12/12/2025
Heat pump and solar project activity is directly shaping how many certificates are created, and in some cases how many certificates each project earns.
Rising or shifting heat pump uptake is influencing VEEC and STC volumes, while changing rooftop solar installation rates are driving STC creation trends and occasionally tightening supply.​
Heat pumps and VEEC/STC creation:
Under state schemes like Victoria’s VEU, commercial and industrial heat pump water heater upgrades can generate significant VEECs, and recent rule updates have tightened eligibility and minimum product requirements, which can change which projects qualify and how many VEECs they receive. Larger, higher‑capacity heat pump systems and updated emissions factors can boost VEEC counts per project, increasing total certificate creation even if project numbers stay flat.​
For hot‑water heat pumps in particular, installers often bundle state certificates (VEECs or ESCs) with federal STCs, so growth in high‑efficiency heat pump projects tends to lift combined certificate creation across both schemes, although rule changes (for example, excluding replacement of existing heat pumps in some VEU activities) can limit new VEECs from certain jobs.​
Solar PV rates and STC creation:
STC creation under the Small‑scale Renewable Energy Scheme tracks rooftop solar activity: when installations soften, STC creations tend to dip, and when activity rebounds, creations rise. In early 2025, rooftop PV installations and capacity were down compared with a year earlier, and quarterly STC creations were lower than expected, leading some liable entities to rely more on the STC Clearing House to meet surrender obligations.​
Despite a short‑term dip, average system sizes are increasing and total annual capacity remains high, so STC creation is still substantial; policy drivers like new home battery incentives and replacement of older systems are expected to push solar installations back up later in 2025, which would increase STC creation volumes again.
​
Interaction of project rates and certificate markets:
When heat pump and solar project rates accelerate, certificate creations typically increase with a lag (up to 12 months for STCs), which can ease market tightness but also expose installers to higher creation and administration workloads. Conversely, when project rates slow or eligibility tightens (as with some heat pump activities under VEU), certificate creation can fall below expectations, supporting higher certificate prices and creating an incentive for more projects to proceed sooner.
