VEU REBATE SCHEME – Victorian Energy Upgrades

You can get rebates worth thousands of dollars to do away with old inefficient gas heaters and upgrade to high efficiency split system air conditioners that heat AND cool!

Rebates are added to your up front cost which means you do not have to do any of the paper work at all, we do it all!

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Heaters Eligible For Rebates

Non ducted gas heaters with no air conditioning (wall furnace/space heaters) Gas ducted heaters Gas ducted heatersGas ducted heaters with no air conditioning Reverse cycle Ducted air conditioners (lower rebates) Electric central slab heating

Figures provided are estimates only and can vary based on the exact systems chosen and the current market price of VEETs (Victorian Energy Efficiency Certificates).

VEU REBATE SCHEME

The VEU rebates are generally the same across the board for wall mounted split systems regardless of brand. There are variations on rebate price based on energy efficiency of each unit but only slightly. Our calculator is based on the Mitsubishi Electric MSZAP models which are all on the VEU rebate list. Not all brands and models are.

VEU Rebate Calculator – Estimator

Select heater being removed:

Select new split system size (kW):

4 units max.

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VEU REBATE SHCEME – Victorian Energy Upgrades

The VEU (Victorian Energy Upgrades) rebate program is a government initiative that supports households in transitioning from gas ducted heating to high-efficiency split system air conditioners. By offering financial incentives, the program makes it more affordable to replace outdated gas heaters with modern, energy-efficient electric systems that provide both heating and cooling. This not only helps reduce energy bills but also cuts greenhouse gas emissions, supporting Victoria’s shift toward cleaner, all-electric homes. There has been a lot of debate around the phasing out of gas but higher and higher bill prices ensure that homeowners are right to seek a cheaper and better solution to energy consumption in the home. Substantial rebates to do this make it a no brainer.

Disconnecting old gas heaters and installing high-efficiency split system air conditioners offers several key benefits:

Lower energy bills: Split systems use electricity more efficiently, especially with inverter technology that is great at reducing overall energy costs when compared to the cost of gas. Heating is generally used more an a daily bases through winter to heat homes during the day and at night.
Offset running costs with solar: Split systems are electric so solar panels in your home reduce running costs even further.
All in one heating and cooling: Split systems provide both heating in winter and cooling in summer, eliminating the need for separate systems. Each unit can be individually controlled, so you can set different temperatures for different rooms or switch off unused units—saving energy and money. Wear and tear over the years is also reduced from using one system.
Improved air quality: Split systems filter indoor air and eliminate risks associated with gas leaks or carbon monoxide.
Better air quality: Most split systems include air filtration and can include air purification systems making the air you breathe in your home cleaner. Gas ducted heaters can harbour dust inside the ducting if not cleaned regularly which is another ongoing cost of gas ducted heaters.
Reduced emissions: Moving away from gas cuts greenhouse gas emissions, supporting cleaner energy use.

What is a Split System Air Conditioner?

A split system AC installation is a popular choice for both residential and commercial spaces, valued for its efficient and quiet operation. Unlike traditional window units, split systems consist of two main components — an indoor unit, discreetly mounted on a wall, and an outdoor unit, typically located on the ground or roof. These units are connected by refrigerant pipes and electrical wiring, enabling the seamless transfer of heat between indoor and outdoor environments.

The indoor unit houses the evaporator coil and fan, which circulate cool air into the room during summer and warm air during winter. The outdoor unit, on the other hand, contains the compressor and condenser coil, responsible for releasing heat or extracting it from the air. This separation of components not only allows for quieter indoor operation but also provides greater flexibility in terms of installation and zoning capabilities. Split systems are particularly favoured for their ability to cool or heat individual rooms or zones, providing targeted comfort and energy savings compared to central air conditioning systems.

How does it work?

The process is very simple for the consumer!

Rebates are added to your up front cost which means you do not have to do any of the paper work at all, we do it all!

The ducted gas heater will be disconnected from the gas supply and capped off. The electrical cord will be cut. The heater cannot be reused.

You have the choice of leaving the unit in place which is generally located outside or in the roof space or under the house. The associated ducting located either in the ceiling or under the house can stay. Vents in the roof or on the floor can also stay or once our licenced tradesman disconnect the gas and electrical supply you could hire a handyman to remove the old system and also do any patch work required to holes in walls or ceilings.

Rebates on the VEU scheme vary depending on the size of the air conditioner that is replacing the old gas system. The bigger the unit in KW rating the bigger the rebate.

