22 July 2024
Electrification boost: New incentives and expanded product eligibility for space heating/cooling and water heating upgrades
The Department of Energy, Environment and Climate Action (DEECA) has published new Victorian Energy Upgrades (VEU) Specifications 2018 (Version 17.0), effective from 1 August 2024.
Key updates include:
- increased incentives for space heating and cooling installations in non-residential premises (Part 6)
- expanded product eligibility for space heating and cooling (Part 6)
- expanded eligibility for water heating upgrades (Part 1 and Part 3)
- changes to cold room activities (Part 43).
Since the introduction of new electrification activities into the VEU program on 31 May 2023, over 600,000 Victorian Energy Efficiency Certificates (VEECs) have been created, with uptake continuing to increase.
More than 10,500 Victorians have switched to efficient electric heating and cooling (including over 8,500 consumers upgrading from gas heating) and more than 19,000 Victorians have upgraded from a gas water heater to a heat pump water heater.
There are now over 380 registered reverse cycle air conditioners and 140 registered heat pump water heaters available for consumers to install.
DEECA is expanding these activities to provide a further boost for electrification upgrades.
Space heating and cooling (Part 6) changes
DEECA is increasing incentives for upgrades of space heating and cooling appliances in non-residential premises, for example small businesses, aged care, hospitals, schools and universities). These upgrades have had low uptake since the new activity was introduced in May 2023.
DEECA has reviewed the heating and cooling loads attributed to non-residential upgrades and has increased heating loads as a result of this analysis. This change increases the emissions reduction and therefore incentives by up to 50% for upgrades in non-residential premises when replacing a gas appliance.
In addition to the increase of incentives for non-residential space heating and cooling upgrades, amendments have been made to ensure there is a wider range of quality reverse cycle air conditioners (RCAC) available to meet consumer demand.
The updated Specifications allow RCAC models that meet minimum ACOP/AEER requirements to be eligible for registration if registered on the GEMS database before 1 August 2024.
Water heating changes (Part 1 and Part 3)
Amendments have been made for VEU water heating activities to align the VEU program with the Victorian Gas Substitution Roadmap and Solar Homes, supporting more consumers to switch to efficient electric appliances.
Consumers can now upgrade their electric and gas boosted solar water heaters if the solar component of the system is non-functional and the system is over 5 years old.
Cold rooms (Part 43)
The cold rooms activity has had low uptake since the Part 43 activity was introduced in August 2021. DEECA has reviewed the activity and identified changes to increase incentive levels, allowing for scaling based on cold room size. Version 17 of the Specification has:
- increased the abatement for large cold rooms above 24m2 by 100%
- decreased the abatement for cold rooms below 9m2 by 50%
- introduced a minimum size requirement of 4m2 internal floor area.
Updates to the cold room activity also strengthen the definitions for ‘below zero degrees’ freezers. This ensures that incentives for emission reductions are in line with the intended use case.
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Page last updated: 23/07/24