The federal Labor government announced on Tuesday that it would commit $171.7 million to help more than 14,000 Victorian social housing homes slash their energy bills through rooftop solar and a range of energy efficiency upgrades – and allow up to 5,000 homes to go fully electric.
Part of the federal government’s Social Housing Energy Performance Initiative (SHEPI), which aims to fund upgrades to help social housing residents access the benefits of the energy transition, the Albanese government will provide a further $146 million in funding, to be matched with $25.7 million from the Victorian state government.
Separately, the Victorian Labor announced $51.4 million in joint funding from the Albanese and Allan governments towards the Energy Efficiency Social Housing Program (EESHP).
The new influx of funding will help to refit social housing Victoria with cost-saving energy upgrades such as hot water heat pumps, electric cook tops, reverse-cycle air conditioning, solar panels, and other energy-saving technologies.
The Victorian government says the additional funding means that 6,000 social housing homes will get free additional upgrades, increasing the total number to 11,000 under the joint Commonwealth-State program, including 5,000 that can go fully electric.
The upgrades, including the addition of basic ceiling insulation to the state’s Victorian Energy Upgrades (VEU) program, will help residents stay cool in summer and warm in winter and insulate some of Victoria’s most vulnerable households from bill shock, bringing their energy bills down for good.
“These upgrades mean cooler homes in summer and warmer homes in winter, that are cheaper to run year-round, locking in lasting bill relief,” said Chris Bowen, federal minister for climate change and energy.
“Labor’s number one priority is delivering cheaper energy – while all the Liberals want to do is jack up power bills with their $600 billion nuclear plan.
“Every Australian, no matter where they live, deserves a home that is safe to live in, comfortable and cheaper to run, and energy efficiency upgrades can make a real difference to these outcomes,” added Josh Wilson, assistant federal minister for climate change and energy.
“As we shake off the recent hot weather and prepare for winter, we’re reminded of just how vital these upgrades are in bringing year-round comfort and lower bills to some of the most vulnerable households in Victoria and across Australia.”
The new funding was welcomed by the Energy Efficiency Council (EEC), which in particular hailed the reintroduction of insulation to the VEU program as one of the most significant energy efficiency measures for the state’s households in decades.
EEC chief Luke Menzel says roughly half of Victorian social housing homes were built before energy performance requirements were put in place, with many more constructed to lower standards than those now required in 2025.
“This announcement is a game-changer that will drive down energy bills while improving the health and comfort of homes across Victoria” said Menzel in a statement on Tuesday.
“This support will enable more Victorians to properly insulate their homes – one of the most effective ways to reduce energy costs and emissions. It’ll keep people warm in winter, cool in summer, and reduce the need to spend huge amounts of money running heaters and air conditioners around the clock.”
Menzel says the change to the VEU will also support local recycling, manufacturing, and jobs, with several insulation brands manufactured in Victoria, often using recycled materials such as plastic and glass.
In answer to concerns about a repeat of the so-called “pink batts” scheme – a one-time federal Labor insulation incentive that was found to have contributed to the accidental deaths of four young and inexperienced workers within the space of a year – all work undertaken through the VEU program must be undertaken by workers certified under the EEC’s Certified Insulation Installer program.
“States and territories are incorporating EEC installer certification into government programs to drive quality installations,” said Menzel.
“We also welcome the government’s commitment to training, audits and oversight requirements.
The Green Building Council of Australia (GBCA), too, has welcomed the addition of discounted ceiling insulation to the VEU program from early 2026, an initiative it says will cut the average cost of installing ceiling insulation in eligible homes by around 50 per cent.
GBCA CEO Davina Rooney says the addition of basic ceiling insulation can help households lower their energy bills by around $400 a year and improve year-round comfort.
“Every dollar spent on insulation is an investment in lower bills and healthier homes. It’s great to see incentives that directly lower bills while improving comfort.”
GBCA has also welcomed the focus on safety and quality assurance, and the commitment to workforce development as part of the rollout.
Solar Victoria will work with industry, unions, training organisations and the Energy Efficiency Council to help grow the insulation installer workforce and maintain high standards.
“With many Victorian homes currently under-insulated, there’s a clear opportunity to improve home performance and cut energy costs,” Rooney said.
