A Victorian household replacing an old electric or gas hot water system with a heat pump can draw on three separate incentives: federal STCs, Victorian Energy Upgrades (VEECs) and a Solar Victoria rebate. They are run by three different bodies, with three different sets of rules, and they reach you in three different ways. Used together, they can take a large slice off the price of a system. Used badly, they produce a quote that does not add up.
This guide walks through how the stack is built, in what order the discounts apply and what you should ask your installer to put in writing. It is written for homeowners, with notes for installers who want to quote it cleanly. Where a figure depends on a state scheme, we describe the mechanism and tell you where to check, because the details move.
The three layers
Layer 1: Federal STCs
Eligible air-sourced heat pump water heaters earn STCs under the Small-scale Renewable Energy Scheme. The count is set by the registered model, your climate zone and the installation type, not by a simple formula. At the time of writing STCs have been roughly $38 to $40 each. A unit earning 25 STCs would be worth roughly $950 to $1,000, which is illustrative only. See how many STCs a heat pump earns and our guide to heat pump hot water STCs.
Layer 2: Victorian Energy Upgrades
VEU is run by the Essential Services Commission. For a qualifying water heater replacement an accredited provider can create VEECs, which are sold to energy retailers. VEEC spot has been roughly $85 to $95 in 2026, with a record near $110, so each certificate is worth more than an STC, but the number created per job is different and set by the activity rules. The result reaches you as a discount. The scheme has its own conditions on the product, the system being replaced and sometimes the age of the property or a minimum customer contribution. See how heat pump VEECs work in Victoria.
Layer 3: Solar Victoria
Solar Victoria runs a rebate for eligible hot water systems, subject to a household income test. The combined household income cap fell to $150,000 on 1 July 2026. The rebate is a fixed amount capped at a share of the price, with a higher amount for some locally made products. At the time of writing it has been advertised at up to $1,000, or $1,400 for an eligible locally made system. Check Solar Victoria’s page for the figures that apply on your date, because they are set by the state. See Solar Victoria rebate changes from 1 July 2026.
A worked quote
This is an illustration, not a price guide. Take a heat pump with an installed price of $4,200 before any incentives.
| Line | Amount |
|---|---|
| Installed price, before incentives | $4,200 |
| Less STC discount (25 STCs at about $39) | -$975 |
| Less VEEC discount (set by the activity and the provider) | -$600 (example) |
| Less Solar Victoria rebate (if eligible, applied by installer or by you) | -$1,000 (example) |
| Price you pay | $1,625 |
The VEEC and Solar Victoria lines are shown as examples because the real figures depend on the product, the date and your eligibility. The point is the structure. Three lines come off the price, and each one comes from a different place.
The order things happen
- Quote. The installer shows the gross price and each incentive as a separate line.
- Eligibility check. The installer confirms your property, your existing system and, for Solar Victoria, your household income.
- Install. The old system is removed and photographed before removal. The installation type must be recorded correctly. See installation type guide.
- Claims. The installer or provider creates the STCs and VEECs from the evidence. The Solar Victoria rebate is processed through its own process, which is either applied by the installer or claimed by the household, depending on the arrangement.
- Payment. Certificates are sold, the installer is paid, and the discounts already reflected in your price are covered.
The hot water and heat pump STC checklist lists the evidence the STC side needs.
Why they do not always stack
- The same job, different rules. STCs and VEECs can sometimes be created on the same job, but conditions apply. Our guide on VEECs and STCs on the same job explains.
- Income test. Solar Victoria may not apply if your household income is above the cap.
- Product lists. A system must be on each program’s approved list. A unit eligible for STCs is not automatically eligible for the VEEC activity or the Solar Victoria rebate.
- Property and replacement conditions. The VEU activity has conditions on what is being replaced.
- Minimum contribution. Some programs require the household to pay a minimum amount.
From the desk: the most expensive mistake in a stacked job is the wrong installation type or an unverified replacement. Photographing the old unit, its data plate and its connections before it comes out is what supports the STC claim and the VEEC activity at the same time. If the old system is gone and nothing was photographed, the evidence cannot be recreated. Insist on it, or do it yourself with your phone.
Questions to ask each installer
- Which of the three incentives are included in this quote, and which are not?
- How many STCs and VEECs are you applying, and at what dollar value each?
- Do I need to apply for the Solar Victoria rebate, or do you?
- Is there a minimum contribution or a cap on any line?
- What happens to my price if one of the incentives is refused after install?
The fifth is the one most people forget, and it is where unclear quotes show up.
For installers: quoting the stack cleanly
If you quote Victorian heat pump jobs, show each incentive as its own line, record your assumptions about price per certificate and document each eligibility check. The certificate side is where the cash flow sits. At /hot-water-stcs/ we explain how STC claims for hot water work, and /veec-trading/ covers the Victorian side. Energy Merchants pays for both on a published rate, listed on /pricing/.
What to do next
- Get a written quote with the STC, VEEC and Solar Victoria lines shown separately.
- Check your household income against the Solar Victoria cap and read the program page for current figures.
- Photograph the old system before removal.
- For the national overview, read the solar hot water rebate guide, and for the answer on state eligibility see heat pump rebate eligibility.
- Use the resources hub for the paperwork guides.