Changes to VEU commercial and industrial heat pump water heater activities and clarifying water heating and space heating and cooling activity eligibility

24 July 2025

This program update includes:

1. Overview of changes to Victorian Energy Upgrades (VEU) commercial and industrial air source heat pump water heater activities and associated updates to the VEU Registry and program documents to reflect these changes.
2. Clarification of licence and registration requirements for water heating and space heating and cooling activities.
3. Further clarification around the eligibility of certain VEU water heating and space heating and cooling upgrades.

Changes to commercial and industrial heat pump water heater activity

The Department of Energy, Environment and Climate Action (the department) has released the Victorian Energy Upgrades (VEU) Specifications 2018, Version 20.0, introducing changes to the commercial and industrial heat pump water heater activity (Activity 44).

These changes take effect on 25 July 2025 and include:

• Revised minimum product requirements:
  • products must have an average insulated storage volume greater than 700 litres; or
  • an average insulated storage volume between 425 and 700 litres, and an average heat pump thermal capacity greater than 20 kilowatts.
• Updated greenhouse gas abatement calculations used to determine the number of Victorian energy efficiency certificates (VEECs) for eligible upgrades.
• Increased minimum co-payment per Activity 44 product installed from $200 to $1,000 (including GST). 

The above changes take effect for activities with an ‘activity date’ on or after 25 July 2025.

Please refer to the revised VEU Specifications for further details of these changes.

Updates to the VEU Register of Products

We have reviewed all Activity 44 products listed on the VEU Register of Products to determine if they meet the updated minimum requirements for products that:

• no longer meet the updated product requirements have been end-dated in the VEU Register of Products and will not be eligible for installation from 25 July 2025
• meet the updated product requirements will remain listed as ‘approved’ on the VEU Register of Products and will continue to be eligible for installation after 25 July 2025.

Please review the updated VEU Register of Products to ensure that any products you intend to install remain eligible under the revised minimum product requirements for Activity 44.

Activity 44 submissions in the VEU Registry

We are currently updating the VEU Registry to reflect the changes to the VEU Specifications for Activity 44 made by the Department. While we make these updates, accredited persons will be unable to submit activities for activity 44 installations completed on or after 25 July 2025. This process is expected to take approximately 4 weeks. We appreciate your patience during this time.

We will notify industry once the VEU Registry has been updated and submissions for Activity 44 upgrades can resume.

There will be no disruption to submission of Activity 44 upgrades completed on 24 July 2025 or earlier and the previous VEU Specifications will continue to apply up until this date.

Updated activity guide and product application guide

We have published updated program documents to reflect the Activity 44 changes taking effect on 25 July 2025. These updates include:

Update program guides

• Commercial and Industrial Heat Pump Water Heater Activity Guide.
• Commercial and Industrial Air Source Heat Pump Water Heater Product Application Guide.

Updated program forms to be used for all Activity 44 upgrades carried out from 25 July 2025

• VEEC Assignment Form Template: Commercial and industrial Heat Pump Water Heater Activity (Activity 44) - Business and Non-Residential Premises.
• Product application form for product category 44 (Commercial and industrial heat pump water heater).

Clarifying licence and registration requirements for water heating and space heating and cooling activities

We have made minor updates to the training, licence and registration requirements in the activity guides for the following water heating and space heating and cooling activities, to clarify that licence obligations are set by external regulatory bodies, as required by legislation:

• Water heating activities (Activities 1, 3 and 44).
• Space heating and cooling activity (Activity 6). 

Clarifying eligibility of upgrades for water heating and space heating and cooling activities

We released a program update on 31 March 2025 to clarify eligibility of water heating and space heating and cooling upgrades (activity 6) involving the replacement and decommissioning of multiple heaters under the decommissioning scenarios.

Please see further clarification on eligibility for this activity, in response to queries received since the program update.

The commission’s position is that:

• Installation limits set for an activity under Schedule 4 of the Victorian Energy Efficiency Target Regulations 2018 apply to a premises, which is deemed to be for a site or address. For premises with multiple buildings at a site (such as a school), the installation limits apply across the entire site (not per building).
• Under activity 6, for upgrades at premises involving the replacement of one hard wired resistance electric room heater and a ducted or slab heater, only one of these heaters can be replaced and decommissioned under a decommissioning scenario.

Updates to activity guide

We have updated the Water Heating and Space Heating and Cooling Activity Guide (the activity guide) to clarify eligibility requirements as stated above.

We have also updated the activity guide to clarify that a water heater or space heater is not required to be connected immediately prior to decommissioning if the disconnection was due to safety reasons.

Where to get help

If you have any questions about this update, please contact the Victorian Energy Upgrades program support team on (03) 9032 1310 or veu@esc.vic.gov.au.