Updated guidance and requirements for water heating and space heating and cooling activities (activities 1, 3, 6 and 44)

13 December 2024

Background

Water heating and space heating and cooling activities under the Victorian Energy Upgrades (VEU) program are critical to supporting Victoria’s electrification transition across Victorian homes and to support Victorian consumers to reduce their energy bills. 

We have received feedback from accredited persons and scheme participants on a number of issues relating to the administration of water heating and space heating and cooling activities (activities 1, 3 and 6). We released a consultation paper in October setting out our proposed amendments to our guidance, record-keeping requirements and forms in response to this feedback. You should review this paper for a better understanding of the context and rationale for the below changes.

We have decided to make the following administrative changes to these activities after considering stakeholder feedback on our proposed amendments. The submissions made by stakeholders to the consultation and the consultation engagement summary document can be found on the consultation page. 

Changes to water heating and space heating and cooling activities (activities 1, 3 and 6)

Changes to guidance relating to decommissioning and disposal 

We have updated the decommissioning guidance included in the activity guide for water heating activities (activities 1 and 3) and for the space heating and cooling activity (activity 6) to: 

• clarify that when decommissioning a gas product, the gas pipe supply must be sealed and capped off in accordance with AS/NZS 5601.1, and included a link to further guidance from Victorian Building Authority on this matter 
• clarify that when decommissioning an electric product, the wiring needs to be terminated and isolated in accordance with AS/NZS 3000
• clarify that most products should be removed from the consumer’s premises. Where a product is not removed, a justification for why the product has been left on site will need to be recorded on the activity’s VEEC assignment form
• clarify that where a product is not removed from the consumer’s premises, it must be rendered permanently unusable
• include further guidance on what steps installers should take to render a product permanently unusable (particularly if left in situ).

Changes to record-keeping requirements 

We have updated the record keeping requirements for these activities to:

• no longer require accredited persons to retain or provide individual records evidencing that each decommissioned product has been disposed in compliance with the Environment Protection Act (EP Act) and its regulations as part of our assessment of an activity for certificate registration 
• require collection of a geo-tagged photograph showing that the baseline product has been rendered permanently unusable, even where the product is being removed from the consumer’s premises for disposal
• require collection of a geo-tagged photograph showing the location of the existing product – the photograph to be taken at a wide angle to show the location of the product (where existing product has not been removed from the consumer’s premises).
• require collection of a geo-tagged photograph showing the installed product after installation - the photograph to be taken at a wide angle to show the entire product and pipework (for water heating activities (activity 1 and 3) only)
• require collection of a geo-tagged photograph showing the terminating location of the temperature pressure relief (TPR) valve drain line (for water heating activities (activities 1 and 3) only)

Accredited persons are responsible for ensuring that disposal of decommissioned products is undertaken in accordance with all applicable waste management requirements under the EP Act and its regulations. Failure to comply with these requirements may result in compliance and enforcement action by the commission (or other regulators) and may have implications for your VEU accreditation. We may seek information from an accredited person to demonstrate that appropriate systems are in place to ensure compliance with these requirements.

Changes to space heating and cooling activity (activity 6)

Changes to record-keeping requirements and VEEC creation form requirements for product sizing

We have introduced the following changes to assist the commission to better understand and monitor the sizing of multi-split systems installed in residential premises:

• inclusion of a new sizing record as listed under table 26 of the activity guide which includes:
  • information on each room and the size of each room which was heated and cooled by the existing product
  • information on each room and the size of each room which is to be heated and cooled by the installed product, including the heating output required for each room
  • signatures by the installer and the consumer evidencing agreement by the consumer confirming they received the sizing record
  • information on whether the recommended size of the installed product is consistent with the size recommended in the VEU Space Heating and Cooling Consumer Fact sheet
• inclusion of new fields to the VEEC creation form for the activity to collect information on individual room sizes (up to a total of 5 rooms) being heated and cooled by the installed product.

The above record-keeping and VEEC creation form requirements apply to installation of multi-split systems in residential premises only.

Accredited persons and scheme participants will need to collect the above record and complete the following fields in the VEEC creation form for activities undertaken from 20 January 2025.  

