Client Overview

Kalafatis Fresh Produce, located in Shepparton, Victoria, is a cornerstone of Australian agriculture. A trusted Woolworths supplier for over 50 years, Kalafatis specialises in pears, apples, and stone fruit, including exclusive varieties like the Papple pear.

Project Summary

With rising energy costs and an increasing focus on sustainability, Kalafatis Fresh Produce sought a smart solution to cut emissions and reduce operational expenses. Watters Electrical, a long-term partner of Kalafatis, proposed and later delivered a 400 kW solar PV system. For the project to proceed, Northmore Gordon was bought in to provide critical funding via the VEU that supported the project financials.

Challenges We Overcame

This project wasn’t without its complexities:

• Kalafatis built new expansion sheds in 2022, and seven new cool rooms, causing a spike in energy usage during our measurement period. This added complexity to M&V and caused a dead end under traditional approaches.
• At Northmore Gordon we love challenging problems, and we used creative problem solving to create the concurrent baseline method (VSS). By gaining government support for the new mechanism, this allowed us to isolate energy savings purely from the solar system. This method is now widely used by the industry.
• Erroneous inverter data also caused challenges, we regularly apply new and creative approaches to modelling to ensure optimal customer outcomes.

Results That Speak for Themselves

Despite the hurdles, the project exceeded expectations:

• Energy Generation: 607 MWh actual vs. 526 MWh estimated
• Certificate Value: $283K actual vs. $235K estimated
• Annual Savings: 517 MWh actual vs. 484 MWh estimated

That’s a 6.4% boost in VEECs, delivering an extra $48K in financial value – reflecting our commitment to precise analysis and energy expertise.

Benefits for Kalafatis Fresh Produce

• Lower Energy Bills: Thanks to a significant reduction in electricity consumption
• Environmental Stewardship: A sharp decrease in greenhouse gas emissions
• Financial Incentives: VEEC rebates improved the return on investment
• Brand Reputation: Strengthened perception as an environmentally responsible grower

Our Role

At Northmore Gordon, we provided full project guidance – right from strategy through to implementation. Working closely with Kalafatis and Watters Electrical we ensured compliance and optimised outcome. Our expert team ensured the solar VEEC initiative stayed compliant, cost-effective, and results-driven. With our Measurement and Verification methodology and trusted project management, Kalafatis Fresh Produce turned their sustainability ambition into measurable success.

For more information about Solar VEECs and LGCs contact: Madonna Ghajar

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At Northmore Gordon, we continue to monitor the dynamic Victorian Energy Efficiency Certificate (VEEC) market.  Two weeks ago, the Government passed legislation to extend the VEU to 2045, and last Friday 16^th May, they announced the 2026 and 2027 targets. 

Latest Price Movements 

As of 19 May 2025, VEEC spot prices have declined to approximately $85.00 per certificate, marking a substantial correction from highs of over $110 in late 2024.  This represents a ~20% drop in recent months, underscoring a shift in market sentiment and fundamentals.  The announced targets resulted in a sudden drop from $91.00 to $85.00 where prices have stabilised for the moment. 

The latest VEEC price can be found on Northmore Gordon website.  Filter on VEECs. 

A Look Back: VEEC Price History 

VEECs were trading at around $30 back in 2020, steadily climbing to over $110 by late 2024. This increase was driven by: 

• Regulatory tightening that limited certificate creation. 

• Increased compliance demand from energy retailers. 

• Market uncertainty that spurred speculative buying. 

• Declining supply from lighting and market saturation in certain activities 

What’s Driving the May 2025 Price Drop? 

Several key developments have contributed to the recent decline in prices: 

• Regulatory Certainty:  
  On 16^th May 2025 Victorian Government has announced VEEC targets for 2026 (4.4 million) and 2027 (4.6 M), this is lower than the proposed revised interim VEEC targets for 2026 (5 M) and 2027 (6 M) and substantially lower than the 2025 target of 7.3 million. 

• Removal of Vintage Requirements: 
  Legislation removed the requirement for certificates prior to 31^st January to be used for surrender for the prior year’s obligation.  This provides more supply. 

• Extended Surrender Deadline: 
  The VEEC surrender deadline has been extended to 30 June 2025, giving liable entities more time to meet their obligations, reducing short-term pressure.  This may well happen again in 2026 

• Increased Supply: 
  Space heating and cooling, as well as commercial heatpump installation activities have steadily increasing creation rates.  

