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F.A.Q - RECs

Below is a selection of common questions we get from customers on the topic of Renewable Energy Certificates.

 

Information within this FAQ has been organised into common 'Subject Segments' to make it easier for you to find the answer to your questions.

Just click on one of the Subject Segments in the list below to be taken to the relevant FAQ's:

General Information about Renewable Energy Certificates (RECs)....

Eligibility requirements/rules for Renewable Energy Certificates (RECs)....

Renewable Energy Certificate Values....

Deeming Periods....

Claiming Renewable Energy Certificates (RECs)....


Please feel free to Contact a Clean Energy Consultant at any time to answer your questions .... We are here to help

 

General Information about Renewable Energy Certificates (RECs)....


When you install solar power, solar water heating and other renewable energy technologies you are helping to reduce greenhouse gas emissions.  This entitles you to create environmental credits called Renewable Energy Certificates or RECs for short.

The easiest way to understand Renewable Energy Certificates (RECs) is to think of them as being like share certificates, representing a specific unit of value. They are electronic commodities tradable for cash or a point-of-sale discount on the purchase of a qualifying Solar PV Power or solar Hot Water system. Each REC is equal to 1 Megawatt hour of renewable energy generation, and just like a share certificate, the value of a REC can move up and down reflecting the market forces of supply and demand.

RECs are part of the Mandatory Renewable Energy Target which is an industry development mechanism created by the federal government in 2001. The operation of RECs is coordinated by the Office of the Renewable Energy Regulator and governed by the Renewable Energy (Electricity) Act 2000 and the Renewable Energy (Electricity) Regulations 2001.

When you have a Solar PV Power or Solar Hot Water system installed, your system will be allocated a certain number of RECs. However, only a person who is registered with the Renewable Energy Regulator can actually receive RECs. That means you have two options:
  • You can apply to be registered yourself
  • Or you can assign those RECs to a registered agent of the Office of Renewable Energy Regulation ORER; such as the Clean Energy Centre.

The Renewable Energy Target was established in 2001 by the Australian government to support the uptake of renewable energy. It was structured so that by 2020, 20% of Australia’s electricity will come from renewable sources (solar, wind, hydro, biomass). The Office of the Renewable Energy Regulator administers the scheme under the Renewable Energy Act 2001.


Renewable energy is measured in Renewable Energy Certificates or RECs (see below for ‘What is a REC?’). Electricity retailers have to purchase a set number of RECs each year and ‘surrender’ them to the government or pay a penalty. The number they must surrender is a percentage of their overall electricity supply.


No. It is a market based certificate trading scheme designed to encourage additional generation of electricity from renewable sources.


Your system may be eligible for additional grants or rebates. For further information visit the Clean Energy Centre rebates section.


No you don’t. It’s the same as any other rebate you’d receive ie it’s not income but more a discount on the cost of your system. For example, if you buy a laptop computer and receive $100 cash back, that’s a discount of $100 on the computer and not $100 income made from the computer.


Eligibility requirements/rules for Renewable Energy Certificates (RECs)....


The Renewable Energy Certificate ( REC ) scheme covers 3 types of systems:
  • Solar water heaters and heat pumps
  • Small generation units – either solar PV (photovoltaic) systems, small wind systems, small hydro systems or small biomass systems
  • Power stations – medium to large scale systems e.g. large wind turbines. Unlike the first 2 categories, power stations create RECs on an ongoing basis. Green Energy Trading can't create RECs for these systems, instead they must register with The Office of the Renewable Energy Regulator to get RECs.


Several thousand solar water heater and heat pumps are eligible. The Office of the Renewable Energy Regulator (ORER) determines which systems qualify and they can be found at this ORER website page.

The Office of the Renewable Energy Regulator (ORER) also assess applications for new products. Renewable Energy Certificates (RECs) can only be created for products that are on the list here http://www.orer.gov.au/swh/register.html.


The amount of Renewable Energy Certificates ( RECs ) a system is eligible to create is determined by The Office of Renewable Energy Regulator. System size, type and location can influence the number of eligible RECs.  A Clean Energy Centre Consultant can inform you of the quantity of RECs created for varying system types and installation locations.


The Office of Renewable Energy Regulator verify all information provided to them before creating RECs. Claims will generally require an audit to be completed if a tank serial number is duplicated, another agent has already created RECs for the claim or RECs already exist at an address from previous or multiple systems. Audits can generally be resolved by providing pictures of the installation and serial numbers in question and some cases require Statutory Declarations.




 

Renewable Energy Certificate Values....


The number of RECs that apply to your system depend upon its size and your postcode. More RECs can be created in sunnier areas such as Alice Springs than in Melbourne or Hobart.

RECs are traded on the open market and the price can vary from day to day; just like the stock market. In the early part of 2010 prices ranged between $30 and $45 per REC. Depending on your postcode and the price of RECs, the value of RECs (including Solar Credits) that can be created on a 1.5 kW system is likely to be between $4,600 and $8,000. Higher amounts apply to larger systems. A Clean Energy Consultant can tell you the value of RECs for your system.