As an example, a 7kw split system which generally heats and cools an open plan living, dining, kitchen area can give a rebate as high as $1700.00. Combining that with up to three smaller 2.5kw bedroom size units can take the rebate to over $2000,00.

❌ Cons

1. High Running Costs

Natural gas costs rising; inefficient older units can cost 2× as much as efficient split systems.
No benefit from solar panels.

2. No Cooling

Requires separate system for summer (e.g., evaporative or ducted refrigerated cooling).

3. Lower Efficiency

Even modern units lose ~10–20% energy through ducts and exhaust.
Older systems may waste 40% or more of gas input.

4. Environmental Impact

Fossil-fuel-based; carbon emissions significantly higher than electric systems.
New builds in VIC/ACT cannot connect to gas as of 2024–25.

5. Ducting Heat Loss

Uninsulated roof spaces lead to major energy losses — especially overnight.

6. Maintenance Requirements

Annual servicing needed (carbon monoxide testing, burner cleaning, duct checks).

7. Not Ideal for Zoned Use Without Extra Cost

Zoning controllers add $1,500–$3,000; without them, it heats the whole house by default.

8. Smart Features

Wi-Fi control, scheduling, motion sensors, voice assistants (varies by model).

✅ Pros

1. Energy Efficient (High COP)

Produces 4–5 kW of heat per 1 kW of electricity (COP 4.0–5.2).
Great for reducing energy bills — even better with solar.

2. Dual Function: Heating & Cooling

One system keeps you comfortable year-round.

3. Lower Running Costs (Zoned Use)

Heat only the rooms you use.
Dramatically cheaper than central systems when used smartly.

4. Low Emissions

Especially clean when powered by solar PV or GreenPower.
Supported by current climate policy (gas phase-out in new builds).

5. Quick and Direct Heat

Rapid heat delivery with responsive fan control.

6. Easy to Retrofit

No ductwork required — good for apartments or renovations.

7. Minimal Maintenance

Just clean filters every 2–3 months.
No duct cleaning, burner servicing, or gas safety checks.

8. Quiet Models Available

Modern split systems (e.g., Mitsubishi, Daikin, Fujitsu) have whisper-quiet operation (19–25 dB indoors).

9. Smart Features

Wi-Fi control, scheduling, motion sensors, voice assistants (varies by model).

🔮 Future-Proofing Comparison

Category	Split System (Reverse-Cycle)	Ducted Gas Heating
Energy Source	✅ Electricity Increased grid greening + compatibility with solar.	❌ Gas (fossil fuel) Subject to carbon pricing and phase-outs.
Government Policy Alignment	✅ Supported by VIC/ACT energy policy. Eligible for VEECs & energy efficiency incentives.	❌ Disincentivised in new builds. Gas bans in VIC (2024+) and ACT.
Environmental Impact	✅ Very low when paired with solar. Zero on-site emissions. Helps meet net-zero targets.	❌ High CO₂ emissions. Combustion-based heating is under pressure globally.
Cooling Integration	✅ Built-in cooling (standard in all split systems).	❌ No cooling. Requires separate ducted cooling (adds cost and complexity).
Smart Home Readiness	✅ Often Wi-Fi enabled with app control, voice assistant integration, scheduling.	❌ Typically limited to basic thermostats. Zoning requires premium upgrades.
Solar Compatibility	✅ Electricity from rooftop solar can drastically reduce running costs.	❌ Gas cannot be offset with solar. Increasing relative cost disadvantage.
Zoning / Targeted Heating	✅ Room-by-room usage = lower bills. Scales up gradually with demand.	❌ Heats entire ducted zones unless expensive zoning is installed.
Infrastructure Trends	✅ Aligns with electrification and all-electric home trend.	❌ Likely stranded asset in 10–15 years. Infrastructure no longer installed in new homes.
Resale Value Impact (Future)	✅ Increasingly attractive to buyers seeking low bills + solar compatibility.	❌ May reduce resale value due to high running costs + environmental stigma.
Availability of Skilled Technicians (Future)	✅ Growing field with increasing demand for electric HVAC technicians.	❌ Shrinking gas service sector as industry phases out gas in homes.
Rebates & Incentives	✅ Supported by VEECs, STCs, and electrification grants.	❌ Declining or no longer eligible for rebates in most states.

⚠️ Important Notes:

If you’re heating only one or two rooms, split systems almost always win.
Gas ducted systems must be zoned and used selectively to compete on cost.
Adding solar PV makes split systems vastly cheaper to run (close to $0/day in daytime use).