Why Federal Funding for Councils Will Lead More to Household Rebates in 2026-2027

Victoria (VIC) has been granted the latest round of federal funding to electrify council-run buildings. Ten VIC councils have secured more than $8 million to phase out gas boilers, install large-scale heat pumps, expand rooftop solar and upgrade the mechanical systems inside pools, libraries, and community centres. These sites are some of the most energy-intensive assets in the state, and when they electrify, it sends a strong signal about where policy and investment are heading next. 

For homeowners, these council projects are not just local improvements. They are the earliest stage of a transition that typically expands to households 12-24 months later. VIC already leads Australia in electrification policy under its Gas Substitution Roadmap, and the technologies being installed across public buildings (electric heat pumps, solar, and efficiency upgrades) are the same technologies poised to receive greater residential support. At the same time, solar and battery rebates are scheduled to step down from January 2026, adding urgency for households planning an upgrade. 

This combination of council-level investment, state policy direction, and shifting rebate timelines sets the stage for the next major wave of household incentives in VIC. Understanding what councils are doing now provides a good indication of the opportunities homeowners will be offered next. 

Why Victoria targets councils first

Victoria uses council-owned buildings as the first testing ground for large energy shifts because they offer scale, stability, and measurable results. Facilities like leisure centres, aquatic complexes, libraries, and civic buildings run long hours and consume significant amounts of energy. When these sites convert from gas boilers to electric heat pumps or install large rooftop solar systems, the state gains reliable performance data under real operating conditions, far more detailed than any modelling. 

These projects also reduce risk. Councils have structured maintenance teams, established procurement processes and the ability to deliver upgrades quickly. Issues that arise during an electrification rollout (grid constraints, heat pump sizing, installation challenges) are easier to diagnose and resolve in a controlled public environment than across thousands of individual homes. 

There is also a clear market advantage. When ten councils across VIC purchase electrification equipment at the same time, suppliers respond with lower prices, better product availability, and improved lead times. Installers scale up their teams, learn the technology and develop the capability to handle high volumes of residential jobs. 

This matters because council upgrades create the conditions for incentives to expand beyond public buildings. Once the technology is proven at scale and the workforce is ready, rebates and support programs can be rolled out to households with far more certainty and far fewer risks. VIC has followed this sequence with every major energy transition over the past decade, and the current round of council funding is continuing that pattern. 

What the grants in VIC look like

The federal government’s latest funding round directs more than $8 million into electrification and efficiency upgrades across 10 councils. These projects all target the same outcome: replacing ageing gas systems with efficient electric technologies that cut running costs and reduce exposure to gas price volatility. 

Below is a clear breakdown of the VIC councils and the projects funded: 

(Amounts shown only where reported publicly; all 10 councils share in the $8m+ allocation.)

What these projects have in common

Across all 10 councils, the upgrades focus on: 

• Replacing gas boilers with large high-efficiency electric heat-pump systems
• Installing or expanding rooftop solar on major public buildings
• Upgrading mechanical and HVAC systems to reduce electricity use
• Improving pool and aquatic centre heating, which are among the highest-energy loads in council portfolios
• Preparing community buildings for a fully electric operating model

These are exactly the technologies that typically receive household rebates once the council rollout is completed and performance data is collected. 

Why this data matters for homeowners

VIC councils are essentially piloting the same technologies that households will soon be encouraged financially to install. When councils electrify at scale: 

• Costs fall due to bulk purchasing
• Installer capacity increases across the state
• Technology reliability is validated under heavy daily use
• Policy momentum builds toward residential support programs

This funding round is not just a council investment. It is the early stage of VICs next residential electrification wave, which is expected to align with the 2026-2027 rebate window. 

What this means for you

Council-level electrification reshapes the energy landscape for residents in practical, measurable ways. When public buildings convert to electric systems, it creates downstream effects that directly influence what households will pay, the technology available to them, and the rebates likely to be offered next. 

1. Gas becomes a more expensive legacy fuel

As large public facilities disconnect from gas, the fixed cost of maintaining gas networks spreads across fewer users. This trend has been highlighted repeatedly in Victoria’s Gas Substitution Roadmap and is now accelerated by council projects. 

Practical impact: 

• Households remaining on gas will face higher network charges over time.
• Electrifying early becomes financially safer than waiting.

