The Victorian Government has announced increased rebates for Australian-made hot water systems, aiming to reduce energy bills for households while strengthening the state’s manufacturing industry.
Under the expanded Solar Victoria program, households that install eligible hot water systems made in Australia will receive a rebate of $1,400 – an increase of $400 compared to the standard $1,000 rebate for non-local systems. The higher rebate will be available from 1 July.
Energy and Resources Minister Lily D’Ambrosio said the initiative is designed to make energy-efficient upgrades more affordable for families while backing local manufacturing jobs.
“We’re on the side of Victorians – helping families cut energy costs and take back control of their bills,” D’Ambrosio 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 enhanced rebate is part of a $29.7 million investment in the 2025/26 Victorian Budget, aimed at encouraging the uptake of electric appliances across the state.
The government says that replacing older systems with efficient heat pump hot water units can save households up to $330 annually, with water heating accounting for around 30 per cent of a home’s energy use.
The popularity of heat pumps continues to grow, with installations rising by 151 per cent in the past year under the Solar Homes Program.
To date, more than 400,000 rebates and loans have been approved through the program, leading to over 310,000 rooftop solar installations across Victoria and adding 2.3 gigawatts of renewable power capacity.
The Victorian Government has stated that households will retain the freedom to choose the product that best fits their needs.
However, additional support for Australian-made options is intended to create further demand for locally produced systems, benefiting domestic manufacturers and workers.
Solar Victoria will consult with industry stakeholders and unions before the new rebate arrangements begin, including the development of criteria to confirm Australian content.
Victoria’s $39.2 billion manufacturing sector employs over 275,000 people and is a cornerstone of the state’s economy.
By linking energy incentives to locally made products, the government says it is bolstering both household savings and economic resilience.
Member for Williamstown Melissa Horne also welcomed the move, saying, “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 the rebate program is available at solar.vic.gov.au/hot-water-rebate.
