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Market integrity

Our role administering the Renewable Energy Target includes ensuring the integrity of supply of renewable energy certificates and that obligations are being met to surrender them. More information about our integrity measures is available on our website.

Compliance priorities

We published our compliance priorities for all schemes we administer for the first time in 2017.

For the Renewable Energy Target, we focused on:

  • Small-scale Renewable Energy Scheme—enhanced monitoring of integrity of claims for small-scale technology certificates, and
  • Large-scale Renewable Energy Target—annual acquittal of large-scale generation certificate liability and increased scrutiny of data provided.

We implemented several new initiatives to meet these priorities, including the examples Spotlight... Data sharing to enhance compliance and Spotlight... Improving client experience and data quality.

Small-scale Renewable Energy Scheme compliance

In 2017 we further enhanced our monitoring of claims for small-scale technology certificates. We take fraud and non-compliance seriously, and take necessary action to ensure the integrity of the scheme.

Scheme participants who are involved in the improper creation of small-scale technology certificates are subject to enforcement action. We have a broad range of enforcement options that include suspending REC Registry accounts, accepting enforceable undertakings17, and pursuing civil and criminal penalties.

In 2017 we accepted four enforceable undertakings, executed five warrants, suspended five REC Registry accounts and issued 15 notices to produce information for suspected contraventions of the Renewable Energy (Electricity) Act 2000. These matters involve the installation of unapproved solar panels, the misuse of installer details, the provision of false and misleading information, and systems not meeting state and territory electrical safety requirements (in line with the eligibility requirements in the Small-scale Renewable Energy Scheme).

This year we published these actions on our website and in media releases to inform the broader industry about our compliance priorities and action. We also participated in industry events to engage agents, installers, manufacturers and other stakeholders.

Our role relates to the integrity of certificate claims under the scheme. This has collateral benefits for consumers in relation to component quality and installer accreditation, however we do not have explicit consumer protection powers. Where we can, we also work to seek remediation for the customer in dealing with non-compliance in the scheme. For example, the four enforceable undertakings entered into in 2017 required that systems identified in the EU are inspected by an accredited Clean Energy Council (CEC) installer and if required, rectified to required standards. All costs under the enforceable undertakings are met by the undertaking party at no cost to the consumer. In addition to these current undertakings, one enforceable undertaking was completed in 2017 that had similar requirements to inspect and rectify systems. Further information about our enforceable undertakings can be found on our website.

We work in close partnership with state and territory fair trading bodies, and other agencies that have consumer protection regulatory responsibilities. This includes joint operations, sharing of relevant information, intelligence gathering, and referring matters for law enforcement.

We have also increased our monitoring of registered agents’ competency and capability to participate in our scheme. We are working with registered agents to co-design an online program of tools and resources that aims to support and improve agent due diligence and compliance practices. This program will be rolled out in 2018.

Spotlight…Data sharing to enhance compliance

In May 2017, we signed a Memorandum of Understanding with the Australian Energy Market Operator (AEMO) to automate data exchange on energy use and installation of small-scale systems.

This enables us to determine whether or not a solar panel system was installed on the date claimed with a high degree of certainty by using data analysis algorithms that examine the property’s net energy use following that date. If these results are uncertain it triggers further manual checks involving phone calls, maps and requesting paperwork from the applicant as needed. This approach provides a more refined risk assessment tool, which enables our staff to focus on higher risk applications.

This data exchange and matching addresses the issue of non-installed systems being claimed through sophisticated fraud, preventing ineligible claims for small-scale technology certificates. It also provides additional and efficient assurances about claims more generally, complementing our existing compliance checks.

Industry has welcomed the initiative, which supports broader integrity of the renewable energy industry.

Having established the infrastructure, we are now looking to extend the AEMO data exchange to the Large-scale Renewable Energy Target.

