VEEC Market Update – Price Declines May 2025 

Insight from Northmore Gordon 

At Northmore Gordon, we continue to monitor the dynamic Victorian Energy Efficiency Certificate (VEECVictorian Energy Efficiency Certificate) market.  Two weeks ago, the Government passed legislation to extend the VEUVictorian Energy Upgrades is a Victorian government energy efficiency program that gives every Victorian household and business the opportunity to receive rebates or discounts on energy saving products. 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