Victorian Energy Efficiency Target (VEET)

The Victorian Energy Efficiency Target (VEET) scheme has been expanded to include the business sector, presenting a significant opportunity for Victorian businesses to take advantage of potential energy savings.

Upgrades to lighting, air conditioning, hot water services and some electrical equipment will be subsidised through the scheme, reducing or even eliminating the payback period for eligible improvements.

The VEET is a market-based scheme, also known as the Energy Saver Incentive (ESI) scheme, aimed at improving the energy efficiency of Victorian homes and businesses. Commencing in January 2009, the scheme was initially available only to households, with activities such as the exchange of homeowners' old, inefficient incandescent lamps with energy efficient light bulbs (CFL lamps).

The expansion of the scheme to include businesses came into effect on 1 January this year. This presents a significant opportunity for Victorian businesses to take advantage of energy saving upgrades at a subsidised price. Upgrades to lighting, air conditioning, hot water services and some electrical equipment are all available under the scheme.

There are a series of prescribed activities that can be undertaken through the scheme, all designed to reduce electricity consumption for households and businesses.

How the scheme works:

Victoria's large energy retailers are required by law to surrender a set number of Victorian Energy Efficiency Certificates (VEECs) each year.

Available upgrades are known as ‘prescribed activities' and are all designed to reduce electricity consumption for households and businesses. Around 30 Prescribed Activities are currently included in the scheme, ranging from the installation of high efficiency hot water systems, air heater/coolers, lighting, draught proofing and window treatments through to the purchase of high efficiency appliances like refrigerators and televisions.

Each prescribed activity generates a certain number of certificates, or VEECs.

‘Accredited entities' - the companies that carry out these efficiency works for businesses and households - produce these certificates when they undertake any of the prescribed activities.

The ‘accredited entities' then sell the certificates to large energy retailers. The revenue they generate through the sale of VEECs helps them to make special offers for consumers that cut the cost of these efficiency improvements.

A list of activities has been released by the Essential Services Commission, which administers the scheme. Further activities are expected to be made available following analysis of public submissions on new activities. A simple version of this list can be found here.

Energy efficiency is regarded as one of the most cost effective ways of cutting carbon emissions from business activity and can improve profitability by reducing overhead costs - a great advantage in a competitive economic climate where many industry sectors are operating on thin profit margins.

For more information, visit the VEET website www.veet.vic.gov.au or speak to a VECCI Sustainability Consultant by calling 03 8662 5196.