it matter.
- Installer qualifications: licensed plumbing and electrical work, as applicable.
- Customer consent: signed forms that match the provider’s records.
The step-by-step on counts is in how many VEECs a heat pump creates, and the basics are in heat pump VEECs in Victoria.
What the VEU discount for a household looks like
The household does not receive VEECs. The provider does, sells them, and reflects the expected value as a discount on the quote. A rough way to estimate:
VEEC count for the model x VEEC price x the share the provider passes on
VEECs have been roughly $85 to $95 in 2026, with a record near $110, so ten VEECs is in the ballpark of $850 to $950 before the provider’s costs. This is indicative and price-dependent. It moves daily and varies with the product.
Reading a quote
- Ask which model and which activity the discount assumes.
- Compare the final price, not the size of the discount line.
- Check whether STCs for a qualifying heat pump are included separately. See heat pump STCs and VEECs together.
- Solar Victoria rebates are a separate program with their own eligibility, including an income cap of $150,000 from 1 July 2026.
What this means for installers
Selling the VEECs at a locked rate takes the price risk out of a quote you have already given. Energy Merchants buys VEECs and the compliance desk pre-checks claims; see VEEC trading, pricing and the hot water STC checklist.