Market Update | 17 April 2025

• VEEC Program Target Revisions Set To Be Announced
• Federal Government Battery Program Announcement

VEEC Program Target Revisions Set To Be Announced.

Industry stakeholders await the release of the consultation response on program targets for 2026-2027, due in the next 3-4 weeks. The regulator’s preferred approach outlines a substantial decrease in these targets: from 7.3 million certificates in 2025, down to 5 million in 2026 and 6 million in 2027. However, while lowered, these targets currently align with the creation levels in market. This proposed adjustment is intended to address the sustained creation shortfall of Victorian Energy Efficiency Certificates (VEECs) observed throughout the current calendar year. By reducing the number of VEECs to be surrendered by liable entities (the demand side of the market), the market supply and demand scales are anticipated to be better matched.

Federal Government Battery Rebate Announcement.

The Labor party first announced its plan to introduce the Cheaper Home Batteries Program on April 6th if successful in the upcoming election. Chris Bowen, the Energy Minister, spoke again at the Smart Energy Conference last week in Sydney, and below is an update on what we know to date:

About the battery program:

1. 1. The program will operate under the current SRES scheme as an additional activity, alongside the existing national solar rebate program, which utilises Small-scale Technology Certificates (STCs).
   2. It aims to benefit households, small businesses, and community facilities.
   3. A commitment of $2.3 billion in investment, which is projected to translate to approximately $372 per kWh of usable capacity (theoretical maximum).
   4. The incentive is ‘uncapped’, though will have an annual program target.
   5. Demand will originate from the government, instead of the usual liable party penalties.
   6. The certificates created under the program will be stackable with existing state-based schemes, allowing for ‘double-dipping’ – subject to state policy also allowing this.
   7. Implementation is contingent upon Labor winning the election.

Installation requirements:

1. 1. Eligibility is limited to batteries energised on or after July 1, 2025.
   2. Installations must comply with CEC guidelines and utilise approved modules.
   3. Eligible battery usable capacity ranges from 5kWh to 50kWh.
   4. Batteries must be Virtual Power Plant (VPP) ready (unless offgrid).
   5. Only one application is permitted per property address.

The industry’s overall sentiment is positive; however, uncertainty primarily surrounds the program’s specific requirements and logistics. Questions remain, such as: How will we ensure systems are not energised before the specified date? Given the current Peak Demand Reduction Scheme (PDRS) ruling that prohibits stacking with the Renewable Energy Target (RET), will this policy change? How will the alternative demand sources (i.e., not liable parties) affect STC prices and their future market performance?

Ecovantage will continue to monitor developments in this area and provide updates as further information becomes available. Please see our Feature for more information and examples incentive values.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.