Victorian Energy Upgrades under scrutiny: what it means for costs
The regulator has cracked down on dodgy VEU operators as the scheme shifts to heat pumps. Here's how that affects hot water and insulation costs.
Victorian households using the Victorian Energy Upgrades (VEU) scheme should check their installer carefully, but the scheme's discounts are not going away on the information available today. According to Renew Economy, the state regulator has stepped up enforcement as the scheme moves into bigger-ticket upgrades such as heat pumps and hot water systems.
What happened
Renew Economy reports that the Victorian Liberal party has not said whether it would keep all or part of the VEU scheme. It has vowed to cancel the Gas Substitution Roadmap ban on replacing end-of-life appliances with gas. The party voted against extending the scheme by 15 years to 2045 last year, and shadow energy minister David Davis has called it broken.
The Essential Services Commission (ESC), the scheme's watchdog, says it lifted compliance monitoring about 18 months ago. According to the report:
- Enforcement action was taken against 18 businesses in 2025–26, and 10 were removed from the program. The previous year it was eight.
- There were 241 accredited businesses as of this week.
- Problems used to centre on illegal telemarketing and door-knocking. With heat pumps and hot water now a main focus, the regulator is seeing new tactics, including AI-doctored photos and documents submitted after installs.
- This year the ESC suspended one company over doctored photos, refused claims worth $4 million of certificates and made another business forfeit $6.2 million of certificates.
- So far 2.4 million households and 180,000 businesses have used the scheme. From July next year it will also house the rooftop solar rebate program, and it now covers ceiling insulation.
What it means for your costs
Nothing in the report changes the price of a job today. But the scheme is a reason to be careful about how a quote is built, because discounts are typically applied through certificates and the installer carries the paperwork risk.
Heat pump hot water. A typical mid-range install is $4,500 (usual range $3,500 – $5,850), with basic systems around $3,600 and premium units around $6,000. Our figures include GST. Federal STCs also reduce the price of heat pump hot water, and that discount steps down each year until the scheme ends in 2030, so quotes are usually quoted after STCs. See our [heat pump hot water cost guide](Heat pump hot water).
Replacing a hot water system. A like-for-like replacement typically comes to $2,100, with a usual range of $1,650 – $2,750. If your state's gas rules change, the type you choose will matter, so compare options in Hot water system replacement. Plumbing and electrical work must be done by licensed tradespeople in any case.
Solar. Rooftop solar is moving into the VEU from July next year. For now, a 6 kW system typically costs $8,900 ($6,950 – $11,600) after STCs. Victoria's Solar Homes rebate is up to $1,400, with a household income cap of $150,000 from 1 July 2026. More in our Solar panels.
How to protect yourself
- Get at least three quotes and ask each installer to show the discount as a separate line, so you can see the real price before and after.
- Check accreditation. Ask whether the business is accredited for the scheme, and don't sign at the door or over an unsolicited phone call.
- Keep your own records. Photograph the old unit, the new unit and the compliance paperwork yourself.
- Be wary of "free" offers. If a price looks far below the range above, ask what is being claimed in your name.
- Use a licensed tradesperson. In Victoria, electrical work requires a Certificate of Electrical Safety lodged by a registered licence holder.
If you already have a quote in hand, our "is my quote fair" tool will compare it with the ranges we calculate from labour hours × local rates plus materials, checked against market prices and real quotes.
What we're watching
The scheme's future depends on politics we can't predict, and the report doesn't say whether the Liberals will keep it. We'll update our guides if the rules or discounts change. Until then, assume prices stay in line with the ranges above and focus on picking an installer you can trust.