Changes under the Victorian Energy Upgrades Program (VEU) means it is now possible to claim VEECs (Victorian Energy Efficiency Certificates) instead of LGCs (Large Generation Certificates).
With changes to the VEU Specification in December 2020 Solar PV systems no longer need to export limiters in place, that coupled with the substantial increase in VEEC price means that it is a “no brainer” to claim VEECs instead of LGCs.
- Double the value. Even for a business consuming energy only 5 days per week the NPV of VEECs is twice that of LGCs
- VEEC payments are paid MUCH faster. With 16 months after commissioning as opposed to over a 10 year period for LGCs.
A couple of examples for systems commissioned by 31st of January 2022.
- A 500 kW Solar PV systems for factory or warehouse running 5 days per week with 90% self-consumption on weekdays – weekend and excess energy exported to the grid:
– VEEC Value $130,000 vs LGC Value: $68,000
- A 1.25 MW Solar PV system used in site with 7 days per week full onsite consumption (eg a shopping centre, a coldstore, or a factory with continuous production).
– VEECs: $520,000 vs LGCs: $170,000
- The VEEC value is higher if commissioned by 31st July this year
The benefit of the VEECs far outweigh the value of LGCs. In addition, it is possible to claim the first 100kW under the STC if implemented first as a separate system. Given the value of the VEECs today there isn’t as much benefit in taking that approach and it is simpler to build the system all in one go.
Another example – 750 kW System with 5.5 days per week self-consumption and 10% during that period exported. The other 1.5 days is fully exported to the system. VEEC payments are just on $250,000 whilst LGCs net $125,000 over 10 years and and NPV of $100,000.
Claim Solar PV under the VEU
In order to claim under the VEU Northmore Gordon uses the Project-Based Activities (PBA) method. It is useful to understand that this method actually measures the energy savings onsite modelled against the expected energy usage for the site rather than examining the energy generated from the solar PV system. We use the International Performance Measurement and Verification Protocol (IPMVP) to model the sites energy usage and calculate the energy saved from the grid through solar PV.
Key Points to remember
- Projects must be registered with the Essential Services Commission BEFORE construction commences. This takes up to four weeks.
- Contact us during your sales cycle to help verify eligibility and the value of the VEECs.
- The value of the VEECs changes based on the commission date – installations before 31st July 2021 receives the highest value. Figures above modelled on installation by the 31st January 2022.
Want to know more? Talk to one of our Northmore Gordon Specialists for Solar VEECs