Melbourne has more ducted gas heaters per household than almost any other city in Australia — and in 2026, nearly every one of them is more expensive to run than a modern reverse cycle air conditioner. The Victorian Energy Upgrades (VEU) program was designed precisely for this transition. It gives Melbourne households up to $5,530 off the cost of replacing their ducted gas heater with an efficient reverse cycle system — applied directly at invoice by Greentastic with zero government paperwork for you to complete.

This guide explains exactly what the rebate covers, what you’ll receive, what it costs out-of-pocket after the rebate, and how to book your free assessment. All figures are sourced directly from energy.vic.gov.au — the official Victorian Government source.

What Is the VEU Program and How Does the Rebate Work?

The Victorian Energy Upgrades program is administered by the Essential Services Commission (ESC) and has been running since 2009. It works through a certificate trading system: when a VEU accredited provider like Greentastic installs a qualifying energy-efficient system, they create Victorian Energy Efficiency Certificates (VEECs) — one certificate per tonne of greenhouse gas emissions avoided. Those certificates are sold to electricity retailers who must meet annual emissions targets, and the value is passed directly to you as an upfront discount on your installation cost.

As of March 2026, VEEC certificates trade at approximately $85 per certificate. The larger your new system and the more gas appliances decommissioned, the more certificates created, and the higher your upfront discount.

Importantly, the VEU program was extended to 2045 by the Energy Upgrades for the Future Act 2025 — meaning this program will continue delivering rebates to Victorian households for the next two decades. However, VEEC prices fluctuate, and the exact discount you receive today may differ from future values.

How Much Is the VEU Rebate for Ducted Gas Heater Replacement?

According to the Victorian Government’s official heating and cooling discounts page, here are the current VEU rebate ranges for ducted gas heater replacements in 2026:

DUCTED GAS → MULTI-HEAD SPLIT

Up to $7,200 discount

Replaces ducted gas with 3–6 head split system · Source: energy.vic.gov.au + industry data

DUCTED GAS → DUCTED REVERSE CYCLE

Up to $5,530 discount

Like-for-like ducted replacement · Saves up to $1,140/yr · Source: energy.vic.gov.au

GAS WALL HEATER → SPLIT SYSTEM

Up to $1,610 per unit

Each heater generates separate VEECs · Up to 5 claims per property

Note: The exact rebate you receive depends on system size (kW), the specific model installed, your location in Victoria, and the current VEEC market price. Greentastic provides a fixed-price written quote with the rebate clearly itemised before you commit to anything.

VEU Rebate Eligibility — Who Qualifies?

The VEU program is intentionally broad. According to the ESC eligibility guidelines:

All Victorian households and businesses qualify — there is no income test, no asset test, and no property value cap
The property must be more than two years old from construction completion
You must have an existing ducted gas heating system to be decommissioned as part of the installation
The replacement system must appear on the VEU Register of Products under category 6(23)
Installation must be completed by a VEU Experienced provider — Greentastic holds this accreditation
A minimum customer contribution of $1,000 inc. GST is required for multi-split and ducted systems — the system cannot be provided at zero cost
Effective 31 March 2025, all installed products under the VEU program must include a 5-year warranty against defects — all Greentastic-supplied systems comply

Step-by-Step: How to Claim Your VEU Rebate with Greentastic

Book your free home assessment — call 1300 001 392 or visit greentastic.com.au. Greentastic sends a specialist to inspect your existing gas heater, assess your home, and confirm VEU eligibility. No cost, no obligation.
Receive your fixed-price quote — your written quote shows the full gross installed price, the VEU discount applied, and your net out-of-pocket cost. You can compare systems from Daikin, Mitsubishi Electric, Fujitsu, Panasonic, Carrier, and Midea.
Choose your installation date — standard bookings are 3–7 business days. Emergency replacements available. See also our guide: How to Prioritise Home Energy Upgrades in Melbourne for Maximum ROI.
Installation day — Greentastic’s licensed team installs your new reverse cycle system and safely decommissions your gas heater. Ducted systems typically take 2–3 days; multi-head split systems 1–2 days.
Compliance certificates issued — Electrical Certificate of Safety (CoES) provided. All VEEC paperwork is managed entirely by Greentastic. You sign a customer consent form — that’s it.
Enjoy lower bills from day one — up to $1,140 per year saved on heating, and if you disconnect from gas entirely, an additional $300–$400 per year in fixed gas supply charges eliminated.

Gas vs Reverse Cycle: The Real Running Cost Difference

A ducted gas heater operates at roughly 85–92% efficiency — meaning roughly $0.88 of every $1 spent on gas becomes useful heat. A modern reverse cycle air conditioner operates at a Coefficient of Performance (COP) of 3.0–4.5, delivering $3.00–$4.50 of heating for every $1 of electricity. This 3–4× efficiency advantage is the fundamental reason Melbourne households save so much after switching.

Victoria’s gas prices have risen by over 41% for households since 2019 according to the Victorian Government’s Gas Substitution Roadmap Update. As Bass Strait reserves deplete and Victoria imports LNG at international market rates, gas price pressure will continue. Reverse cycle air conditioning runs on electricity that can come partly from your own solar panels — gas never can.

