Market Insights: Energy & Certificate Prices
Energy and certificate prices have increased substantially in the last quarter, making solar and battery projects more attractive.
With the soaring energy expenses and elevated certificate prices nationwide, the appeal of integrating solar energy is undeniable, particularly in Victoria where it's a clear winner. If you haven't embraced solar power yet or are contemplating expanding your solar capacity or incorporating a battery system, there's no better time than now to take the plunge.
Energy Prices
After reaching relative lows in January 2024, electricity prices have increased steadily in Feb, Mar and Apr, followed by a dramatic increase in May. The May increase was caused by the NSW market entering an 'Administered Price Period' on 8th May 2024, which occurs when spot energy prices remain too high for too long and the market operator steps in to control pricing. This spike in spot prices flows across borders and into wholesale futures prices as shown in the Australian Power Index.
The increase in energy prices increases the dollar savings that will result from implementing solar and battery projects. If we take a 2 MW solar project in Victoria as an example, the payback period goes from 4.3 years to 3.8 years as wholesale energy prices move from $60/MW to $80/MW (network and environmental charges remaining static).
$60/MW Electricity Prices | $80/MW Electricity Prices |
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Certificate Prices
For medium-large solar and battery projects, the main incentives available are the Large Generation Certificate (LGC) and the Victorian Energy Efficiency Certificate (VEEC). Certificate prices are provided by our partners Ecovantage.
LGCs can be generated on a regular basis (typically annually) upon proof of electricity generation, with 1 MWh of energy produced equalling 1 LGC. Projects larger than 100 kW can generate LGCs anywhere in Australia. LGC prices have remained relatively stable in 2024, with slight increases observed for 2025 and 2026 LGCs and robust pricing out to 2028.
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$80 VEEC Price | $115 VEEC Price |
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The combination of high energy costs and high certificate prices across Australia make implementing solar immensely attractive in most cases and a no-brainer in Victoria. If you're yet to implement solar, or are considering adding more solar or a battery, now is the time to start.
To understand the costs and benefits of solar and batteries at your site, start an assessment now. Our team of solar engineers will work with you to find the optimal solution for your decarbonisation and cost-reduction needs.