Understanding Solar Incentives in Victoria

Solar PV is one of the most accessible and widely adopted measures by Victorian businesses to reduce electricity costs and lower emissions. Whether you are a business considering a rooftop solar installation or looking to optimise the financial case for a broader decarbonisation strategy, understanding the available incentive schemes is essential to unlocking value and appropriately valuing the business case.

With several state and federal incentives available, choosing the right pathway can make the difference in getting a business case across the line as it can significantly strengthen the financial case for investment, and it may even provide an opportunity to further lift the upgrade spec.

This blog explains the different solar incentives available to Victorians, and how they may be applied to maximise value.

Victorian Energy Upgrades (VEU) Program

Standard Measurement & Verification (M&V)

What it is: A detailed method that calculates savings by comparing energy use at the grid access point meter before and after the solar system is installed.

Best suited to: Large or complex projects – e.g., >200kW, or when solar is installed alongside other projects such as lighting upgrades, HVAC improvements, control systems optimisations, etc. All savings across all projects could be verified at once under this method.

Why use it:

• Works for any solar system size

• Delivers one of the highest potential incentives for solar under the VEU

• Ideal for sites that implement multiple different projects (bundle[MO1] [JM2] d upgrades) at a single site

Things to know:

• Requires detailed energy analysis

• Takes longer to deliver incentives

• Higher service fees

• Exports are not eligible for VEECs, nor is generation from pre-existing systems

• Cannot be combined with STCs or LGCs

Typical timing for certificate creation: Around 12–15 months after project completion

Specified Measurement Method 4 (SMM 4)

What it is: A simplified measured approach that uses actual solar generation data instead of modelling of consumption at the grid access point meter.

Best suited to: Straightforward commercial solar installations with appropriate metering in place.

Why use it:

• Lower administration and lower risk than traditional M&V

• Still delivers strong incentive value

Things to know:

• Exports are not eligible for VEECs, nor is generation from pre-existing systems

• Incentives are typically around 10% lower than standard M&V (up to 20% less if paired with batteries)

• Requires 12 months of generation data, but VEECs can then be created without much delay.

• Medium-high service fees

• Cannot be combined with STCs or LGCs

Typical timing for certificate creation: 12 months of metering, then a few weeks for VEEC creation and validation

NABERS-Based Method (Benchmark Rating)

What it is: A method that links incentives to improvements in a building’s NABERS Energy rating.

Best suited to: Buildings that are rateable under NABERS.

Why use it:

• Supports staged upgrades over multiple years

• Well-suited to combining solar with other efficiency upgrades

• Can achieve incentive outcomes similar to standard M&V

Things to know:

• Requires a NABERS rating before works commence to set the baseline

• Requires another NABERS rating before savings can be determined. To capture the full effect of an upgrade, this rating is typically completed not less than 12 months later.

• Lower service fees, but there are costs involved in completing the above ratings. These costs are separately charged by a NABERS accredited assessor and not (typically) covered in the incentive discussions.

• Cannot be combined with STCs or LGCs

Typical timing for certificate creation:12-month post upgrade rating period to lodge the reporting rating, then a few weeks for VEECs creation

Activity 47 – Commercial & Industrial Solar (Deemed Method)

What it is: The only deemed (non-measured) solar incentive pathway under the VEU, using predefined savings factors instead of measurement.

Best suited to: Commercial and industrial solar systems ranging from 30 kW to 200 kW.

Why use it:

• Fastest incentive delivery (often within weeks)

• Stackable with STCs and LGCs 

Things to know:

• Maximum of one VEEC claim per NMI

• Works for sites with or without existing solar

• STCs only apply if not claimed previously for an existing Small Generation Unit

• For systems >100kW, stacking with STCs/LGCs requires commissioning in discrete stages and careful timing of claims to ensure eligible claims under the RET and under the VEU.

• Continued eligibility under the M&V method(s) for capacity above 200kW

• Preferred method for systems 30–200 kW if STCs can be applied as well

• Lower service fees make this pathway competitive at smaller system sizes, especially when stacked with STCs

• Typical timing: 1–2 weeks after project completion

These figures were calculated off a VEEC price at $80 and STC price at $40.

Key takeaway:

While every project is different, some clear patterns tend to emerge:

• For systems up to 200 kW, Activity 47 combined with STCs is generally the most attractive option.

• If STCs cannot be claimed anymore, measured pathways like M&V, SMM 4 or NABERS can deliver better overall value so long as exports are not extraordinarily high.

Once a solar system is installed, the available incentive options may already be locked in. Certain pathways can exclude access to federal certificates, require long data collection periods, or offer higher financial returns while involving more complex processes and higher fees. Designing and installing the system with the incentive options in mind helps ensure the project is installed and documented correctly for the desired incentive. For this reason, incentive planning should take place before installation rather than after.

EC Focus is accredited across all VEU solar pathways and is also a registered agent under the RET for both STCs and LGCs. Our team has extensive experience in compliance, measurement and delivering projects that are audit ready.

Whether a project involves installing a 30kW system, a multiple megawatt system, or you are combining solar with other energy upgrades, early advice can significantly increase the available incentive value. In Victoria, the project planning can be just as important as the panels themselves.

If you would like support navigating the available options or understanding how much value your project could unlock, we would be happy to help identify the most suitable pathway for your site. Get in touch with one of our experts today!

EC Focus, turning decarbonisation into a funded strategy. Accelerating Net Zero with Financial Incentives