2. Solar and batteries become easier and cheaper to install

Ten councils upgrading simultaneously increases demand for installers, but also stabilises the industry by giving contractors predictable, large-scale work. Over the next 12-18 months, this tends to lead to: 

• Lower equipment pricing
• More installer availability
• Shorter wait times
• Better workmanship due to larger, more experienced teams

VIC saw the same pattern during earlier solar-boom cycles. 

3. Better grid conditions for homes with solar

Energy-intensive public buildings shifting to efficient electric systems and adding rooftop solar reduce strain on local transformers and improve daytime voltage stability. 

This creates benefits for homeowners, such as: 

• Fewer export restrictions
• Improved solar export performance
• Lower risk of inverter throttling

These improvements are especially important in regional councils like Nillumbik, Baw Baw, and Wangaratta.

4. Stronger justification for new household rebates

VIC already leads in Australia in electrification policy, and council-level data provides the government with clear evidence to expand support to households. 

Council results help determine: 

• Heat-pump hot-water rebate levels
• Solar-plus-battery funding allocations
• Expansion of induction and appliance electrification programs
• Targeted support for low-income households

This is why similar funding rounds in the past have been followed by residential incentives within 12-24 months. 

5. A clearer path for homeowners planning upgrades

Council electrification provides signals homeowners can use to plan ahead. Look for indicators such as: 

• Council energy newsletters announcing community-energy plans
• Bulk-buy programs for solar or heat pump systems
• Early “resident consultation” notices for local electrification strategies
• Offers to join community battery feasibility studies

These tend to appear 6-12 months before household rebate programs expand. 

Overall, VIC’s council upgrades aren’t happening in isolation; they’re laying the foundation for the next phase of residential electrification, with stronger incentives through 2026-2027 as rebate timelines shift and the state accelerates its gas-exit strategy. 

What’s coming and why timing matters

VIC’s council electrification program is landing at the same time that major shifts are occurring in national and state-level incentive framework. For homeowners, this timing matters. The technologies being rolled out across council buildings are the same technologies expected to receive strengthened or restructured residential support over the next two years. At the same time, several existing rebate mechanisms are scheduled to reduce in value, creating a clear window where acting earlier may deliver stronger financial benefits. 

Solar rebates will decline from 1 January 2026

The national solar rebate delivered through Small-scale Technology Certificates (STCs) reduces automatically each year. The next scheduled decline takes effect on 1 January 2026. This means: 

• The upfront discount on a rooftop solar system will fall.
• Typical VIC households will lose several hundred dollars in support compared with a 2025 installation.
• Waiting until after the reduction may increase overall project costs. 

Battery rebates are entering a high-demand phase

With electrification expanding across public buildings, pressure on local grids increases. Batteries are a central tool for managing peak demand, stabilising voltage, and supporting neighbourhood resilience. As uptake grows, funding rounds for battery rebates may tighten or be exhausted more quickly. 

Practical implications for homeowners: 

• Earlier applications generally secure higher support levels. 
• Funding availability can change without long notice once installation targets are reached.
• Installing solar now with battery-readiness can help households access future incentives. 

Heat-pump hot water rebates likely to expand

Heat pumps are being installed across Victorian councils because they offer large emissions reductions, significant energy savings, and immediate cuts in gas consumption—all factors governments prioritise when expanding residential incentives. 

Expected directions for 2026-2027 include: 

• Higher rebate values for households replacing gas hot-water systems
• Broader eligibility criteria for low-income or rental households
• Integration with whole-home electrification programs
• Priority incentives for suburbs shifting off reticulated gas networks

Victoria is preparing for a broader electrification push

Council projects generate essential data for state and federal governments: 

• Operating costs
• Demand profiles
• Installation timeframes
• Workforce capability
• Grid impacts

Governments use this information to design household-level programs with fewer risks and clearer return on investment. Historically, VIC moves from council trials to household incentives within 12-24 months, which aligns with the current funding cycle. 

What rebates are most likely for VIC households (2026-2027)

Upgrade Type	Likely Support Level	Rationale
Solar panels	Smaller STC discounts from 2026; possible state top-ups for priority groups	To counter rising energy bills and support emissions targets
Home batteries	Strong candidate for continued or expanded rebates	Helps stabilise local grids as electrification increases
Heat-pump hot water	High likelihood of increased rebates	Large gas-reduction impact and proven council-level performance
Induction cooktops & electric appliances	Emerging area for future incentives	Supports Victoria’s gas-exit strategy
Whole-home electrification packages	Growing policy trend	Bundles solar, batteries, heating and efficiency

What you can do now

The council upgrades are a clear indication of where policy and incentives are moving. Homeowners who prepare early will be in the strongest position to benefit from upcoming electrification programs and avoid the rising costs associated with staying on gas or delaying energy upgrades. The steps below provide a practical roadmap. 

