How to Claim Government Rebates When Installing a Commercial Hot Water System

Last updated on August 31, 2026

Quick Overview

If you are a commercial property owner, facility manager, or business operator in Australia and plan to install a commercial heat pump hot water system, you may qualify for a government incentive that can reduce your upfront cost. The rebate amount and eligibility depend on your state, existing hot water system, heat pump, and the scheme that applies to your project.

The basic process is:

Identify the applicable incentive 👉 check the existing system and proposed upgrade 👉 confirm the heat pump is eligible 👉 prepare the required evidence 👉 use the required provider or installer 👉 complete the installation 👉 claim or assign the incentive.

Here is your full guide to commercial heat pump hot water rebates, eligibility and the claiming process in Australia.

Commercial Hot Water Rebates At A Glance

Scheme / State	Commercial Heat Pump Support	How The Benefit Is Provided
Federal – SRES	Eligible air-source heat pumps up to 425L	STCs assigned for an upfront discount
NSW – ESS	Eligible commercial heat pump water heaters under F16/F17	Energy Savings Certificates through an accredited provider
Victoria – VEU	Eligible commercial and industrial heat pump water heaters	VEEC value through an accredited provider
South Australia – REPS	WH1 water-heater replacement or upgrade, including eligible heat pump water heaters	Incentive through participating retailers or activity providers

What Are Government Rebates For Commercial Hot Water?

Government rebates for commercial hot water are financial incentives that help reduce the upfront cost of buying and installing an energy-efficient hot water system.

They are there to remove the cost barrier many businesses face when they want to replace an old, inefficient system with a more energy-efficient option such as a commercial heat pump. These upgrades can help businesses cut energy bills and greenhouse gas emissions, while supporting Australia’s broader transition towards net zero emissions by 2050.

Depending on the government scheme, the rebate benefit may come as an upfront discount on your installer’s quote, a rebate after installation, or the value of energy certificates linked to the upgrade.

Are Heat Pump Hot Water Systems Eligible For Government Rebates?

Yes. Commercial heat pump hot water systems can qualify for government incentives because they use far less energy than conventional electric hot water systems. According to the Australian Government, a heat pump water heater can use around 30% of the energy used by a conventional electric hot water system.

That’s possible because a heat pump does not create heat through an electric heating element. Instead, it takes heat from the surrounding air and transfers it into the water. This allows it to produce hot water with much less electricity.

The large reduction in energy use can lower greenhouse gas emissions and energy demand, which is why the government has included eligible heat pump systems in several energy-efficiency incentive programs.

What Commercial Heat Pumps Qualify For A Rebate?

A commercial heat pump must meet the product, capacity, and performance requirements of the government scheme. The main requirements are as follows:

Federal Requirements: Under the federal Small-scale Renewable Energy Scheme (SRES), an eligible air-source heat pump must have a storage volume of no more than 425 litres and appear on the Clean Energy Regulator’s approved product list.
Victoria Requirements: Victoria’s VEU Commercial and Industrial Heat Pump Water Heater activity requires an average insulated storage volume of at least 425 litres. The heat pump must also meet the program’s product and performance requirements.
NSW Requirements: NSW has separate commercial activities for heat pumps. F16 covers replacement of an existing electric water heater, while F17 covers a new air-source heat pump installation. The eligible product and installation must meet the requirements of the relevant activity.
South Australia Requirements: Under REPS WH1, heat pump water heaters that meet the applicable WH1 efficiency, performance and evidence requirements can qualify.

You should therefore check the exact heat pump model, size and installation against the scheme before you buy it.

What Commercial Hot Water Rebates Exist in Australia

Commercial hot water incentives in Australia come from federal and state government schemes. The federal incentive applies across Australia, while some states provide additional support for eligible commercial heat pump upgrades.

The main incentives to check are:

# The Federal Incentive For Commercial Heat Pumps

It is a nationwide government incentive that helps businesses reduce the cost of eligible heat pump hot water systems through the federal Small-scale Renewable Energy Scheme (SRES).

The SRES is the primary federal incentive for eligible air-source heat pump water heaters and applies across Australia. It provides support through Small-scale Technology Certificates (STCs), which have a monetary value.

When your business installs an eligible heat pump, the system can create STCs. You can assign those certificates to a registered agent, who provides their value as an upfront discount on the installation cost.

The amount of support depends on factors such as the heat pump, installation location, and installation date.

So, wherever your business is in Australia, the federal SRES is the first incentive to check. Your state may then offer additional support through its own energy-efficiency scheme.

# Heat Pump Rebates By Australian State

Rebate rules vary by state and can change. Check the current requirements before installation.

