The Renewable Energy Target (RET) scheme has been established to encourage additional generation of electricity from renewable energy sources to meet the Government’s commitment to achieving a 20% share of renewables in Australia’s electricity supply by 2020. The RET legislation:
Places a legal liability on wholesale purchases of electricity (liable parties) to proprtionally contribute to an additional 45,000 gigawatt hours (GWh) of renewable energy per year by 2020.
It sets the framework for both the supply and demand of renewable energy certificates (RECs) via a REC market.
Who is eligible?
Renewable energy power stations, solar water heaters, heat pump water heaters and small generation units such as small-scale photovoltaic panels may be entitled to RECs if they fulfil accreditation and system eligibility requirements. For more information regarding eligibility requirements see the Australian Government Office of the Renwable Energy Regulators - Small Generation Unit Owners Guide.
RECs are sold and transferred via a market based online system called the REC Registry to liable and other parties in exchange for a financial benefit. This provides significant incentive for growth in renewables across Australia.
What is a REC?
A renewable energy certificate (REC) is a commodity in the REC market. RECs are created by eligible parties (renewable energy power stations, solar water heaters, small generation units) and sold to liable parties (wholesale purchasers of electricity) and other parties via the REC Registry to meet their liability under the RET.
Calculating RECs
The number of RECs a solar water heater or solar photovoltaic panel (small generation unit) is entitled to is calculated by determining the amount of electricity the solar water heater displaces or the amount of electricity a solar photovoltaic system produces over a determined period (called a deeming period) given that the installation and ongoing use of the system will reduce demand on the electricity grid. Systems are usually deemed for the maximum period of 15 years for solar photovoltaic panels and 10 years for solar water heaters to receive the maximum amount of RECs upfront.
If you would like to determine the number of RECs your system could receive under the RET the REC Registry contains a Small Generation Unit REC Calculator.