The federal government has announced plans to fix the price of RECs created by small systems at $40 each from 1 January 2011.

If you transfer your RECs to the a reseller and installer of Clean Energy Solar systems, such as the Clean Energy Centre, an agreed value for the RECs is locked in at that time, and the risk of fluctuating REC value is passed on to them.


If you would like to know the current price of a REC, it is best to contact a Clean Energy Centre Consultant.


Solar Zones affect how many RECs you can get for your system. Australia is segmented into Solar Zones Australia, Renewable Energy Certificates, Solar      Credits, Solar PV Power, Solar Hot Water - The Clean Energy Centre4 Solar Zones in accordance to the amount of average days and intensity of sunshine and, thus, the solar system’s ability to generate clean energy from the sun in a given area.  Solar Zones are applicable for both Solar PV Power and Solar Hot Water systems.

Zone 1 receives the highest degree of Solar Radiation and Zone 4 receives the least. If your property is in a high radiation zone (such as Zone 1 or Zone 2), you will receive more RECs in comparison to those installations location in Zones 4 and 4.


The specific Solar Zone location of your building will determine the quantity of RECs the system is eligible for.

 

Please find below maps and links for post code zone tables to determine the zone your PV, solar water heater or heat pump system.

Please note that the zones are different for PV and SWH systems.

 

Solar PV Power
Click to download the Solar PV Post Code Table

 

Solar Hot Water
Click to download the Solar Hot Water Post Code Table

 

 

Deeming Periods....


The deeming period is an estimate of the years the system will create renewable energy.  In essence, you are required to select the deeming period for how you want to claim your RECs. You have a choice of 5 or 15 years.

The maximum deeming period is 15 years after which no further RECs can be created. Five year deeming creates in batches. There is a creation for the first 5 years after installation and then at subsequent 5 year intervals. A 5 year deeming period means your RECs are generated every 5 years and can be sold on the open RECs market, delivering a financial return every 5 years. The upfront value you receive for each claim is less than received for the 15 year deeming period.

The 15 year deeming period means that the quantity of RECs is created for the entire 15 years upfront. This enables you to gain the financial benefit up-front for the full 15 year deeming period value.

To claim 15 year deeming; the system must be installed by an installer accredited with the Clean Energy Council. (Deeming periods are not applicable for solar water heating/heat pumps). All Clean Energy Centre installers are accredited with the Clean Energy Council.

IMPORTANT NOTE: The Solar Credits Multiplier is only applied once to the deeming period you select. Therefore, if you select the 5 year deeming period, the rebate benefit you will gain through the Solar Credits multiplier will be less than received from the 15 year deeming period. The majority of residential and business customers nominate a 15 year deeming period.


The deeming period is an estimate of the years your PV system will generate renewable energy. The maximum deeming period is 15 years. You can claim RECs for the full 15 years at once or you can put in a claims every 5 years or you can put in one claim every year. RECs for small Wind & Hydro systems can be claimed in 1 & 5 year deeming periods. Note that this doesn’t apply to solar water heaters and heat pumps.



Claiming Renewable Energy Certificates (RECs)....


Renewable Energy Certificates ( RECs ) can only be created after a system is completely installed. Time limits apply for the creation of RECs based on the installation date.
Solar Water Heater/Heat Pump RECs must be created within 12 months of the install date.
  • For all Solar PV Power and Wind Generation systems installed on or after 6 October 2007, RECs can only be created within 12 months of the installation date.
  • For wind, solar (photovoltaic) and hydro systems installed before 6 October 2007 choosing 5 year deeming, the RECs can be created at any time after the installation date.


The REC price is quoted excluding GST. Systems installed for business use and owned by a business registered for GST is able to receive the trading price plus GST. Systems installed for domestic use are not eligible to receive GST.


If you’re the system owner and you are claiming the Renewable Energy Certificates ( RECs ) you will need:
  • A completed assignment form
  • Proof of purchase (typically an invoice or electrician’s/ plumber’s certificate of compliance)


When installing a solar water heater/heat pump the serial number of the tank is required in order to create the Renewable Energy Certificates ( RECs ). The serial number is located on the tank and is unique for each system.

For Solar PV Power systems, each panel serial number is required. The panel number is unique for each solar panel installed. These are generally located on the panel themselves.


Yes, RECs can be created for the additional kW capacity that has been added to the existing system.

However additional information is required, such as where the upgrade is located in relation to the existing system, a written description and/or a diagram as well as photos where possible. The Clean Energy Centre will generally perform this for you if we undertake the installation.


There are a number of organisations that can facilitate the trading and claim of Renewable Energy Certificates ( RECs ). These are:


No you don’t. It’s the same as any other rebate you’d receive ie it’s not income but more a discount on the cost of your system. For example, if you buy a laptop computer and receive $100 cash back, that’s a discount of $100 on the computer and not $100 income made from the computer.