Victorian households considering an energy-efficient air conditioner upgrade are facing increased upfront costs, with significant changes to the Victorian Energy Upgrades (VEU) program coming into effect this week. From 30 September 2026, the minimum customer co-payment for certain multi-split and ducted reverse-cycle air conditioner installations will rise to $3,000 including GST.
This policy adjustment, announced by the Victorian Government, directly impacts the out-of-pocket expenses for homeowners and businesses seeking to reduce their energy consumption through the installation of high-efficiency heating and cooling systems. The VEU program, a key state initiative, offers discounts on selected energy-efficient products and upgrades.
Under the revised VEU requirements, multi-split air conditioners with a total rated cooling capacity of 10 kW or more, and all ducted air conditioning systems, will now incur a minimum customer co-payment of $3,000 including GST. For multi-split air conditioners with a total rated cooling capacity below 10 kW, the minimum customer co-payment will remain at $1,000 including GST.
“Victorian Energy Upgrades requirements for certain reverse-cycle air-conditioner installations are changing from 30 September 2026. The following changes apply from that date. Multi-split air conditioners with total rated cooling capacity of 10 kW or more: minimum customer co-payment becomes $3,000 including GST. Ducted air conditioners: minimum customer co-payment becomes $3,000 including GST.”
While the VEU program still provides substantial incentives to improve energy efficiency, this increase in minimum co-payment signifies a shift in the cost structure for larger, more complex air conditioning installations. Consumers who may have previously budgeted for a lower upfront contribution will now need to factor in this higher expense.
The Victorian Energy Upgrades program aims to encourage the uptake of energy-saving products by offering discounts through accredited providers. These discounts are applied as a reduction in the invoice price. The program’s certificate values, which determine the discount, fluctuate with market supply and demand.
Impact on Households and Businesses
For many Victorian households, particularly those with larger homes or commercial properties requiring more substantial cooling and heating solutions, the new $3,000 minimum co-payment represents a significant increase in the initial investment. This could potentially defer upgrades for some, despite the long-term energy bill savings offered by newer, more efficient systems. The program’s intent is to accelerate the transition to energy-efficient appliances, thereby reducing overall energy demand and greenhouse gas emissions.
Historically, energy incentive values in Victoria tend to decline over time rather than increase, as programs are designed to taper as technologies become mainstream. This change, however, directly increases the consumer’s upfront contribution for specific air conditioning types, highlighting the importance of understanding current rebate structures before committing to upgrades.
Homeowners considering a broader electrification of their properties should factor in these changing rebate conditions. Comprehensive guides, such as Electrify Your Home in 2026: Real Costs, Rebates & Savings Up to $15,000+, can help navigate the various incentives available across different upgrades. The VEU program also supports other energy-saving measures, including insulation and hot water systems, which may have different rebate structures.
What This Means for Upcoming Installations
Accredited VEU providers will be required to apply these new minimum co-payment rules for installations completed from 30 September 2026. Consumers who have received quotes prior to this date for eligible systems should confirm with their installer how the new rules will affect their final out-of-pocket expense. It underscores the need for clear communication between consumers and providers regarding program eligibility and pricing. Furthermore, keeping abreast of Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia is crucial for maximising available support.
While the federal government’s broad Energy Bill Relief Fund concluded at the end of 2025, state-specific programs like VEU continue to evolve, offering targeted support for energy efficiency. These changes to VEU air conditioner requirements highlight the dynamic nature of energy incentives and the need for consumers to stay informed to make cost-effective decisions for their homes and businesses.
Comparison of VEU Air Conditioner Co-Payments (Effective 30 September 2026)
| Air Conditioner Type | Minimum Customer Co-payment (Inc. GST) |
|---|---|
| Multi-split (total cooling capacity < 10 kW) | $1,000 |
| Multi-split (total cooling capacity ≥ 10 kW) | $3,000 |
| Ducted Air Conditioners | $3,000 |