NSW Heat Pump Rebates

Businesses searching for a hot water heat pump rebate NSW or heat pump rebate NSW can access commercial incentives through the Energy Savings Scheme (ESS). Eligible projects can include replacing existing commercial gas or electric hot water systems with an approved air source heat pump. The exact heat pump, existing system and ESS activity determine eligibility and certificate value.

Victoria Heat Pump Rebates

The Victorian Energy Upgrades (VEU) program provides a commercial pathway for eligible heat pump water heaters. Under the current 2026 requirements, the system generally needs an average insulated storage volume of at least 425 litres, meet the VEU product requirements, and satisfy the $10,000 minimum customer co-payment.

South Australia Heat Pump Rebates

South Australian businesses may access commercial water-heating incentives through the Retailer Energy Productivity Scheme (REPS). The scheme includes WH1 for replacing or upgrading a water heater, and the activity can apply to heat pump water heaters.

You can qualify if your business uses less than 160 MWh of electricity per NMI in the 12 months before the REPS activity.

The incentive is offered through an obliged energy retailer or an activity provider working on its behalf. The providers offer different activities, prices and incentives, so check what is available for your business before installation.

How Do You Qualify For Hot Water Rebates?

You can qualify for a commercial heat pump rebate when your project meets the requirements of the relevant government scheme. In many cases, this means replacing an existing gas or electric hot water system with an eligible heat pump.

A replacement can qualify because the new heat pump uses much less energy than the old system. The scheme can therefore recognise the energy savings created by the upgrade.

However, a first-time heat pump installation can follow different rules. If a new commercial property has no existing hot water system to replace, a replacement-based incentive may not apply.

That means you should first establish what system is already at the property and what the new heat pump will replace. Your accredited provider can then confirm which incentive, if any, applies to the project.

Who Can Claim A Commercial Heat Pump Hot Water Rebate?

A business that installs an eligible commercial heat pump hot water system can claim an available incentive, provided the project meets the rules of the relevant scheme.

This can include commercial property owners, businesses that operate from leased premises and other non-residential organisations. In some cases, the person who owns the building and the person who pays for the hot water upgrade may be different, so the right to claim should be confirmed before the project starts.

For leased properties, get the property owner’s approval before any work takes place. The installer or accredited provider can also confirm who should receive or assign the incentive under the relevant scheme.

So, the important question is not simply whether you own a business. The business, property and heat pump installation must all fit the requirements of the scheme you want to use.

What Documents Do You Need To Claim The Rebate?

You need the right documents to show who you are, what system you had, what heat pump you installed and how the work was completed. The exact requirements vary by scheme, but it is sensible to have the following ready:

Business details: Business name, ABN or ACN and contact details.
Site details: Property address and details of the commercial premises.
Existing system information: Photos, model, capacity and fuel type of the old hot water system.
Heat pump details: Brand, model, capacity and product specifications.
Installer details: Business details, licences and accreditation where required.
Quote: The original quote showing the system, installation cost and any incentive or discount.
Invoice: The final invoice for the completed work.
Proof of payment: Bank records or receipts where the scheme requires them.
Installation documents: Relevant plumbing, electrical and compliance certificates.
Product eligibility evidence: Documents that confirm the heat pump meets the scheme requirements.
Photos or commissioning records: Evidence of the old system, new installation and completed work where required.

Keep these records from the start of the project. Do not wait until the installation is complete and then try to recreate photos, invoices or details that the scheme requires as evidence.

How To Claim A Government Rebate For A Commercial Heat Pump

The claim process depends on the government scheme, but the basic steps are similar. Start before the installation, because some schemes require evidence or approval before the old system is removed.

Find The Government Scheme That Applies

First, identify the incentive available for your state and type of commercial property. A business in NSW may use a different scheme from a business in Victoria, while some states rely more heavily on federal incentives.

Always work with your installer or accredited provider to help identify the correct scheme and confirm whether your proposed heat pump fits its requirements.

Confirm The Heat Pump And Existing System

Next, give the provider details of the existing hot water system and the heat pump you plan to install. This allows them to check whether the replacement qualifies and calculate the incentive available.

This step matters because a rebate may depend on the type of system you replace, the size of the new heat pump and the exact model you install.

Complete The Required Paperwork

Once eligibility is clear, complete the forms required by the relevant scheme. This may include information about your business, property, existing system, new heat pump and installer.

If the incentive uses certificates, you may also need to sign an agreement that allows the accredited provider to create or claim those certificates in return for the agreed discount.