We note feedback from two stakeholders that the sizing guidance in the VEU Space Heating and Cooling Consumer Fact sheet does not account for advancement in reverse cycle air-conditioner (RCAC) technology. We have provided this feedback to the Department of Energy, Environment and Climate Action (department) for their consideration as they are responsible for the fact sheet. 

Updated VEEC assignment form and VEEC creation form requirements for the pricing of upgrades

To help inform our risk-based assessment of activity 6, we have made below change to enable us to collect pricing information for upgrades undertaken under the activity: 

• inclusion of the following fields in the activity’s VEEC assignment forms and VEEC creation forms: 
  • price of upgrade, including product and install costs (before VEEC incentive applied) 
  • amount paid by consumer for the upgrade (after VEEC incentive applied).

The above pricing information will only be required to be captured in the VEEC assignment form where the information is not already captured in the invoice for the upgrade.

Accredited persons and scheme participants will need to and complete the following fields in the VEEC assignment form and VEEC creation form for activities undertaken from 20 January 2025.  

Updated guidance and VEEC assignment form requirements relating to replacement of existing ductwork issue

We received mixed feedback from stakeholders regarding whether:

• existing ductwork should be replaced when upgrading from a gas heater to RCACs
• ‘easy replacement’ ducted RCAC products that are being marketed as being suitable for connections to existing ductwork should be able to be installed under the program.

We have provided stakeholder feedback on this issue to the department to consider what changes (if any) should be made to the activity requirements on this issue.

We have updated our guidance for this activity to clarify that:

• we recommend the ductwork and fittings for existing ducted products be replaced to mitigate risk of inefficiencies in the performance of the installed ducted reverse cycle air conditioning units that may result in poor outcomes for the consumer
• our expectation is that installers replace the ductwork and/or fittings where they have identified that the existing ductwork and/or fittings are not suitable for reuse (e.g. where ductwork is inappropriately sized and/or has degraded over time)
• failing to provide consumers with clear and accurate information about the suitability and performance of product may amount to a breach of the code of conduct and is subject to a range of compliance and enforcement actions.  

To enable the commission to better monitor this issue, we have made the following changes to the activity’s VEEC assignment forms and VEEC creation forms to capture information on whether ductwork of a decommissioned product was replaced: 

• introduction of a new field in the VEEC assignment forms 
• introduction of a new field in the VEEC creation forms for activity 6. 

The above information will only need to be recorded where the upgrade involves replacement of a ducted system with a ducted RCAC.  

Accredited persons and scheme participants will need to complete the following fields in the VEEC assignment form and VEEC creation form for activities undertaken from 20 January 2025.  

Useful resources for water heating activities (activities 1 and 3)

We have included links in the updated activity guide for water heading activities (section 3.10) to resources published by Solar Victoria to help installers of solar hot water and hot water heat pump installations understand compliance standards.  

Changes to reflect warranty requirements commencing 1 February 2025

As part of this program update, we have also:

• made minor changes to the warranty requirements as stated in the activity guides for heat pump water heating activities (activities 1D, 3C and 44) and affected space heating and cooling activities to more closely align with the wording in published VEU Specifications 18.0
• released changes to the product application requirements for below products to include the requirement for the applicant to provide a copy of the warranty:
  • heat pump hot water systems registered under product categories 1D and 3C 
  • air conditioning products registered under product categories 6A, 6B, 6D, 6E and 6F (excludes ducted and non-ducted products with a rated standard cooling capacity of more than 39kW)
  • commercial and industrial heat pump hot water systems with an insulated storage volume not exceeding 700 litres under product category 44A.

For further information on this updated product application requirement, please review the updated Water Heating and Space Heating and Cooling Product Application Guide and Commercial and Industrial Air Source Heat Pump Water Heater Product Application Guide. 

Updated guides and forms

We have published the following updated activity guide and VEEC assignment forms to reflect above changes:

• Water Heating and Space Heating and Cooling Activity Guide
• VEEC Assignment Form Template Space Heating and Cooling (Activity 6) – Residential Premises
• VEEC Assignment Form Template Space Heating and Cooling (Activity 6) – Business and Non-Residential Premises

The above updated documents can be found on the Commission website on this page.  You can review the updated VEEC creation forms for activity 6 residential and non-residential activities. 

Where to get help

If you have any questions with respect to the information set out in this update, please contact VEU support on (03) 9032 01310 or veu@esc.vic.gov.au.