I’m Joe from Smarta Switch in Brisbane. Every few weeks I get a version of the same question, usually from a business owner running sites in more than one state: “why does my Victorian site’s bill have a charge my Queensland site doesn’t?” Or a Brisbane owner benchmarking against a mate’s bill in Sydney and assuming one of them is being ripped off, because a line item on one bill doesn’t appear on the other.
Neither of them is being overcharged. There are two environmental charges every business in Australia pays, no matter what state you’re in, and then a handful of extra ones that only exist in certain states. Once you know which is which, the “mismatch” stops looking like an error and starts making sense.
We’re paid by the energy retailer when you switch, never by you.
The one-line version
- LRET and SRES: federal schemes, on every business electricity bill in Australia, no matter the state.
- VEET: Victoria only.
- ESS and PDRS: NSW only.
- Queensland: currently has no equivalent state-based certificate scheme line item, so a Queensland bill will look lighter in this section than a Victorian or NSW one.
That’s the whole logic. Here’s the detail.
Why these charges exist at all
Governments, federal and state, run schemes to push investment into renewable energy and energy efficiency. Rather than fund them straight out of the budget, they make it a market: certificates get created for eligible renewable generation or eligible efficiency activity, and electricity retailers are legally required to buy a set number of those certificates every year.
Retailers pass that cost on to every customer, because it’s a genuine cost of doing business for them, not something they can quietly absorb. Depending on the retailer, it shows up as its own line item on your bill, or it’s folded straight into your energy rate so you never see it broken out at all. Either way, you’re paying it if you’re drawing grid electricity anywhere in Australia.
This isn’t a Smarta Switch opinion, it’s federal and state government policy, and it applies whichever retailer you’re with. No retailer can make it disappear for you, and I’ll get to why below.
The two charges every business bill in the country carries
LRET, the Large-scale Renewable Energy Target
LRET funds big-ticket renewable generation: the wind farms and solar farms that feed power into the grid at scale. It works through tradeable certificates called LGCs (Large-scale Generation Certificates). Eligible renewable generators create LGCs for the power they produce, and retailers are required to buy enough LGCs to match a set percentage of the electricity they sell to customers.
That obligation is federal and applies to every retailer selling electricity anywhere in the country. So LRET is on your bill whether your site is in Cairns, Coffs Harbour or Colac, either as a named line item or built into your rate.
SRES, the Small-scale Renewable Energy Scheme
SRES does the same job at the small end: the solar panels and solar hot water systems installed on homes and small businesses. It runs on certificates called STCs (Small-scale Technology Certificates), created when an eligible small-scale system is installed, and again, retailers are required to buy them.
Also federal, also on every bill nationally. If you’ve ever wondered why a business with no solar panels of its own still pays something that helps fund other people’s solar installs, that’s SRES. It’s a national scheme, not a user-pays charge tied to your own site.
The charges that only turn up in some states
This is where bills genuinely start to differ, and it’s the bit most owners have never had explained to them properly.
VEET / VEEC, Victorian Energy Upgrades (Victoria only)
Victoria runs its own scheme on top of the two federal ones, generating Victorian Energy Efficiency Certificates (VEECs) from approved energy-saving activities carried out in Victorian homes and businesses. Retailers selling electricity in Victoria carry their own obligation to buy VEECs, and that cost is specific to Victorian sites. There’s no equivalent charge on a bill from a site outside Victoria.
ESS and PDRS, NSW only
NSW runs two of its own: the Energy Savings Scheme (ESS) and the Peak Demand Reduction Scheme (PDRS). Same underlying idea as VEET, certificates created from eligible efficiency or demand-reduction activity, retailers obligated to buy them, cost passed through, but specific to NSW. A bill from a NSW site can carry both ESS and PDRS stacked on top of LRET and SRES.
Queensland: no equivalent line item, currently
Queensland doesn’t currently run a state-based certificate scheme of its own. So if you line up a Queensland bill next to a Victorian or NSW bill, you’ll see LRET and SRES on all three, but the Queensland bill won’t carry a VEET, ESS or PDRS-style charge that the other two do. That’s not your Queensland retailer doing you a favour, and it’s not the Victorian or NSW retailer overcharging. It’s a genuine difference in which state government runs which scheme.
So why don’t my multi-site bills match?
If you run sites in more than one state, say a café in Brisbane and a second site in Melbourne, this is the exact reason your bills won’t be line-for-line identical even on the same retailer, same usage, same month.
- Both sites carry LRET and SRES, because those are federal.
- The Melbourne site also carries VEET, because Victoria runs that scheme.
- The Brisbane site doesn’t carry an equivalent, because Queensland doesn’t run one right now.
We touched on this briefly in our guide on how to read a commercial electricity bill, which lists environmental certificate costs as one line to expect. This guide is the deeper version, for owners specifically trying to work out why that line doesn’t match across states.
None of this is a billing error. If you want a second pair of eyes on it anyway, that’s what we’re here for.
Can Smarta Switch negotiate these off my bill?
No, and any broker who tells you they can is either wrong or stretching the truth. LRET, SRES, VEET, ESS and PDRS are all government-mandated scheme costs. Retailers don’t set the rules, they’re required to recover the cost, and it’s the same underlying obligation whichever retailer you’re with.
What we do get stuck into is everything the retailer actually controls: your energy rate, the retailer’s margin on demand and supply charges, and the term and structure of your contract. The environmental charges aren’t part of that conversation, they’re a fixed cost of using grid electricity in Australia, much like GST is a fixed cost of buying most things. Knowing that helps you spend your energy, pun intended, arguing about the parts of the bill that are actually worth arguing about. (How to lower a commercial electricity bill.)
What to do this week
- Find the line on your bill. Look for “environmental,” “green scheme,” “LRET/SRES,” or your state scheme name by name. If it’s not broken out, it’s folded into your rate, ask your retailer to show it separately if you want to see it.
- If you run sites across more than one state, stop comparing these lines directly. A Victorian or NSW site will always show more here than a Queensland site. Compare the energy rate and the retailer-set charges instead, that’s where genuine differences, and genuine savings, actually show up. (Queensland tariffs explained, if that’s the bit you’re stuck on.)
- If something still looks off, get it checked. Upload your bill on this page or email hello@smartaswitch.com.au and we’ll tell you what’s a genuine state scheme difference and what’s actually worth querying. No cost, no commitment, because we’re paid by the energy retailer when you switch, never by you.
Different line items on two bills isn’t proof of a mistake. Now you know which charges are national, which are state-based, and what your own state does and doesn’t run, so you can read your bill instead of just guessing at it.
Joe Lawrence, Co-founder, Smarta Switch Australia 0435 642 592 · joe@smartaswitch.com.au