The Victorian Government has announced a bigger rebate for households that purchase an eligible Australian-made solar or heat pump hot water system starting next month.
Solar Victoria’s Solar Homes program currently offers up to a $1,000 rebate for eligible heat pump and solar hot water systems. On the weekend, Victorian Minister for Energy and Resources Lily D’Ambrosio said that will be boosted to $1,400 for eligible systems made in Australia.
“We’re on the side of Victorians – helping families cut energy costs and take back control of their bills,” said Minister D’Ambrosio. “We know there is a strong history of locally manufactured hot water products. We want to make sure local jobs are supported and that money spent in Victoria stays in Victoria.”
‘Made in Australia’ can be a bit of a tricky term as products can have major components coming from all over the place. For example, in the case of heat pump hot water systems, there are a few brands that manufacture tanks locally but the heat pump unit is imported.
As is often the case with rebate announcements, there’s still some devil in the detail to be worked through. The state government says Solar Victoria will consult with industry and unions ahead of the planned 1 July implementation, including developing local content requirements for eligibility.
It’s great to support Australian-made products. Whether all of those products and their after-sales support are up to scratch — particularly when it comes to heat pump systems — might be a different story. Of the current SolarQuotes-recommended heat pump hot water system brands, all are manufactured in China except for one. And in that case, the tank is produced locally while the heat pump unit comes from Japan.
But that doesn’t mean to say there aren’t other good systems with Australian content backed by decent warranties and solid support out there. SolarQuotes might just not have evaluated them or we haven’t seen enough feedback from installers and buyers yet.
More Heat Pump Hot Water System Rebates
Hot water heat pumps have been popular in the state says the Victorian government, with a 151 percent increase in the number of installations (assumed: this financial year) compared to the previous year.
As we reported a couple of weeks ago, Victoria’s Budget 2025/26 released on May 20 earmarked another $29.7 million investment to support up to an extra 27,000 households across the state in installing solar and heat pump hot water systems.
On a related note, the Budget gave with one hand but took away with the other. As our report mentioned, Solar Victoria’s home battery loans scheme has ended with no further funding allocated. The timing wasn’t great given the federal home battery rebate is about to kick in and will be a disappointment for households that were pinning their hopes on the interest-free loans being accessible.
However, an electric hot water system can act as a battery of sorts. With water heating representing a big chunk of energy bills for many households, even using solar panels in conjunction with a conventional electric hot water system done right can provide significant savings.
Other Hot Water Incentives In Victoria
Victorian rebates for hot water systems aren’t limited to the Solar Homes program. A Victorian Energy Upgrades (VEU) discount can also be claimed, which can be worth up to $910 when replacing a conventional resistive electric hot water system, or up to $700 when replacing an inefficient gas system with a solar-boosted hot water system or heat pump hot water heater.
To view incentive programs for hot water and other home electrification items across Australia in 2025, see our rebates and subsidies page.
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