Multi-Unit Properties: VEU Hot Water Solutions for Apartments and Townhouses

Multi-Unit Properties: VEU Hot Water Solutions for Apartments and Townhouses

If you own or manage an apartment block or townhouse complex in Victoria, you’ve likely noticed that hot water is one of the highest ongoing costs for your property. Old gas storage systems, ageing electric boosters, and inefficient setups quietly drain money month after month, year after year. But here’s the good news: Victoria’s Victorian Energy Upgrades (VEU) program now makes it easier and more affordable to solve this problem.

Whether you’re a landlord, a body corporate manager, an owner-occupier, or a property developer, understanding how VEU hot water solutions apply to multi-unit dwellings could save you and your tenants a significant amount of money. 

Here’s what you need to know.

What Is the VEU Program and Why Does It Matter for Multi-Unit Properties?

The Victorian Energy Upgrades program is a state government initiative designed to help households and businesses reduce their energy use and greenhouse gas emissions. Through the program, accredited providers can offer heavily subsidised energy-efficient upgrades, including hot water systems, to eligible Victorian properties.

For single homes, the process is fairly straightforward. For multi-unit hot water systems such as apartment buildings, townhouse developments, and strata-titled complexes, things can be a bit more complex. The good news is that the VEU program applies to these property types, and the savings can be even greater for larger buildings.

The program works by issuing Victorian Energy Efficiency Certificates (VEECs). Accredited installers create these certificates when they upgrade inefficient systems, and those certificates have real monetary value. That value is applied to your new hot water system as a discount or rebate on the cost.

The Problem With Old Hot Water Systems in Apartments and Townhouses

Before we get into solutions, it’s worth understanding why multi-unit properties so often have hot water headaches.

Many apartment buildings in Victoria, especially those built between the 1970s and the early 2000s, were fitted with centralised gas hot-water systems or individual electric storage units in each apartment. At the time, these systems made sense. Today, however, they are costly, inefficient, and often well past their use-by date.

Here are some common issues property owners and managers face:

• High gas and electricity bills that can’t be easily split between tenants or common areas
• Inconsistent hot water supply, especially in multi-storey buildings, where pressure and temperature can vary significantly
• Frequent maintenance and repair costs on ageing units
• Non-compliance with modern energy efficiency standards, which can affect property value and tenancy appeal
• Carbon footprint concerns, which are increasingly important to both tenants and buyers

These challenges make a strong case for upgrading, and the VEU program helps make it financially possible.

VEU Hot Water Solutions Available for Multi-Unit Properties

So, what exactly can you upgrade to? When it comes to apartment hot water systems and townhouse hot water solutions under the VEU program, there are a few key technologies that accredited providers commonly install.

1. Heat Pump Hot Water Systems

Heat pump systems are widely seen as the best option for residential hot water in Australia today. Instead of generating heat directly, they extract warmth from the surrounding air and use it to heat water, much like a reverse-cycle air conditioner.

For multi-unit properties, heat pumps offer:

• Up to 70–80% less electricity use compared to conventional electric storage systems
• Lower running costs, which can be significant when multiplied across dozens of units
• Compatibility with solar PV systems, making them even more efficient if your building has rooftop solar
• Quiet operation, as modern units are built with noise reduction for residential settings
• Long lifespan, usually 10 to 15 years with proper maintenance

With the VEU program, eligible heat pump installations can receive substantial subsidies, which can greatly reduce upfront costs.

2. Solar Hot Water Systems

Solar hot water is another excellent option, particularly for townhouses and low-rise apartment buildings where rooftop space is available. These systems use roof-mounted solar collectors to capture the sun’s energy and heat water stored in a tank.

Key benefits for multi-unit settings include:

• Very low operating costs once installed
• Reduced reliance on gas or electricity
• Strong long-term return on investment, especially given Victoria’s mix of sunny and cooler days
• Available with electric or gas boosters for days when solar input is insufficient

The VEU program supports eligible solar hot water upgrades, and when combined with other state or federal incentives, the cost savings can be substantial.

3. Replacing Centralised Gas Systems

Many older apartment blocks still run on a single centralised gas boiler system that heats water for the whole building. While centralised systems aren’t inherently bad, ageing gas infrastructure often comes with:

• High gas tariffs
• Expensive maintenance contracts
• Significant heat loss through long pipe runs
• End-of-life reliability issues

Replacing these with modern centralised heat pump systems or switching to individual unit-based heat pumps is becoming more popular under VEU hot water solutions for larger residential buildings.