• Improved Supply Outlook: 
  With greater clarity and easing of speculative activity, supply has improved, leading to more stable pricing. 

What This Means for Business 

For those involved in energy efficiency projects or VEEC-generating activities, these market shifts present both challenges and opportunities. Staying informed and strategically timing your projects can help optimise returns and ensure compliance. 

At Northmore Gordon, we help clients navigate the certificate markets with confidence—providing strategic advice, regulatory insight, and market intelligence to maximise value from sustainability initiatives. 

Reach out to our team if you’d like a deeper conversation about how VEEC trends affect your energy strategy and consider hedging VEEC projects you have underway. 

For more information about Solar VEECs and LGCs contact: Madonna Ghajar

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Project Scope

At Northmore Gordon, we help organisations unlock value from environmental certificates while optimising their energy efficiency. One of our recent projects was with Methodist Ladies’ College (MLC), where we supported the Measurement and Verification (M&V) process for their 274.5kW solar system under the Victorian Energy Efficiency Certificate (VEEC) program.

The solar system was designed to generate 327MWh annually, with 90% of that energy expected to be consumed onsite and the remainder exported to the grid. Our role was to ensure accurate M&V reporting to maximise certificate creation while meeting compliance requirements.

The Challenges

Like many M&V projects, this one came with its share of complexities:

• Delayed Operating Period: Although the system was commissioned on 24 January 2023, the official operating period didn’t begin until 15 July 2023—5.5 months later than planned.
• Data Limitations: A full 12-month dataset was required, but gaps in solar generation data (13% of the total) posed verification challenges.
• Multiple Modelling Approaches: We needed to test and compare different modelling methods to ensure the most accurate and beneficial outcome for MLC.

Project Outcomes

Despite the hurdles, the project delivered excellent results:

• The solar system generated 290MWh, slightly below the modelled estimate but still providing significant energy savings.
• 85% of the energy was consumed onsite, close to the original target of 90%, reducing reliance on grid electricity.
• The actual number of VEECs created was 2,115, slightly exceeding the projected 2,111.
• In total, MLC received $122,709 (ex-GST) in financial benefits from VEECs, demonstrating the value of accurate M&V and expert advisory support.

At Northmore Gordon, we thrive on helping organisations navigate complex energy projects and maximise the benefits of environmental certificates. This project highlights how careful planning, accurate modelling, and expert verification can lead to strong financial and environmental outcomes—even when challenges arise.

For more information about Solar VEECs and LGCs contact: Madonna Ghajar

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About the Client:

Geelong Grammar School, one of Melbourne’s premier primary grammar schools, is a pioneering school that provides exceptional learning opportunities built on real-world experiences and genuine human connections. Established in 1855, they advance their heritage through innovation that champions a well-rounded, modern education for young people. At GGS sustainability action supports the wellbeing of all members of Geelong Grammar and their broader community. By working towards regeneration and sustainability improvements, they are taking action to help the community to thrive, and to follow their collective purpose of shaping a better world.
 
The Client’s challenges:

• Rising energy costs were increasing operational expenses
• A need to reduce the school’s carbon footprint to align with environmental goals
• Implementing a sustainable energy solution would balance cost reduction with environmental stewardship

Geelong Grammar School’s Toorak Campus faced rising energy costs and aimed to reduce its carbon footprint. The school sought to implement a sustainable energy solution to lower operational expenses and promote environmental stewardship.
 

What was the project?

Driven by the schools ambitious 2035 net zero target, Geelong Grammar School partnered with Northmore Gordon, experts in energy efficiency and sustainability, to create solar VEECs on the energy saved from the 166 KW Solar PV project using the Measurement and Verification (M&V) method.

What is the Measurement & Verification method?

A comprehensive Measurement and Verification (M&V) service helps create Environmental Certificates and access to grants for eligible projects. The service includes:

• Project eligibility review
• Selection of the right method, right government scheme/grant, and right Certificate type for your project
• Project registration
• Project boundary selection and measurement plan
• Baseline modelling using multi-variable regression analysis
• Post-project savings calculation
• Reporting
• Audit management
   

What were the outcomes?

• 166 KW Solar PV system was installed, generating 193 MWh of energy
• 1,330 Solar VEECs were created
• Client received a $74,000 rebate off the solar project installation from the VEECs created
• Energy savings of 168 MWh will save the client approximately $27,000 annually

What were the client benefits?