Review your home’s current energy setup

Start with a simple audit of what in your home still relies on gas or older electrical systems. 

Check the following: 

• Gas hot-water system
• Gas ducted heating or gas space heaters
• Gas cooktop
• Age and efficiency of your current electric hot-water system
• Existing rooftop solar size and inverter capacity
• Switchboard condition (older boards may need upgrading before electrification)

This creates a clear picture of your next logical step. 

Prioritise replacing gas hot water first

Gas hot-water systems are typically the most expensive and inefficient gas appliances. Replacing them with a heat-pump system delivers the biggest and fastest cost reduction. 

Why prioritise this: 

• Lower running costs compared to gas
• Aligns with upcoming rebate focus areas
• Reduces your exposure to rising network charges
• Can be scheduled before broader electrification work
• Get solar and battery quotes early

With council projects increasing electrification across the state, demand for installers is expected to grow. Getting quotes ahead of the crowd ensures you’re not stuck in long wait times later.

Key tips: 

• Ask for solar systems that are battery-ready
• Check if your roof orientation supports good solar yield
• Request quotes with and without a battery to compare timing
• Confirm whether installation before 1 January 2026 scores a higher STC discount

Consider sequencing your electrification

Not every upgrade needs to happen at once. A staged approach is often more cost-effective. 

Suggested sequence: 

1. Replace hot water with a heat pump
2. Install rooftop solar (or expand your existing system)
3. Add a battery when incentives align
4. Transition cooking to induction
5. Replace gas or resistive heating with electric heat-pump systems

This sequence maximises savings and make next step easier. 

Check if your council is preparing resident programs

Victorian councils often run: 

• Bulk-buy events
• Community battery trials
• Seasonal rebate top-ups
• Electrification transition workshops
• Priority sign-ups for neighbourhood projects

What to watch for: 

• Council newsletters mentioning electrification or energy upgrades
• Calls for residents to join “expressions of interest” lists
• Community energy planning consultations
• Public tenders for large-scale heat-pump or solar contracts

These programs usually appear 6-12 months before statewide residential rebates expand. 

Prepare your switchboard and wiring

Many VIC homes, especially older ones, need switchboard upgrades before adding induction cooktops, home batteries, or large heat-pump systems.

Why prepare early: 

• Avoid bottlenecks once rebates are released
• Reduce installation delays
• Ensure safety and compliance
• Spread upgrade costs over time

Track rebate timelines closely

In VIC, upgrade timing is becoming increasingly important. 

Key dates to note: 

• 1 January 2026: next STC reduction
• 2026-2027: likely expansion of electrification incentives
• Ongoing: high demand for batteries may change rebate availability

Acting ahead of deadlines protects homeowners from missing larger rebates. 

Build a simple electrification budget

You don’t need exact quotes to start planning.

Suggested budget markers: 

• $2,500-$4,500 for heat-pump hot water (before rebates)
• $5,000-$10,000 for a typical 6.6-10 kW solar system
• $8,000-$13,000 for a battery, depending on size
• $600-$1,500 for induction cooktop + electrical work
• $2,500-$8,000 for switchboard upgrades (if required)

This gives you a realistic view of the transition and helps you move quickly when rebates open.

Final checklist: Your next steps at a glance

Immediate (0-3 months)

• Audit home appliances
• Get solar and heat-pump quotes
• Check the switchboard condition
• Sign up for council energy upgrades

Short term (3-12 months)

• Replace gas hot water
• Install solar or expand your existing system
• Prepare wiring for future induction or heating upgrades

Medium term (12-24 months)

• Add battery when rebates align
• Electrify heating and cooking
• Disconnect from the fast network if financially viable

Victoria’s council upgrades are more than local infrastructure projects—they’re the clearest indicator of where household energy policy is headed next. The state is preparing for a broader push toward home electrification, and the timing aligns with upcoming rebate changes and a shifting gas landscape. For homeowners, acting early offers the strongest financial advantages, better access to support programs and a smoother transition away from gas. The groundwork is already being laid; the opportunity now is to stay ahead of it.

Energy Matters has been in the solar industry since 2005 and has helped over 40,000 Australian households in their journey to energy independence.

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