How Victorian Businesses Can Take Advantage of VEECs

For Victorian businesses, reducing energy costs while maintaining sustainable operations is a growing priority. One of the most effective ways to achieve this is through the Victorian Energy Upgrade (VEU) program, specifically by leveraging Victorian Energy Efficiency Certificates (VEECs). These certificates offer financial incentives for businesses that undertake energy-saving initiatives, helping to offset the upfront costs of projects such as solar installations, lighting upgrades, and more efficient heating and cooling systems.

By understanding how VEECs work and how to claim them, businesses can unlock significant cost savings while contributing to a greener future. In this guide, we’ll explore what they are, how they differ from other energy incentives, and the steps your business can take to maximise their benefits.

What Are VEECs and Why Do They Matter?

Victorian Energy Efficiency Certificates are a key part of the Victorian Energy Upgrade (VEU) program, designed to encourage businesses to implement energy-efficient solutions. Each VEEC represents one tonne of greenhouse gas emissions reduction and can be created when eligible energy-saving activities are completed. Businesses can then sell these certificates to energy retailers with a liability under the program, helping to offset the cost of energy efficiency projects.

For Victorian businesses, VEECs present a valuable opportunity to reduce energy costs while meeting sustainability goals. With energy prices on the rise and increasing pressure to decarbonise operations, leveraging these certificates can provide both financial and environmental benefits.

VEECs vs. Other Renewable Energy Incentives

Understanding how they compare to other schemes such as Small-Scale Technology Certificates (STCs) and Large-Scale Generation Certificates (LGCs) is crucial for businesses looking to maximise their returns on investment in renewable energy projects:

• STCs apply to solar systems under 100kW and offer an upfront discount on installation costs.
• LGCs are generated from large-scale renewable energy projects, with credits issued annually until 2030.
• VEECs focus on energy efficiency rather than energy generation, providing immediate recognition of carbon savings and financial returns approximately 18 months after project completion.

For businesses with solar installations exceeding 100kW, VEECs can be a more financially beneficial option than STCs and LGCs due to their higher upfront capital return and more immediate environmental benefits.

How Can Businesses Claim a VEEC?

The Essential Services Commission oversees the program and ensures participants follow the rules set by the Victorian Energy Efficiency Target Act 2007 (VEET Act) and its regulations. To claim VEECs, businesses must follow a structured process:

1. Baseline Energy Data Collection: Businesses must provide one to two years of historical energy consumption data, including production records if applicable.
2. Accredited Provider Engagement: They can only be claimed through accredited providers under the VEU program. These providers assess the energy efficiency improvements and submit applications to the Essential Services Commission.
3. Approval and Project Commencement: The Essential Services Commission must approve the project before work can begin. Once completed, energy savings are validated against the initial forecasts.
4. Certificate Creation and Payment: They are issued and can be sold or traded, with payments typically received around 18 months after project completion.

Eligibility Criteria for VEECs

Businesses must meet specific criteria to qualify:

• The project must demonstrate at least a 10% reduction in energy consumption.
• They are most viable for solar systems of 100kW or greater, with increasing economic benefits for systems exceeding 200kW.
• They cannot be claimed retroactively for existing solar systems; they must be approved before installation begins.
• Only accredited agents can apply for and trade VEECs on behalf of businesses.

Managing VEEC Risks

Like other environmental certificates, VEEC values fluctuate due to market demand. However, businesses can mitigate financial risks by hedging VEEC prices at the current spot rate, usually at a cost of around $3.50 per certificate. Locking in a price provides more certainty and stability for budgeting future energy efficiency investments.

Additionally, businesses should work with reputable accredited providers who understand market trends and regulatory requirements to ensure compliance and maximise returns.

The Financial and Environmental Benefits

For businesses looking to improve their sustainability profile and bottom line, these certificates provide a compelling incentive. The main advantages include:

• Significant financial rebates that offset the upfront costs of energy efficiency projects.
• Shorter payback periods on solar and other renewable energy investments.
• Immediate carbon emissions reduction that can be reported ahead of 2030 targets.
• Improved energy efficiency, leading to lower operational costs and long-term savings.

Compared to LGCs, which provide payments annually, VEECs offer a substantial capital return at the 18-month mark, making them an attractive option for businesses seeking quicker financial benefits.

Maximising Your VEEC Benefits with DS Energy

VEECs represent a valuable opportunity for Victorian businesses to enhance their energy efficiency while securing financial incentives. By leveraging the VEU program, businesses can significantly reduce energy costs, improve sustainability, and achieve faster payback on renewable energy investments.

At DS Energy, we specialise in helping businesses navigate the complexities of VEECs, ensuring maximum returns and compliance with regulatory requirements. Whether you’re exploring a new solar installation or other energy-saving initiatives, we can guide you through the application process and provide tailored energy solutions to suit your needs. With extensive experience in commercial solar installations across Australia and Papua New Guinea, we deliver tailored solutions to suit diverse energy needs. Our projects range from large-scale solar farms to energy efficiency upgrades for industrial facilities, supporting businesses in achieving their sustainability goals.

For more information on how DS Energy can support your business, check out our latest commercial solar projects and services, solar resource hub, and latest DS solar news and tips. Contact us today to explore how VEECs can benefit your organisation – we’d love to help.