• Significant energy savings: Solar installation lowered electricity consumption and energy bills
• Environmental impact: Reduced greenhouse gas emissions through renewable energy
• Financial incentives: Solar VEECs offered financial rebates, improving project economics
• Enhanced reputation: Strengthened reputation as an environmentally responsible institution
• The M&V process delivered financial information upfront, giving certainty to the return on investment that was required as part of the business case process
   

Northmore Gordon’s role:

Geelong Grammar School’s decision to partner with Northmore Gordon for their solar VEEC project exemplifies the benefits of expert guidance in energy efficiency initiatives. Through the precise application of the M&V method and comprehensive project management, Northmore Gordon enabled Geelong Grammar School to achieve its sustainability and financial goals.

Want to find out more? Contact Madonna Ghajar at m.ghajar@northmoregordon.com

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In this article, we break down the key drivers, market outlook for the next 6–12 months, and smart strategies to manage price risks.

Who should pay attention?

The current VEEC price trends directly impact businesses planning energy efficiency upgrades under the VEU program. Industries that can benefit the most include:

• Manufacturing – Optimising industrial processes and equipment.
• Retail & commercial buildings – Solar installations and HVAC systems.
• Aged care & healthcare – Upgrading heating and cooling for patient comfort.
• Cold storage & food processing – Improving refrigeration efficiency.
• Hospitality & accommodation – Reducing energy use in commercial kitchens and laundries.
• Animal processing & agriculture – Lowering energy costs in operations such as refrigeration, heating, and irrigation.
  

Whether you’re a Small to Medium Enterprise upgrading equipment or a large enterprise managing multiple sites, understanding the VEEC market can help you maximise financial returns on your projects.

What determines the VEEC price?

The VEU program requires energy retailers to meet annual targets by purchasing VEECs, which are created when businesses complete eligible energy-saving activities. Supply and demand dynamics dictate certificate pricing.

Currently, VEEC supply is lagging behind the run rate required for the 2025 target of 7.3 million certificates, pushing prices toward the tax-effective penalty price of $128 per VEEC.

Why is the VEEC price near $110?

Several key factors have driven VEEC prices to their current levels:

1. Increasing annual targets – Rising from 6.3M in 2020 to 7.3M in 2025, increasing demand.
2. Declining emission factors – More energy savings are now required to generate the same number of VEECs compared to 2019.
3. Diminishing opportunities – Key activities like replacing electric resistance hot water systems with heat pumps have fewer VEECs per upgrade due to emissions factor adjustments.
4. Market uncertainty – Regulatory announcements and program updates create volatility, influencing buyer behaviour.

Will the VEEC price go higher?

It’s possible that the price could touch $120, but further increases are unlikely unless there is an extreme supply shortage. The market is already close to the penalty price, and buying activity is slowing down.

What could cause the VEEC price to drop?

VEEC prices remain volatile, fluctuating by around $10 regularly. The key trigger for a significant price drop would be a new (our existing) method, that unlocks high-volume certificate creation.

Examples to changes in the VEEC price include:

• From 2020-2021 the new targets, along with shortages in supply led the price up to $80
• Past government interventions (e.g., introducing refrigerated display cabinets in 2022) temporarily increased supply and softened prices to $49
• The phase out of lighting activity and shortage in supply has led the price back up
• Lower 2026/2027 VEEC targets initially led to a price drop but were later offset by ongoing supply shortages.
• Space heating and cooling upgrades are growing but remain high-cost activities, requiring sustained high VEEC prices to be viable.

Until a scalable, cost-effective method is introduced—perhaps residential battery storage or expanded industrial energy efficiency projects—substantial price reductions are unlikely.

Though keep in mind past Government announcements, changes in activities, and policies have had big price impacts and the government has now released the strategic review of the VEU.

Eligible activities under the VEU Program

Businesses can earn VEECs by implementing energy-saving projects, including:

• Appliance upgrades: Installing high-efficiency refrigerators, freezers, televisions, clothes dryers, induction cooktops, and in-home display units. 
• Water heating: Replacing old water heaters with energy-efficient models and installing water-efficient showerheads. 
• Space heating and cooling: Upgrading existing heating and cooling systems with more energy-efficient options. 
• Lighting upgrades: Replacing old lighting fixtures with energy-efficient options in buildings and public spaces. 
• Gas efficiency improvements: Installing gas efficiency controls and upgrades on gas appliances. 
• Commercial and industrial upgrades: Businesses can also access upgrades for lighting, cold rooms, and other energy-consuming equipment. 

