Renewable Energy Certificates (RECs) are an electronic form of currency. You get 1 REC for each 1 MWh (mega watt hour) of electricity that can be generated or fossil fuelled electricity displaced by a small scale energy system you install
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 (photovoltaic) power system
- a wind power (turbine) system
- a hydro (water) power system
- a solar hot water system
- a heat pump hot water system
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 Mandatory 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.
http://www.livinggreener.gov.au
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