Victorians will soon get more money back when they choose Australian-made hot water systems, with the Allan Labor Government offering an extra rebate to households opting for local products under the Solar Victoria scheme.
From 1 July, the rebate for eligible Australian-made systems will rise to $1,400—$400 higher than the existing rebate for other models. The move is aimed at encouraging more households to switch to efficient, electric hot water systems, while simultaneously strengthening Victoria’s manufacturing sector.
The new rebate is part of a $29.7 million commitment in the Victorian Budget 2025/26, which targets energy savings at the household level. Installing a heat pump hot water system, the most popular option in the program, can reduce electricity bills by up to $330 annually. For many families, water heating accounts for around 30 per cent of household energy use, making it a major opportunity for savings.
The Solar Homes Program has already driven a sharp uptake in energy upgrades across the state. Installations of hot water systems saw a 151 per cent jump in the last year alone. Since the program’s launch in 2018, more than 400,000 rebates and loans have been approved, helping deliver over 310,000 rooftop solar systems across Victoria—contributing 2.3 gigawatts of clean power.
Victorians still retain choice in what hot water system they install, but those choosing to support local manufacturing will now be rewarded for it. The Government has stated that consultation with unions and industry stakeholders will begin ahead of the changes to determine how ‘local content’ will be defined and validated.
Minister for Energy and Resources Lily D’Ambrosio said the policy was both about household budgets and local jobs. “We’re on the side of Victorians—helping families cut energy costs and take back control of their bills,” she said. “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.”
The rebate increase aligns with broader ambitions to electrify homes and reduce reliance on gas while also delivering flow-on benefits to Victoria’s $39.2 billion manufacturing sector, which supports over 275,000 jobs.
Member for Williamstown Melissa Horne added that the rebates can make a clear difference. “We’re helping families slash their energy bills with more discounts for energy-efficient hot water, which can save them up to $1,300 off installation costs if they buy local—and save $330 on their bill each year.”
More information on eligibility and applications is available at solar.vic.gov.au/hot-water-rebate.
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