Heat Pump Hot Water Rebates

Heat pump hot water rebates play a big role in reducing the cost of heat pump installations.

Rebates are often worth $2,500 or more, so they drastically increase the appeal of heat pump hot water units.

But the rebates are often misunderstood. Many customers don’t understand how the rebates work and whether they apply.

Below, we set everything you need to know about heat pump hot water rebates and make it easy for you to understand.

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There are three rebates that apply to heat pump hot water units in Victoria.

Small-scale technology certificates (STCs)
Victorian energy efficiency certificates (VEECs)
The Solar Victoria hot water rebate

Let’s dive in…

1. Small-Scale Technology Certificates (STCs)

Small-scale technology certificates (STCs) are the easiest of the three rebates: they apply to any eligible heat pump that is installed. Unlike the other two rebates below, all we need to do to claim STCs is to demonstrate that an eligible unit has been installed. That is, anyone looking to installing a heat pump will be eligible for STCs.

The value of STCs varies from state-to-state.

Heat pump installations in colder climates such as Victoria are eligible for more STCs than installations in warmer states. In 2026, Victorian installations (Zone 4) are eligible for between 14 and 16 STCs. STCs are worth $40, so the value of these STCs is between $560 and $640. The number of STCs depends on the unit installed (some are deemed to be more efficient, and will therefore attract more STCs).

The number of STCs for a heat pump installation decreases each calendar year and is currently expected to be phased out by 2030. So if you’re considering a heat pump in December, make sure you install it quickly as it will cost about $150 more (the value of the lost STCs) if installed in January.

STCs are a federal government initiative, regulated by the Clean Energy Regulator.

Some installers use intermediaries to claim STCs. These intermediaries take a cut, so the STC value so might appear on another quote as worth less than $40. Powrhouse used to use an intermediary and we’d pass on STCs at $37.45. Now we claim the STCs directly through the Clean Energy Regulator and pass on the full value to customers.

2. Victorian Energy Efficiency Certificates (VEECs)

Victorian Energy Efficiency Certificates (pronounced “veeks”) are effectively the Victorian government’s version of STCs. Heat pump hot water installations are eligible for VEECs where an eligible heat pump is being installed to replace specific existing hot water services including:

electric resistance
gas (or LPG) instant and
gas (or LPG) storage hot water units
electric or gas boosted solar hot water systems – if they are more than 5 years old, are out of their warranty period and have ‘non-functioning’ components.

Installing a heat pump to replace an existing heat pump, or no replacement at all, are not eligible for VEECs.

Heat pumps are eligible for between 6 and 9 VEECs, or at $75 per VEEC, $450 to $675. Like STCs, more efficient heat pumps will attract more VEECs (but don’t let that be the basis of your decision).

VEECs and STCs are not means tested, so they are available to everyone with a maximum of 2 claims per house.

Like STCs, many installers will use an intermediary to claim VEECs and pass on a lower rate. Powrhouse claims VEECs directly from the Essential Services Commission and passes on the full value to customers.

3. Solar Victoria Hot Water Rebate

As well as VEECs, the Victorian Government offers a $1,000 rebate (or $1,400 on some models) on eligible heat pump hot water installations. This is the rebate that is means tested.

If you are eligible, your installer (hopefully Powrhouse 😁) will lodge the Solar Victoria rebate application on their end. You will then receive an email inviting you to complete the application. You and the installer will be notified when approved and then you can schedule installation. If your current unit is leaking and you need to move more quickly, you and the installer can mark the rebate application as an emergency and you don’t need to wait for approval.

The rebate is typically $1,000, but is $1,400 for “Australian-made units” to encourage local manufacturing. We only like the Reclaim, Rinnai and Rheem heat pumps that are Australian-made – we’re not convinced about the rest.

There is no guidance as to how long the Solar Victoria rebate will last. The website routinely updates with “1,760 rebates available this release,” but in my view, that doesn’t really mean anything. They keep releasing more rebates and I can’t see it stopping with the current government’s focus on helping households get off gas.

How to Claim Heat Pump Hot Water Rebates

STC and VEECs are really easy to claim – you don’t really need to do anything. Installers will simply reduce your invoice by the amount of the rebates. All you need to do is sign an “Assignment Form” which assigns the right to claim the rebates to the installer. The rest is up to the installer.

I strongly discourage customers claiming the rebates directly. It will take a long time, you’ll be inundated with paperwork to open various accounts and because you only have one claim, you’re likely to get poorer pricing.

What if I’ve Had Other Rebates?

We are commonly asked “I received a battery rebate, can I still get the hot water rebate?”

There are plenty of other rebates around, especially for solar and batteries.

The good news is the answer is almost always “yes.”

STCs and VEECs are independent of any other rebates.

The only case we see where customers are not eligible for heat pump rebates is where a customer has previously received a solar battery rebate under the Solar Homes program. This is an old rebate that was available many years ago, and is not to be confused with the very popular more recent battery rebate announced in June 2025 (that comes under the STC program).

If you’re unsure, it’s best to investigate. When we start the rebate application process, we input the customer’s address. The application will not be able to proceed the address has already received a rebate. There’s no harm in trying.