Annual Running Cost Comparison — Typical 4-Bedroom Melbourne Home
Ducted gas heating (existing)	$1,800–$2,400 per year
Reverse cycle ducted (new)	$700–$1,000 per year
Annual saving (VG figure)	Up to $1,140 per year
Gas supply standing charge (if disconnecting)	$300–$400 per year — eliminated entirely
Cooling (gas heater)	Nil — gas heaters heat only
Cooling (reverse cycle)	Full cooling capability — same system, no extra cost
CO² emissions (gas)	~3–5 tonnes CO²e per year from space heating
CO² emissions (reverse cycle, Vic grid 2026)	~0.8–1.2 tonnes CO²e per year

Why Act Before March 2027? The Regulatory Context

Victoria’s Building and Plumbing Amendment Regulations 2025 set a series of critical dates that Melbourne homeowners should understand:

1 January 2027: All new homes built in Victoria must be all-electric. No new gas connections permitted for new builds.
1 March 2027: For rental properties and public housing, when a gas heater or hot water system reaches end-of-life, it must be replaced with an efficient electric alternative. This is a legal obligation for landlords — not a choice.
1 March 2027: For all existing homes, gas hot water systems at end-of-life must be replaced with electric alternatives. Note: there is currently no requirement for owner-occupiers to replace working gas space heaters — but early action secures maximum rebate value.

Source: Victoria’s Gas Substitution Roadmap — planning.vic.gov.au

For owner-occupiers, acting now — while your heater is still working — means you choose the timing, the system, and the brand. You avoid the installation surge that is expected as the 2027 deadline approaches, and you start saving immediately.

Which Replacement System Is Right for Your Melbourne Home?

Option A: Multi-Head Split System (Most Popular — Highest Rebate)

One outdoor unit connected to 3–6 indoor wall-mounted heads. Room-by-room independent control. No ductwork required. VEU rebate up to $7,200. Best for: homes replacing ducted gas where ductwork is old or impractical; maximum per-room energy efficiency; precise zone control. See also: Reverse Cycle Systems with Ducted Heating Upgrades and VEU Rebates.

Option B: Ducted Reverse Cycle Air Conditioner (Like-for-Like Replacement)

Whole-home coverage through ceiling vents using existing or new ductwork. Single controller with zone control available. VEU rebate up to $5,530. Best for: homes with quality existing ductwork in place; preference for invisible ceiling vents; whole-home uniform coverage. See also: Maximising Comfort — Upgrading Gas Heating Under the VEU Program.

Option C: Individual Split Systems Per Room

Single split system replacing each gas wall heater. VEU rebate up to $1,610 per unit. Best for: homes replacing individual gas wall heaters; smaller homes; targeted room heating only.

Frequently Asked Questions — AEO Optimised

Does the VEU rebate apply to new air conditioning installations without a gas heater to remove?

Yes, a smaller VEU discount is available for new installations even without replacing a gas heater. However, the highest rebates — up to $7,200 — apply specifically when removing an existing gas ducted or gas wall heater. See our related guide: Can I Get a VEU Rebate for a New AC Installation if I Don’t Have a Gas Heater to Replace?.

Can tenants claim the VEU rebate?

Tenants may benefit from VEU upgrades with landlord agreement. From 1 March 2027, landlords in Victorian rental properties are legally required to replace end-of-life gas heaters with efficient electric alternatives — making this an ideal time for tenants and landlords to discuss the upgrade together.

How long does the installation take?

A 3–4 head multi-split installation typically takes 1–2 days. Ducted reverse cycle installation takes 2–3 days. Emergency replacements for failed heaters can often be scheduled within 24–48 hours. Contact Greentastic on 0485 952 870 for urgent bookings.

What brands does Greentastic install?

Greentastic installs VEU-approved systems from Daikin, Mitsubishi Electric, Fujitsu, Panasonic, Carrier, and Midea. All installed systems carry the mandatory 5-year VEU warranty plus manufacturer warranties. See our brand comparison: Daikin vs Mitsubishi vs Fujitsu — Best Reverse Cycle AC for Melbourne 2026.

Will replacing my ducted gas heater increase my electricity bill?

Your electricity bill will increase slightly as your reverse cycle system adds to your household load. However, your total energy bill — gas + electricity combined — will fall by up to $1,140 per year (Victorian Government figure). If you also disconnect from gas, the $300–$400 annual gas supply charge saving further reduces your combined bill.

🔗 Related Greentastic Articles

📚 Government & Official Sources

📞 Book Your Free Energy Assessment with Greentastic
Call: 1300 001 392 | Direct: 0485 952 870 | info@greentastic.com.au
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⚡ Quick Answer — Directly Answers Your Search
What is the rebate?	Up to $5,530 off your installation when you replace a ducted gas heater with reverse cycle air conditioning under the VEU program (Victorian Energy Upgrades).
Who qualifies?	All Victorian households and businesses. No income test. No property value cap. Property must be more than 2 years old.
How is it paid?	Applied directly to your invoice by Greentastic (a VEU Experienced Provider). No government portal. No waiting for a rebate cheque.
Annual saving?	Up to $1,140 per year on energy bills vs ducted gas heating. Source: energy.vic.gov.au
How do I claim?	Book a free Greentastic home assessment → receive a fixed-price quote → rebate deducted on the day.

VEU Rebate for Ducted Gas Heater Replacement in Melbourne 2026 — What You Get, Step by Step