How to Upgrade Apartment Hot Water Systems: A Step-by-Step Overview

If you’re wondering how to upgrade apartment hot water systems through the VEU program, here’s a practical guide to get you started.

Step 1: Assess Your Current Setup

The first step is understanding what you currently have. Is it a centralised system or individual units per apartment? Gas or electric*? What’s the age and condition of the equipment? A professional energy assessment can help you map this out clearly.

Step 2: Check Your Eligibility

The VEU program has specific eligibility criteria. Generally, the property must be in Victoria, and the upgrade must replace an existing inefficient system. Multi-unit properties, including rental apartments and strata-titled townhouses, are eligible, though the process may require working with a body corporate or owners’ corporation.

Step 3: Engage an Accredited VEU Provider

Not just any tradesperson can access VEU subsidies. You’ll need to work with an accredited VEU installer who is registered to create VEECs. These providers handle the paperwork, ensure compliance, and pass the subsidy value on to you. Always ask to see their accreditation before proceeding.

Step 4: Get a Quote and Understand the Discount

A good accredited provider will give you a clear quote showing the full cost of the new system, the VEU discount applied upfront (often called a point-of-sale discount), and your net out-of-pocket cost. For multi-unit properties, this discount can be quite significant and may cover a large part of the installation cost.

Step 5: Schedule Installation

Work with your provider to schedule the installation with minimal disruption to residents. For apartment buildings, this may involve staging the work unit by unit or coordinating a building-wide switchover during a low-demand period.

Step 6: Register and Confirm Certificates

Once the installation is complete, your accredited provider will register the VEECs with the Essential Services Commission (ESC). This formalises the subsidy process. Keep records of all documentation for your property files.

Considerations for Body Corporates and Owners’ Corporations

One of the unique challenges of multi-unit hot water systems is navigating shared ownership and decision-making. In strata-titled properties, the owners’ corporation (body corporate) typically manages common property and shared infrastructure.

Here are a few tips for owners’ corporations considering a VEU hot water upgrade:

• Put it on the agenda: Raise the upgrade at a general meeting and present the financial case. Reduced common area energy bills directly benefit all owners.
• Get a professional assessment done first: This gives you hard numbers to present to fellow owners rather than hypothetical savings.
• Factor in capital works budgets: Many body corporates have capital works funds available for major infrastructure upgrades. A hot water replacement may well qualify.
• Communicate with tenants: If units are tenanted, give residents advance notice of any works and reassure them that service will be maintained.
• Understand split incentives: In some cases, tenants pay hot water costs rather than owners, which can affect decision-making. However, upgrading the system still adds value to the property and reduces maintenance needs.

Real-World Impact: What the Savings Can Look Like

While every property is different, the savings from transitioning to efficient apartment hot water systems can be genuinely impressive.

Consider a 20-unit apartment block currently running individual 3.6kW electric storage systems in each unit. If each unit uses roughly 2,000 kWh per year for hot water (a conservative estimate), that’s 40,000 kWh annually across the building. At current Victorian electricity rates, that’s thousands of dollars per year.

Switching to heat pump systems, which use about one-third of the electricity, could cut that bill by more than 60%. This change can save thousands of dollars every year. Over a 10-year lifespan, the savings really add up.

Add in the VEU upfront discount, and the payback period on the upgrade often comes down to just a few years.

Why Act Now?

The VEU program has been steadily evolving, and subsidy rates may change as the program matures and achieves its targets. Acting sooner rather than later means locking in current incentive levels and immediately starting to bank those energy savings.

There’s also a broader trend to consider: Victoria is moving towards electrification in all areas. New gas connections are becoming more restricted in new developments, and gas-dependent hot water systems are likely to be phased out over time. Upgrading now with quality townhouse hot water solutions or apartment-grade heat pumps puts your property in a strong position for the future.

Final Thoughts

Managing hot water in a multi-unit property does not have to be expensive or stressful. With the right VEU hot water solutions, property owners and body corporates across Victoria can switch to efficient, reliable systems, supported by meaningful financial help from the state government’s Victorian Energy Upgrades program.

Whether you manage a small block of four townhouses or a large apartment complex, there is a way to upgrade, save money, and future-proof your property’s hot water system. The key is to work with accredited providers who understand the program and can guide you from assessment to installation.

Ready to explore your options? 

Call 0425 671 666 to contact NK Air today. Book a visit for a free assessment with an accredited VEU installer. It could be one of the best property decisions you make this year.