Renewable Energy Certificates (RECs)
You could be eligible to receive Renewable Energy Certificates (RECs) if you install one of the following small scale energy systems at home:
- a solar power (photovoltaic - PV) system
- a wind power (turbine) system
- a hydro (water) power system
- a solar hot water system
- a heat pump hot water system
RECs are an electronic form of currency. You get 1 REC for each 1 mega watt hour (MWh) of electricity that can be generated or fossil fuelled electricity displaced by a small scale energy system you install.
Under the Solar Credits scheme, you will get multiple RECs for the first 1.5 kilowatts of eligible small scale renewable energy systems that produce electricity like solar, wind and hydro. Solar Credits do not apply to hot water systems.
You may not be entitled to RECs if your home is being built by a builder or property developer and the system is included as part of the building contract. In this case, RECs are likely to be created and traded by the builder.
The Office of the Renewable Energy Regulator (ORER) administers the Renewable Energy Target, which includes overseeing the creation, validation, trading and surrender of RECs.
The financial benefits of RECs
There are two ways that RECs can give you a financial benefit:
- You can sign your RECs over to a registered agent in return for a discount or a cash payment at the time you buy your new system.
- You can create, sell and transfer your RECs directly to a buyer via the REC Registry.
Option 1 - signing your RECS over to a registered agent
Most people find it easier to assign their RECs to a registered agent when they pay for their new system. Registered agents include installers and retailers of solar water heaters and small generation units.
The agent will usually:
- Determine whether your system is eligible for RECs.
- Identify how many RECs will be created.
- Offer you a financial benefit in return for the RECS. This could be a cash payment or an upfront discount on your new system.
The value of a REC is not a fixed price. Different agents will have different prices and payment processes for taking your RECs.
You should contact a range of agents before entering into any contractual agreement. The contractual agreement is called a REC Assignment Form.
See step by step information on:
- Assigning RECs when you buy a Solar Hot Water Heater
- Assigning RECs when you buy a Small Generation Unit (e.g. a small scale solar, hydro or wind power system)
Option 2 - individual trading
Some people choose to create, sell and transfer their RECs using the REC Registry.
The REC Registry is an online market based trading system where you have to negotiate a trading price with registered buyers.
The process includes:
- Determine if your new system is eligible.
- Determine how many RECs your new system will be entitled to.
- Become a registered person on the REC Registry.
- Create RECs in the REC Registry.
- Wait for your RECs to be validated.
- Find a buyer for your RECs which involves negotiating and agreeing on a price.
- Sell and transfer your RECs in the REC Registry.
There are additional conditions to trading your RECs, including:
- You can only trade your RECs when they are registered.
- Your RECs need to be created in the REC Registry to be traded.
- You can only trade your RECs with registered buyers (which can be a person or a company).
Rebates & assistance
As a home owner, renter or landlord, you could be eligible for financial assistance and home assessments to help you start saving energy and water sooner.
Find out about government rebates and assistance.
Why do it?
- Buying a system eligible for RECs and Solar Credits can help reduce the cost of your new system
Did you know?
Australia's renewable energy target aims to ensure that 20 per cent of our electricity comes from renewable sources like solar, wind and geothermal by 2020.
Page last modified: 02 Mar 2010