Install The Heat Pump

The approved installer can then remove the old system and install the new commercial heat pump according to the scheme and Australian installation requirements.

Keep the required evidence throughout the work. If the scheme requires photographs of the old system before removal, for example, take them before the installer starts the replacement.

Receive Or Assign The Incentive

The incentive may come as an upfront discount on your installation cost, with the accredited provider receiving the certificate value in exchange for the discount.

For schemes that require a separate claim, the incentive is paid after you complete the required process. Ask your installer or provider how you receive the incentive before installation.

Keep The Project Records

After installation, keep the documents that prove the project met the requirements. These can include the final invoice, payment record, product details, installation certificates, photographs, and other evidence required by the scheme.

That gives you a clear record if the provider or scheme administrator needs to verify the claim later.

How Much Can Your Business Save With A Commercial Hot Water Rebate?

The amount your business can save depends on the scheme, location, existing hot water system and eligible heat pump. There is no single rebate amount that applies to every commercial installation.

The savings can come in two parts. First, an eligible incentive can reduce the upfront installation cost. Then, the heat pump can reduce your ongoing hot water energy costs because it uses much less electricity than conventional electric resistance heating.

Example Of A Commercial Heat Pump Saving

Suppose a business receives a quote of $20,000 for a commercial heat pump hot water system and installation.

If the applicable incentive provides a $4,000 upfront discount, the business would pay:

$20,000 − $4,000 = $16,000

The business therefore saves $4,000 on the initial project cost.

The heat pump can then provide further savings through lower energy use. The actual amount will depend on the business’s hot water demand, electricity tariff, existing system and heat pump performance.

The rebate is only part of the potential savings. The lower running cost is what can continue to save the business money after installation.

What Can Stop Your Business From Qualifying For The Rebate?

A commercial heat pump project can lose its incentive if it does not meet the rules of the relevant scheme. Most problems happen when the requirements are checked too late.

The Heat Pump Is Not Eligible

The exact model must meet the requirements of the scheme. A commercial heat pump that works well for your business may still fail the rebate requirements if it is not an approved product or does not meet the required specifications.

The Existing System Does Not Meet The Requirements

Some incentives apply when a business replaces an existing gas or electric hot water system. If the project does not meet the scheme’s replacement rules, the business may not receive that particular incentive.

The Required Evidence Is Missing

You may need proof of the old system, product details, installation records, invoices or photographs. If you remove the old system before you collect the required evidence, you may not be able to prove that the project qualified.

The Wrong Installer Or Provider Handles The Project

Some schemes require an accredited provider or a specific type of licensed installer. If the installation does not follow the required process, the incentive may not be available.

The Claim Starts Too Late

Do not assume you can install the heat pump first and sort out the rebate later. Some schemes require certain checks, paperwork or agreements before installation.

The safest approach is to confirm the scheme, heat pump, existing system and claim process before any removal or installation work begins.

FAQs

Do You Apply For The Rebate Yourself Or Does The Installer Do It?

In many cases, the installer works with an accredited provider who handles the incentive process. The provider can calculate the available certificate value, complete the required paperwork, and apply the value as an upfront discount where the scheme allows it.

How Long Does A Commercial Heat Pump Rebate Take?

There is no single timeframe for every scheme. Some incentives reduce the price on the quote, so you receive the benefit when you pay for the installation. Other schemes may require a separate claim or certificate process, which can take longer.

Is A Commercial Heat Pump Still Worth Installing Without A Rebate?

Yes. A heat pump can still reduce your business’s hot water energy costs because it uses much less electricity than conventional electric resistance heating. The rebate can improve the upfront cost, but the lower running cost provides value throughout the system’s life.

When Does The Heat Pump Rebate End?

There is no single end date for all Australian commercial heat pump incentives. Federal and state programs have their own timeframes, and governments can change their rules or funding. Check the current scheme before you commit to the installation.

Does The Size Of A Commercial Hot Water System Affect The Incentive Available?

Yes. System capacity can affect eligibility. For example, federal SRES eligibility for air source heat pumps is limited to no more than 425 litres, while Victoria’s commercial VEU activity has a minimum average tank volume of 425 litres.

What Happens If A Business Receives A Rebate But Later Replaces The Heat Pump?

A later replacement does not automatically create a new claim. Government schemes have rules about the equipment’s required operating period and repeat claims, so check the relevant program before replacing a subsidised system.

Can A Business Claim An Incentive For More Than One Commercial Hot Water Heat Pump?

It can be possible when the installations meet the scheme rules. For example, a business with several buildings or separate hot water systems may have more than one eligible installation. Each project still needs to meet the applicable product, installation and evidence requirements.