A Renewable Energy Certificate is a measurement of renewable energy that can be traded or sold.

Australia's Renewable Energy Target (RET), requires energy retailers to purchase a set amount of certificates each year, so there is a constant demand for these certificates.

You can be eligible to create certificates under either:

  • the Small-scale Renewable Energy Scheme (SRES), for systems under 100 kW. This is the scheme that applies to residential solar PV systesm.
  • the Large-scale Renewable Energy Target (LRES), for systems above 100 kW.

Small-scale Technology Certificates (STCs)

STCs are provided under the SRES, and help reduce the upfront cost of installing your solar PV system.

STCs are an electronic form of currency and are allocated to you when you install a solar PV system. One STC is equivalent to one megawatt-hour of electricity generated by your solar PV system.

The price of STCs changes according to market conditions. The total level of subsidy you receive will depend on a number of factors, including the location and size of the solar PV system and the price of STCs at the time the system was installed.

There are two ways you can be paid for your STCs:

  • Assign your STCs to a registered agent in exchange for a financial benefit when you purchase your solar PV system. This benefit may be in the form of a delayed cash payment or an upfront discount on your solar PV system (most consumers take this option).
  • Create the STCs yourself by finding a buyer and then selling and transferring them in the Renewable Energy Certificate (REC) Registry.

For more information, contact the Clean Energy Regulator.

What size subsidy will I recieve?

Australia is divided up into zones based on how much renewable energy can be generated by a solar panel in a given area.

A system installed in Melbourne or Hobart (zone 4) receives fewer STCs than the same sized system installed in Sydney (zone 3) or Darwin (zone 2). This is because Melbourne and Hobart receive less sunshine, so less solar energy is produced by the system.

You can use the REC Registry calculator to determine your approximate level of subsidy.

The table below shows the level of financial support available from STCs on solar PV systems in the major capital cities of Australia.

City Zone Rating System size Deeming period Total STC entitlement Total subsidy
Adelaide 3 1.382 x 3 kW x 13 (years)= 53 $1855 (STCs x $35)
Brisbane 3 1.382 x 3 kW x 13 (years)= 53 $1855 (STCs x $35)
Canberra 3 1.382 x 3 kW x 13 (years)= 53 $1855 (STCs x $35)
Darwin 2 1.536 x 3 kW x 13 (years)= 59 $2065 (STCs x $35)
Hobart 4 1.185 x 3 kW x 13 (years)= 46 $1610 (STCs x $35)
Melbourne 4 1.185 x 3 kW x 13 (years)= 46 $1610 (STCs x $35)
Perth 3 1.382 x 3 kW x 13 (years)= 53 $1855 (STCs x $35)
Sydney 3 1.382 x 3 kW x 13 (years)= 53 $1855 (STCs x $35)

 

Zone Rating x Rated Power Output (3 kW) x Deeming Period (15 years) = Total STC Entitlement.
Figures based on the $35 STC rate. This is an approximate rate and the STC price will vary.
For more information, contact the Clean Energy Regulator.

The deeming period will decline by one from 1 January each year. These figures are current as of 1 April 2018.

Large-scale Generation Certificates (LGCs)

Available for registered power stations under the Large-scale Renewable Energy Target (LRET), one LGC is equivalent to one megawatt hour of generation above a specified baseline.

LGCs can only be created when:

  • you are formally registered as a power station with the Clean Energy Regulator (CER)
  • you are assigned a REC Registry account through which you can create LGCs, and
  • the generation has been proven and validated by the CER.

Once this has occurred, you can sell your certificates to electricity purchasers (such as your retailer) who have liabilities under the RET.

LGCs cannot be deemed upfront, so the LGC market can be more administrative work than STCs. To create certificates:

  • the CER will assess LGCs on a monthly, quarterly or annual basis only
  • you must create LGCs for generation by the end of the calendar year following the year of actual generation
  • you are required to submit documentation on generation data to verify and calculate the eligible electricity generated. (You must ensure you have adequate metering arrangements to collect this data, usually required on a half-hourly basis.)
  • you must also ensure your LGCs are correctly created in the REC Registry
  • as an accredited RET power station, you are also obligated to submit an Electricity Generation Return report to the CER annually.

See the CER website for further details

Once you have created and registered your certificates, you will need to find a buyer, which may either be a liable entity (such as an electricity retailer) or a registered LGC trader.

Once you find a buyer, you will need to:

  • negotiate the volume and price of the LGCs you wish to sell, and the method of payment (if you sell to your electricity retailer, they may wish to credit your electricity bill rather than make direct payment)
  • enter into an agreement with the buyer, understanding that the sale of LGCs is a contract for the sale of goods and so must be accompanied by the appropriate documents
  • transfer your LGCs to the buyer within the REC Registry once payment has been received.

Negotiatiing price and payment for your LGCs is your responsibility. The CER will not facilitate this process nor get involved in any disputes.

The price of LGCs is set by the market, not the CER. Updated information on LGC prices can be found on the Clean Energy Council website (members only) or via LGC traders such as Green Energy Trading.