What the rule says
Solar Victoria says existing homes from 1 March 2027 must upgrade gas hot water systems with an efficient electric alternative, like a heat pump, "as they reach end-of-life".
The Victorian Government announced it on 24 June 2025. The key words are end of life: "this is about the gas system's end of life." Nobody has to pull out a gas system that still does its job.
We haven't found the regulation itself yet, only the Government's announcement and Solar Victoria's page. Check the current rules before you replace a system, and ask your plumber too.
What doesn't change
- Repairs are allowed. "Gas hot water systems can still be repaired if they break down."
- Renovations. "Gas systems can also be temporarily removed and reinstalled during renovations."
- Gas heating. "There are no changes to heating for owner occupiers."
- Gas cooking. "There are no changes to gas cooking in existing homes."
- LPG. "The use of LPG for households or business is also unchanged."
New homes
The Government also said that from 1 January 2027, "all new homes will be built all electric". If you're building, your builder and plumber will plan for that from the start.
If you rent, or you own a rental
Rentals have their own rules, in new minimum standards that start on 1 March 2027. When a rental's hot water system "permanently fails and can't be repaired", it must be replaced with "an efficient heat pump water heater or an electric-boosted solar water heater".
There are exemptions for rentals: centralised systems (common in apartments), heritage or owners corporation restrictions, and "insufficient space to install a heat pump system or rooftop solar panels". Consumer Affairs Victoria hasn't published penalties yet.
The Solar Homes rebate
Solar Victoria's hot water rebate covers eligible heat pump and solar products. It is 50% of the purchase price, up to $1,000, or up to $1,400 for products that qualify as locally made. It is worked out after any other discounts.
To be eligible you must be the owner-occupier of the home where the system goes, the property must be worth under $3 million, the household taxable income of all owners together must be under $150,000 a year, and the system being replaced must be at least 3 years old. You also need an authorised retailer and an eligible product.
If your system breaks down or is unsafe, Solar Victoria says you don't have to wait for it to confirm you're eligible before the replacement goes in.
No heat pump is "free"
Victorian Energy Upgrades discounts come through accredited businesses, and the program requires you to make a minimum payment. If someone calls or knocks saying you won't pay a thing, be careful: cold calling and doorknocking are banned under the program.
If your gas system is getting old
Find its age
The install date is usually on the label or your paperwork. The rebate needs the old system to be at least 3 years old.
Plan before it fails
A replacement you plan gives you time to compare a heat pump with electric-boosted solar, check the rebate and pick a time that suits you.
Get a hot water specialist to look
Ask whether it can be repaired, which electric options suit your house, and where the new unit would go.
Check the rebate before you sign
Confirm the product is eligible and the business is an authorised retailer, then apply as Solar Victoria directs.
Questions to ask the plumber
- Is my system at the end of its life, or can it be repaired?
- Which electric options suit my house: a heat pump or electric-boosted solar?
- Is the product eligible for the Solar Homes rebate, and are you an authorised retailer?
- Where would the new unit sit, and what else needs to change?
- Will I get a compliance certificate when the job is done?
What we would do
If your gas system still works, leave it. If it's old, start looking now rather than on the morning the shower runs cold. A planned swap means you can compare options, check the rebate properly and choose a hot water specialist, instead of taking whatever is on the van that day.