For industrial clients and solar companies serving large commercial facilities, the Victorian Energy Upgrades (VEU) program has long been a valuable tool for improving the financial viability of energy efficiency projects. 

On 20 June 2025, the opportunities to generate significant revenue from Victorian Energy Efficiency Certificates (VEECs) expanded even further with changes to the program’s Measurement and Verification (M&V) specifications. 

These changes introduce five new streamlined Specified Measurement Methods (SMMs) and amendments to the current existing Project Based Activity (PBA) M&V method, making it easier and more cost-effective for a wider range of industrial and commercial projects to participate in the program.

The updated M&V specifications are a response to industry feedback, designed to reduce some of the complexity and administrative load associated with M&V projects. For industrial facilities with large and complex energy systems, and for solar companies developing projects for these clients, these changes represent an opportunity to unlock new, or simplified VEEC revenue streams.

The changes can be categorised into two key areas: 

1. The introduction of five new Specified Measurement Methods (SMMs)
2. Select changes made in an effort to streamline the existing M&V method.

SMM 1&2: Weather Normalised Whole of Site Measurement (electricity & gas)

These methods are a support for facilities with weather-dependent energy consumption, such as those with large-scale heating, ventilation, and air conditioning (HVAC) systems. By providing a fixed method for normalising energy data against weather variations,

these SMMs simplify the process of demonstrating energy savings and creating VEECs, reducing the volume of site-specific data typically required to create VEECs.

It is worth noting though, that these SMMs are not intended for solar use, despite the links they may have (see SMM 4 for updates around solar VEEC creation updates).

SMM 4: Direct Measurement of Solar PV

This method provides a more straightforward approach for calculating energy savings from behind-the-meter solar PV projects. While this may result in a slight reduction in VEECs compared to the previous more complex method,

the simplified process and reduced administrative burden will make it a more attractive option for many solar companies and their clients installing smaller PV systems in the 100-300kW range,

whilst larger systems will likely benefit from using the M&V method. Importantly, these new SMMs will better recognise the value of commercial and industrial batteries, providing a higher VEEC outcome than previously calculated under the M&V method.

SMM 3: Retrofit Isolation for Non-Seasonal Motors & Rotating Equipment

This SMM is specifically designed for upgrades to constant-run motors and other rotating equipment, such as those found in ventilation systems, pumping stations, and manufacturing processes. By simplifying the measurement and calculation of energy savings for these types of projects, this method opens up new avenues for generating VEECs from previously overlooked energy efficiency opportunities.

This could mean a faster consumer payment period than the traditional 18-months seen under M&V methods previously.

Depending on the project, consumers could see their VEEC incentives in half the time of previous claims.

SMM 5: Electrification Direct Measurement

As industrial facilities increasingly look to electrify their processes to reduce their carbon footprint, the support for industrial electrification via heat pumps has been lacking under the VEU program’s M&V method.

This SMM will play a role in increasing support for industrial heat pumps by simplifying the energy savings calculations for electrification projects and reducing the reliance on gas measurement of existing equipment.

By doing so, this method is intended to make it easier for businesses to electrify low-temperature heat sources and to be rewarded for their efforts through the creation of VEECs.

2. Streamlined M&V Method.

In addition to the new SMMs, the updated M&V specifications also introduce several changes to the existing PBA M&V method, making it more flexible for a wider range of projects.

Expanded Options for Non-Routine Events

The updated method provides more flexibility for accounting for non-routine events, such as changes in production schedules or equipment failures that can impact energy consumption. This is an improvement for industrial facilities, where such events previously could mean extending an operating period and delaying VEEC creation and payment.

Increased Flexibility for Missing Data

The new specifications provide more practical approaches for handling missing or erroneous data, reducing the risk of projects being deemed ineligible due to data quality issues. Projects now have guidelines that enable VEEC quantities to be lowered in cases where missing data occurs.

Revised Measured Energy Requirements

The updated requirements support more practical data collection approaches, particularly for projects where traditional modelling approaches are challenging, e.g. measuring the amount of energy in steam.

Simplified Application of Decay Factors

For projects with multiple energy conservation measures, the updated method simplifies the application of decay factors, reducing the complexity of the M&V process. This is particularly useful for facilities where multiple upgrades are occurring and being measured at once.