Victoria delays on energy efficiency targets, changes to lighting scheme

Energy efficiency advocates have called on the Victorian government to come to a decision as soon as possible on  2022-2025 targets for the state’s Energy Upgrades program, or VEU – a market-based scheme that encourages households and businesses to reduce their energy consumption.

The Victorian government was due to release updated 2021 targets for the VEU at the end of last month, but has decided to keep them the same for the year due to the impact of Covid-19 on government processes.

The scheme incentivises installers to develop affordable product offerings at reduced cost to customers to overcome ongoing barriers to changing out inefficient equipment, including lack of upfront capital, and lack of understanding about ongoing bill savings and quick pay-back periods.

Typical upgrades incentivised through the VEU include lighting, air conditioning and building management systems and weather sealing.

The Department of Environment, Land, Water and Planning is also expected to announce key changes to Victoria’s lighting incentives under the scheme, mooted due to decreasing unit costs and the introduction of new standards from 2020. This, too, appears to have been postponed.

In a statement on Wednesday, the Energy Savings Industry Association said the industry was “very disappointed” with the lack of certainty that this approach was causing, but hoped to support the government to come to a decision on 2022 targets.

“We recognise that we need to support government to ensure it can come to a landing on the 2022-2025 targets as soon as possible, well before the end of 2020,” said ESIA president Rod Woolley.

“The VEU is an excellent vehicle for delivering economic stimulus and creating jobs for Victoria and keeping more money in the pockets of all Victorians.

“In coming weeks, the government has indicated, there should be a landing on changes to lighting upgrade incentives, some of which have been suspended due to Covid-19.

“The VEU is reducing annual electricity consumption by up to five per cent a year. This downward pressure on wholesale electricity costs is the unsung hero of energy policy,” Woolley said.

“We don’t want to lose any further immediate benefits that the VEU can provide. The 2020 target has already been met and the 2021 target could well be reached by the end of 2020. The ESIA continues to advocate for a bigger target sooner to stimulate more energy upgrades.”

The ESIA also noted that while Covid-19 had proven disruptive for policy-makers, it was shaping up as the perfect time for many businesses to embark on major energy efficiency upgrades and retrofits.

“Facilities managers and installers including electricians are champing at the bit to complete energy upgrades while observing COVID-safe practices,” Woolley said.

“Many sites are perfectly placed now to do upgrades with people being advised to work from home where possible.

“We urgently need the government to avoid further delays, warding off more job-shedding in the sector in coming months,” he said.