How to maximise sales with compliant VEEC projects: Our best practice tips

The Victorian Energy Upgrades (VEU) program is an initiative established by the Victorian State Government. The scheme aims to promote energy efficiency by encouraging households, businesses, and industries to adopt more energy-efficient technologies and practices. Under the VEU Program, eligible energy-saving activities (such as renewable energy, water, and waste reduction technologies) generate Victorian Energy Efficiency Certificates (VEECs), which can be sold to electricity and gas retailers. The program is designed to reduce greenhouse gas emissions, lower energy bills, and stimulate the green economy by creating a market for energy-efficient products and services.

Since the inception of the project, over 85 million certificates have been created. In 2022, the program registered over 7.8 million certificates which equates to a reduction of approximately 7.8 million tonnes of greenhouse gas emissions. Over 818,000 energy efficiency projects were delivered in that year alone. However, there were also $1.5 million paid by energy retailers in penalties for breaching the Code of Conduct.

Channel Partners who are planning on selling projects that are eligible for VEECs to their clients need to ensure that they adhere to the Code of Conduct Guideline to avoid compliance notices and penalties. In this article, we go into detail on how you can ensure your proposals are compliant and you’re giving your clients the information they need to know to make an informed decision on their VEECs project.

How VEECs work

Unlike STCs which are paid up front, VEECs go through a 12-month measurement and verification process from the point of commission. Estimates made by Accredited Persons (ACPs) such as Ecovantage and Northmore Gordon are exactly that; estimates. Measurement is based on the actual performance of the system which can vary due to environmental and site usage factors.
Measurement happens for the 12-month period from the system being commissioned. At the end of the 12-month measurement period, certificates are generated and then paid, a process that can take a further 6-12 months.

Are your proposals compliant?

Channel Partners who are including VEECs on their proposals need to ensure their proposals are compliant with the code of conduct guideline, or risk penalties such as fines, exclusion from the program, or litigation.

Ecovantage are VEECs specialists and an Accredited Provider under the Victorian Energy Upgrades (VEU) program. Katie Tebbatt, Business Development Manager, says that Channel Partners need to ensure they are aware of the Code of Conduct as not adhering to this can put them at risk.
“Channel Partners need to make sure that they’re accurately representing the program. If they were to misconstrue what the program is, or if they were to engage in aggressive sales tactics, that would be a breach of the code of conduct,” says Ms Tebbatt. “If the Channel Partner is found to have given misleading or incorrect or false information, that Channel Partner can be blacklisted within the VEU program, and their installations will not be processed. They need to make sure that they are giving true and correct information.”

Northmore Gordon are energy and carbon engineering consultants and an Accredited Provider under the VEU Program, who work with Channel Partners to register their certificates. Group Managing Director Hamish McGovern believes that all Channel Partners should be familiar with the Code of Conduct and how VEECs work so that they can deliver the most accurate information for their client.

“You’ve got to conform with Australian consumer laws, so you can’t be grossly overestimating the certificates. If you have a solar retailer showing a higher figure for a better outcome for their customer, that’s also going to overestimate the VEECs,” says Mr McGovern. “The bigger risk (for Channel Partners) is then that the number of VEECs that are registered are going to be much smaller than the client expects.”

Common compliance errors

Here at Sustainable Australia Fund, we’ve seen proposals that could be in breach of the code of conduct and want to ensure our Channel Partners have the best chance of success by creating proposals that clearly communicate how VEECs work to their clients.

Here are some common errors found in proposals:

• Proposals list estimates for the VEECs as discounts, which is breach of the code. VEECs are not discounts and may not be marketed as such.

• Unlike STCs, VEECs are not paid up-front. Proposals that say as such are in breach of the code.

• Proposals guarantee the number of certificates and value of certificates at the start of the project. This is breach of the code, as it is an estimate subject to measurement and verification. Channel Partners should communicate to their clients that the certificate values could be up to that amount, but are based on actual performance, and as a result are likely to come in at a percentage of the total estimate.

• Proposals state that certificates are paid at the 12 or 24-month mark after the system is commissioned. This is incorrect, as the certificates need to be generated and credited, which can take anywhere from 6 months up until a year. Channel Partners should communicate in their proposals that only the certificates created are paid 18-24 months after the system is commissioned, and this may differ from the estimations provided up front.

Setting yourself up for success

While having a good understanding of the process and the Code of Conduct is essential, here are ways that Channel Partners can maximise the success of their proposals and guarantee a great customer experience.