How Northmore Gordon helps businesses navigate VEEC price risks

At Northmore Gordon, we work closely with businesses across multiple sectors to optimise their energy efficiency projects and navigate the complexities of the VEEC market.

Read our case study

A large manufacturing client sought to replace its gas-fired boiler system with a high-efficiency heat pump. Northmore Gordon:
• Conducted an energy audit to quantify VEECs generated.
• Locked in forward contracts to hedge against price fluctuations.
• Secured government incentives, reducing project payback time to just 2.5 years.

As a result, the company reduced gas consumption by 60%, cut emissions, and saved over $200,000 annually.

Recommendations for managing VEEC price risks

For businesses planning energy efficiency projects, it’s essential to proactively manage price risks. Here’s how:

1. Secure forward contracts – Lock in VEEC prices with Northmore Gordon for future projects to mitigate potential price increases.
2. Diversify eligible activities – Explore underutilised methods such as M&V projects to create VEECs efficiently.
3. Stay informed – Monitor government announcements and VEU policy updates via Northmore Gordon’s market insights.
4. Leverage expert guidance – Work with Northmore Gordon’s energy consultants to identify cost-effective solutions, manage compliance, and maximise VEEC creation.

Looking ahead: What’s next for the VEEC market?

The VEEC price is likely to stay high unless the government introduces new, large-scale efficiency measures. Over the longer term, high prices are not sustainable and could lead to policy adjustments or additional supply-side interventions.

For businesses, the key to success is staying ahead of market shifts. By leveraging expert guidance, securing contracts early, and exploring diverse energy efficiency options, companies can protect themselves from volatility and maximise returns on their sustainability investments.

Take action with Northmore Gordon

Need expert guidance on your VEEC strategy? Whether you’re looking to secure forward contracts, explore energy-saving opportunities, or navigate compliance requirements, Northmore Gordon can help.

Contact us today to discuss your energy efficiency goals and VEEC strategy. Let’s turn sustainability into a competitive advantage for your business.

Want to find out more? Contact Madonna Ghajar at m.ghajar@northmoregordon.com

Disclaimer: The information in this article is general only and has been prepared without taking into account your businesses particular circumstances and needs. You should assess or seek advice from Northmore Gordon Environmental (AFSL 533927) on whether it is appropriate for your businesses objectives.

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About the client: 

Yallambee Traralgon Village for the Aged Inc has provided aged care services since 1971 with the construction of the Retirement Village Units. This was followed by the opening of the Margery Cole Hostel in 1975.  

What was the project?  

Yallambee Traralgon Village for the Aged Inc faced rising energy costs and aimed to reduce their carbon footprint. The site sought to implement a sustainable energy solution to lower operational expenses and promote environmental stewardship. To achieve this, they implemented a 276-kW solar VEEC (Victorian Energy Efficiency Certificate) project using the Measurement and Verification (M&V) method. 

The facts:

• Yallambee Aged Care was able to achieve energy savings of approx. 38% annually from the solar project. 

• As a result of renewable energy produced by the solar system, the site was able to reduce 2,253 tonnes of Carbon dioxide emissions over 10 years 

• The solar system generated 344MWh of solar power in the year 2023. 

The challenges:

• Installation of additional electrical appliances during the operating period resulted in a different approach – from traditional to Virtual Solar switch M&V method. 

• Due to the above change, Northmore Gordon had to actively monitor solar portal (time & effort) to ensure all the data is being correctly recorded as the M&V method has strict limitations around missing data. 

What were the outcomes?

• Project: 276kW  
• Generation: 344 MWh  
• Certificate Value: $125K 
• Annual Savings: 269 MWh  

What were the benefits?

• Significant Energy Savings: The solar installation resulted in a substantial reduction in electricity consumption, leading to lower energy bills. 

• Environmental Impact: By switching to renewable energy, Yallambee Traralgon Village for the Aged Inc. significantly reduced its greenhouse gas emissions, contributing to a cleaner environment. 

• Financial Incentives: The VEECs generated through the project provided financial rebates, improving the overall economics of solar investment. 

• Enhanced Reputation: The successful implementation of a sustainable energy solution bolstered Yallambee Traralgon Village for the Aged Inc.’s reputation as an environmentally responsible business. 
  

Northmore Gordon’s role:

Yallambee Traralgon Village for the Aged Inc decision to partner with Northmore Gordon for their solar VEEC project exemplifies the benefits of expert guidance in energy efficiency initiatives. Through the precise application of the M&V method and comprehensive project management, Yallambee Traralgon Village for the Aged Inc were able to achieve their sustainability and financial goals. 

