VEU changes from 30 September 2026
The Victorian Energy Upgrades (VEU) program is changing how residential heating and cooling incentives work. For installations completed on or after 30 September 2026, multi-split rebate calculations are capped at 20kW of heating/cooling capacity, and the minimum customer co-payment rises to $3,000 for ducted and larger multi-split systems.
The two key changes
Both apply to residential heating and cooling upgrades completed on or after 30 September 2026.
Multi-split rebates capped at 20kW
Incentive (VEEC) calculations for multi-split reverse-cycle air conditioners - including multi-split ducted products - will be capped at 20 kilowatts of heating and cooling capacity. The cap applies to installations in residential premises only. Larger systems can still be installed - but any capacity above 20kW earns no additional rebate value.
Minimum co-payment of $3,000
The minimum out-of-pocket customer contribution rises from $1,000 to $3,000 (including GST) for ducted reverse-cycle systems and for multi-split systems with a heating or cooling capacity of 10kW or more - either capacity crossing 10kW triggers the higher minimum. Multi-splits under 10kW heating and cooling stay at the $1,000 minimum.
Before & after at a glance
| Before 30 Sep 2026 | From 30 Sep 2026 | |
|---|---|---|
| Multi-split incentive calculation - residential (incl. multi-split ducted) | Based on full installed heating/cooling capacity | Capped at 20kW heating/cooling capacity |
| Multi-split incentive calculation - non-residential | No capacity cap | No capacity cap (unchanged) - minimum co-payments still apply |
| Minimum co-payment - ducted reverse-cycle | $1,000 incl. GST | $3,000 incl. GST |
| Minimum co-payment - multi-split, 10kW+ heating or cooling | $1,000 incl. GST | $3,000 incl. GST |
| Minimum co-payment - multi-split, under 10kW heating and cooling | $1,000 incl. GST | $1,000 incl. GST (unchanged) |
| Minimum co-payment - single split, under 10kW | $200 incl. GST | $200 incl. GST (unchanged) |
Source: official Victorian Government document (engage.vic.gov.au)
Who's affected
Whole-home & multi-room upgrades
Households replacing ducted gas heating with a large multi-split or ducted reverse-cycle system will see smaller rebates and a higher mandatory co-payment.
Single split systems
A standard single split under 10kW for one room is largely unaffected - rebate calculations stay the same and the minimum co-payment remains just $200 including GST.
Non-residential premises
The 20kW cap applies to residential installations only - commercial and other non-residential installs are not capped. The new minimum co-payment requirements still apply, however.
Why the change?
The stated rationale is right-sizing: oversized systems can short-cycle, waste energy and deliver less comfort. Capping incentives aligns rebates with actual household heating and cooling needs.
How installers should prepare
Lock in jobs before 30 September 2026
Quotes for large multi-split and ducted jobs are worth substantially more under the current rules. Help your customers commit before the deadline.
Re-quote pipeline jobs
Any 20kW+ multi-split or ducted job that will complete on or after 30 September 2026 needs re-pricing: capped VEECs plus the $3,000 minimum co-payment.
Talk to our team
We track every ESC and VEU rule change and update our calculator and CRM so your quotes are always right. Not sure how a job lands? Ask us.
Don't get caught out by the new rules
Our compliance team keeps your quotes, VEEC calculations and customer co-payments aligned with every VEU rule change - including these ones.
Get in touch