1. Engage an Accredited Partner ASAP.

Start speaking with an Accredited Partner as early as possible in the quoting process, so that they can guide you through what’s required.

“Generally, Channel Partners want to make the proposal have the best return on investment and the lowest cost, so using the VEECs to help fund it is an important part of the quoting process,” says Mr McGovern. “We would want to get involved during the quoting stage. The Channel Partner needs to engage a VEECs partner to help estimate what the value from the VEECs is going to be.”

Ms Tebbatt says having a VEECs partner on board early in the quoting process increases your likelihood of an accurate estimate.

“My advice would be to be as soon as you have a project on the horizon (still in the quoting stage), engage your VEECs partner early, and often,” says Ms Tebbatt. “We like to quote the project from the first time that a quote is prepared so that there’s no incorrect estimates given, and we’ll also be there every step of the way to answer questions that may come up.”

2. Ensure your energy consumption analysis is as accurate as possible.

In the case of VEECs estimates, you get out what you put in, so accurately predicting how the site will be used in the 12 months following install is incredibly important.

“When a channel partner is preparing a quote, they should have done an analysis of the self-consumption of that solar system based on the interval data from the site, preferably based on the most recent 12 months,” says Ms Tebbatt. “They should also take into consideration if there any changes to the site that may impact that self-consumption; are there any major changes that have happened in the last 12 months or that are coming up in the next 18 months? Have there been any other major upgrades and is there any changes to the way the clients operate? Because all of that is going to impact the VEECs outcome, which is therefore going to impact the rebate for that site.”

Accredited Providers also recommend not overestimating the energy usage, as this can backfire.
“Our estimate is based on the on-site usage figures provided by the solar retailer or Channel Partner,” says Mr McGovern. “Understanding the energy usage at the site important for the customer to achieve their return on investment; if the Channel Partner overestimates how much solar is going to be used on site, then the bill savings won’t be as high and the VEECs won’t be as high.”

3. Lean on Accredited Providers to help communicate VEECs to your clients.

Channel Partners can and should leverage the expertise of Accredited Partners throughout the whole of the quoting journey. Some Accredited Partners offer meetings or ride-along services that can help answer client questions directly.

“We will have a meeting with the Channel Partner, the client and ourselves, and then that way we’re sitting there besides the channel partner to answer questions around the process,” says Ms Tebbatt. “This gives that channel partner that expertise in the client’s eyes because they’ve engaged people who do this day in and day out.”

4. Ensure you have approval prior to starting works on the site.

Mr McGovern says it’s of paramount importance that an Accredited Provider is engaged and all paperwork is completed and submitted before the installer begins work on site.

“We need to submit three things to get the project registered with the regulator: a registration of interest form, a scoping plan, and a project plan. Those three gates need to be passed before any work start on site,” says Mr McGovern. “Otherwise, it can invalidate the client or is very likely to invalidate our ability to register the VEECs. They then won’t be eligible to register.”

5. Understand and communicate the timeline for registration and payment.

VEECs are not paid out at the beginning of a project, or even upon installation, but after a lengthy process of measurement, verification, and registration.

“It usually takes about 18 months from commissioning to register and monetise the certificates as we must measure 12 months’ worth of upgrade or energy usage,” says Mr McGovern. “It’s a measured and modelled method.”

Communicating this timeline to your client can help to mitigate any confusion they have and ensure they do not have unreasonable expectations of when they will receive payment.

Compliance training with SAF

The team at Sustainable Australia Fund are here to help get your proposals over the line with your clients while ensuring that you aren’t in breach of the code of conduct.

That’s why we offer compliance training for your team to equip you with the knowledge and skills you need to write compliant VEECs proposals as part of our Channel Partner Program.

Once you’ve become an Accredited Channel Partner, you will be able to offer SAF’s Flexi VEEC up front offer for any VEEC project proposals. If you have current sales opportunities that are hard to close because the VEEC benefit won’t materialise until at least 18 months after the sale, we can help.
SAF’s Flexi VEEC offer can provide up to 75% of the VEEC value up-front and up to 2% interest rate discounts for the life of the loan and is available to Victorian businesses installing solar arrays above 100kW or other VEEC eligible systems. The flexibility of this offer gives customers up-front benefits and more cash in their business today.

Talk to us today about how our Flexi VEEC up-front offer can help grow the size of your proposals!