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VEECs and Victorian Energy Upgrades deep dive

How does the VEU space heating and cooling activity work?

Short answer

Installing an eligible high-efficiency reverse-cycle air conditioner or heater in Victoria can create VEECs under the space heating and cooling activity. The ESC's rules decide eligibility and the count, and the provider usually passes the value on as a discount.

Written and checked by the Energy Merchants desk · Reviewed 3 October 2026 · For installers and homeowners

Space heating and cooling is one of the most used residential activities under Victorian Energy Upgrades (VEU). Queries about “space heating and cooling” and “high efficiency air conditioner” point at the same thing: efficient reverse-cycle units that replace or supplement an older system.

How it works

The Essential Services Commission (ESC) publishes the activity requirements. An accredited provider carries out, or arranges, a qualifying installation and records the evidence. If the installation meets the rules, VEECs are created, each representing one tonne of CO2-e. For the installer-level detail see the VEU split system activity.

What typically matters:

  • The model. It must be on the product register for the activity, with the efficiency data the method relies on.
  • The situation. New installs and replacements can be treated differently, as can the type of system being replaced. Confirm the current rules.
  • The sizing. Capacity relative to the space matters for the calculation and for the evidence.
  • The paperwork. Customer consent, product details and installation evidence that match.

What the discount looks like

The customer sees a lower price. The provider has priced in the VEECs it expects to create. A rule of thumb is count x price x the share passed on. VEECs have been roughly $85 to $95 in 2026, so each certificate is worth about that much before costs. It is indicative only, because the count depends on the product and the property. Compare quotes on total price. See the VEU air conditioning rebate.

A more efficient model often creates more VEECs, which means a cheaper unit is not always the cheaper outcome. Ask for the quote with and without the discount.

From the desk: check the register on the install date, not the quote date. Products enter and leave.

Where claims go wrong

Model numbers that differ between the quote, the product label and the form; photos without the compliance plate; replaced units not recorded; and customers who did not sign.

What this means for installers

Know the counts for your three most-installed models and show the discount as a line the customer can see. When it comes to selling the VEECs, see VEEC trading, pricing and VEEC payment times. The wider picture is in how VEECs work.

Follow-up questions

People also ask

How much is the VEU discount for an air conditioner?
It depends on the model, what it replaces and the VEEC price. With VEECs at roughly $85 to $95 in 2026, even a small number of certificates is meaningful, but the count comes from the product register.
Is a high-efficiency air conditioner the same as space heating and cooling?
In practice they sit in the same activity. The efficiency of the model drives the result.

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