Renewable Energy Certificates
Renewable Energy Certificates (RECs) are an electronic form of currency created by the Renewable Energy (Electricity) Act 2000 (also known as the RET scheme). One REC is equivalent to one megawatt hour of electricity generated by your solar PV power system. The price of RECs changes according to market conditions. As an owner of a solar PV power system, you can register, sell, trade or surrender RECs for systems up to 100kW.
In June 2010, the Federal Government announced amendments to the RET scheme. As part of these changes, the scheme will be split into two parts:
- the Small-scale Renewable Energy Scheme (SRES) which covers small-scale technologies such as solar panels and solar hot water systems
- the Large-scale Renewable Energy Target (LRET) which covers large-scale renewable energy projects like wind farms, commercial solar and geothermal.
Following these changes, RECs created under the SRES are now called Small-scale Technology Certificates (STCs), while RECs created under the LRET continue to be called RECs.
There are two ways you can be paid for your STCs:
- Assign your RECs when you purchase your solar PV system to a registered agent in exchange for a financial benefit which may be in the form of a delayed cash payment or upfront discount on your solar PV panel system (most consumers take this option); or
- Create the RECs yourself by finding a buyer and then selling and transferring them in the REC Registry.
For a list of registered agents, contact the Clean Energy Regulator.
STCs may be created for solar PV systems in batches of either one, five or 15 year deeming periods. At the beginning of each successive one or five year deeming period, the Regulator (from the Clean Energy Regulator) must be satisfied that your solar PV system is still installed and is likely to remain functional for the next deeming period. In order to claim RECs for the full 15 year deeming period upfront – which is the most common option - your designer/installer must be accredited by the Clean Energy Council. More information is available on the Clean Energy Regulator website click here.
The level of subsidy will depend on a number of factors, including the location (also known as the zone) of the solar PV system, the size of the system and the price of RECs at the time the system was installed.
Australia is divided up into various zones based on how much renewable energy can be generated by a solar panel in a given area. So the same sized system installed in Melbourne or Hobart (Zone 4) receives fewer RECs than those installed in Sydney (Zone 3) or Darwin (Zone 2) because Melbourne and Hobart have less sunshine so less solar energy is produced. The table below shows the level of financial support available from STCs on solar PV systems in the major capital cities of Australia.
Renewable Energy Certificates - Level of financial support
|City||Zone||Rating||System Size||Deeming Period||Total REC Entitlement||Total Subsidy|
|Adelaide||3||1.382||x 1.5 kW||x 15 (years)=||31||$1240 (31 RECs x $ 40)|
|Brisbane||3||1.382||x 1.5 kW||x 15 (years)=||31||$1240 (31 RECs x $ 40)|
|Canberra||3||1.382||x 1.5 kW||x 15 (years)=||31||$1240 (31 RECs x $ 40)|
|Darwin||2||1.536||x 1.5 kW||x 15 (years)=||34||$1360 (34 RECs x $40)|
|Hobart||4||1.185||x 1.5 kW||x 15 (years)=||26||$1040 (26 RECs x $40)|
|Melbourne||4||1.185||x 1.5 kW||x 15 (years)=||26||$1040 (26 RECs x $40)|
|Perth||3||1.382||x 1.5 kW||x 15 (years)=||31||$1240 (31 RECs x $40)|
|Sydney||3||1.382||x 1.5 kW||x 15 (years)=||31||$1240 (31 RECs x $40)|
Figures based on a $40 market rate for RECs
For more information, contact the Office of the Renewable Energy Regulator.