Since July 1, residents have been able to claim up to $2500 back from the State Government for installing a solar hot water unit, depending on its size and performance.

Previously, the grant was $1500, but now between $1900 and $2500 was available for replacing current gas, electric, solar, wood or oil water heaters with a solar hot water unit.

The rebate is given at the point-of-sale by participating retailers.

The Federal Government also offers $1000, which is means-tested to a maximum family income of less than $100,000 in the previous tax year, but only for replacing existing electric heaters.

Households can elect to receive the full State Government rebate and agree not to apply for the federal rebate.

Or, they can apply for the federal rebate and receive $1000 less from the State Government.

Ballarat Renewable Energy and Zero Emissions president Nick Lanyon said BREAZE was thrilled with the State Government's incentive increase.

"What we've found is financial incentives are critical in driving forward people to take up energy solutions," Mr Lanyon said.