For more information about Solar VEECs and LGCs contact: Madonna Ghajar

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With only a few weeks left in 2024, solar installers have limited time to get their projects commissioned and approved by the Essential Services Commission (ESC) to capture full VEEC value. Simply put, if your project is not yet under construction, if VEECs haven’t been on your radar, or if you’re unsure how to proceed but can commission by 31 Jan 2025—reach out today!

Why Acting Now Matters

• Maximising VEEC Rebates: VEECs represent a significant portion of the financial benefits of solar installations, and the upcoming emission factor change threatens to cut this value by as much as 26%. By fast-tracking projects now, you can secure higher certificate values, ensuring your clients get the best returns on their investment.
• Securing Regulatory Approvals in Time: Delaying project commissioning increases the risk of missing out on necessary regulatory approvals. The approval process can be time-consuming, especially if documentation or compliance requirements aren’t met upfront. With limited time remaining, it’s crucial to have all approvals finalised well before the deadline.
• Avoiding Project Bottlenecks: As the deadline approaches, a rush in submissions is likely, leading to potential delays or bottlenecks in the approval process. Additionally, installation approvals for solar projects can take significantly longer, often causing unexpected delays. Acting now allows solar installers to avoid this last-minute rush and ensure that projects are reviewed and approved on time.

How to Fast-Track Your Projects for Success

Navigating the complexities of solar project approvals can be challenging, especially when the stakes are this high. This is where partnering with a knowledgeable advisor like Northmore Gordon becomes crucial.

At Northmore Gordon, we specialise in helping solar installers navigate regulatory requirements, secure timely approvals, and maximise VEEC rebate value for their clients. Our team understands the specific compliance needs set by the Essential Services Commission and can guide you seamlessly through the process. We help you:

• Align Projects with ESC Requirements: We ensure that your projects meet all regulatory standards and documentation needs, reducing the risk of delays or rejections.
• Streamline the Approval Process: With our expertise in handling submissions, we can fast-track your projects to assist with ESC approval before the deadline.
• Unlock Maximum Rebate Value: Our experience in measurement and verification ensures that your projects are structured to deliver the highest possible returns under the current VEEC framework.

Ready to Fast-Track Your Projects?

If you have ongoing or upcoming solar projects, don’t wait. Contact us today to secure regulatory approval and maximise VEEC returns for your clients. Let’s fast-track your clean energy transition together and avoid the financial pitfalls of the emission factor change.

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The successful project claimed VEECs for avoided carbon emissions from 581kW system installed on the roof of The Australian Glass Group’s (AGG) head office and manufacturing site in Knoxfield. The building owners – APN Property Group – agreed to an addendum on the existing lease to allow AGG to save on energy costs with an agreed ROI, while greening their property portfolio.

The PV system has had the annual carbon savings measured and verified at 421 tonnes of CO₂ per annum. Using the VEU program has also enabled AGG to continue to use Green Power from the solar PV system on their roof. If the system had claimed LGCs and sold those LGCs they could no longer claim the site was reducing their emissions from electricity based on the federal carbon accounting rules. 

Using the VEU Project Based Assessment (PBA) has given a return of more than 3x what would have been realised for the customer had they claimed LGCs. The time to cash was dramatically reduce to 15 months from project commissioning instead of claiming LGCs out to 2030. The high value of the VEECs combined with the 15-month time frame for realising the certificate value, reduced the upfront cost of the system, payback period, and increased the ROI of the project. 

“Solar VEECs are really ramping up VIC. Today, 30-40% of the cost of a large-scale solar project can be covered through VEECs – it’s a game changer. Whilst the VEU PBA method is complex, Northmore Gordon pioneered measurement & verifications under the VEU and we now have substantial experience across a wide range of sites and implementations. For our customers this means less risk and the best possible outcome.”

Hamish McGovern – Northmore Gordon, Group Commercial Director

Northmore Gordon is the leader in VEEC creation under the VEU PBA method, which was launched in 2017, with 64% of all VEECs created using the method to date, corresponding to 121,000 tonnes of CO₂-e abated from Victorian projects. The Victorian Energy Upgrades program is the state’s flagship energy efficiency program that has driven a reduction of 74.9 million tonnes of CO₂-e in Victoria since 2009. Each VEEC is worth 1 tonne of CO₂-e not emitted.

Talk to Northmore Gordon today to take advantage of the Victorian Energy Upgrades program.

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