This will enable us to cross check generation and accreditation data provided by large-scale renewable energy power stations against third-party action meter data.As well as improving compliance, this will reduce the regulatory burden on power station clients.

These data matching mechanisms do not rely on additional data from our clients. Rather, the data matching program is about smarter use of the data already availableto government to improve compliance.

Inspections program

We inspect a statistically significant sample of solar panel systems to check conformance with the relevant Australian standards, including relevant state and territory electrical safety standards, and requirements under the Small-scale Renewable Energy Scheme.

Of the 4140 inspections conducted in 2017, 79 were found to be unsafe. This is an unsafe rate of 1.9 per cent, down from 2.5 per cent in 2016. Typically the main issues found related to water ingress into electrical components. This is an eight per cent decrease in the number of unsafe systems in 2016, continuing a downward trend in the numbers of unsafe systems found during the annual inspection program.

If an inspector finds an unsafe system, they are required to render it safe for the consumer – typically by turning it off. They then notify all interested parties of the extent and nature of the safety risk, including the relevant state and territory electrical safety regulator. We have no direct powers to deal with electrical safety matters.

Our role is to ensure the integrity of the Small-scale Renewable Energy Scheme by providing the results of inspections to all state and territory electrical safety regulators as well as the Clean Energy Council, which manages accreditation of solar panel installers and approves the key components used. The reduction in unsafe systems in recent years reflects the collaboration of industry, state and territory electrical safety regulators using the trends seen in our inspection program to continuously improve installation quality.

Our data has been used to inform electrical safety regulators and peak industry bodies to update Australian Standards and installation guidelines.

For inspections by state see Appendix D.

Spotlight…New app checks if solar panels are genuine

A voluntary pilot program involving industry partners is developing tools that will allow participants in the Small-scale Renewable Energy Scheme to quickly and easily check if solar panels are genuine before they are installed.

The Solar Panel Validation project stands to benefit everyone involved, from the manufacturers who will be able to protect their brand, through to the householders who can now be assured their panels are genuine products that meet Australian standards and come with a warranty.

In 2017 we identified three partners through an expression of interest process: FormBay, SolarScope and Bridge Select. They have invested their own funds to develop apps to collect solar panel serial number information and build validation databases synced with the apps.

The pilot is a key element of our 2017 compliance priorities. Use of the validation tools creates a signed data package that contains all of the required information about an installation as well as a validation check on the panels.

These signed data packages can be automatically uploaded to the REC Registry as part of the process of registering the solar panel system.

Certificates created using validated solar panel data will deliver a higher level of confidence to the Small-scale Renewable Energy Scheme. Certificates created without validated data will be examined more closely under our compliance program.

Industry response to the concept has been very positive with major manufacturers including Jinko Solar, Canadian Solar, Yingli Solar, Hanwha Q CELLS, LG Electronics and ReneSola signing agreements to provide serial number data for their panels to be validated.

As the tools are tested and come online, more manufacturers, installers and agents will be invited to participate in the pilot. Following evaluation in 2018, the validation tools will be made available for broader industry participation.

Photo: Solar panels, Australian Capital Territory

Spotlight…Improving client experience and data quality

We are streamlining the way we capture data for the Large-scale Renewable Energy Target, to improve efficiency and data quality.

We run the REC Registry as the framework for transferring and banking renewable energy certificates.

Our staff also use the REC Registry to enter and process client data for the Large-scale Renewable Energy Target. However, Small-scale Renewable Energy Scheme clients enter their own data, with mainly automated processing and approval of certificates.

In the lead up to meeting the 2020 Renewable Energy Target we anticipate a significant increase in applications for accrediting large-scale renewable energy power stations and creating large-scale generation certificates.

We are leveraging lessons learned through the Small-scale Renewable Energy Scheme to reduce manual data entry and automatically upload and validate independent third-party data that can be used for cross checking (see Spotlight... Data sharing to enhance compliance).

We are enhancing the REC Registry to include a new self-service capability, enabling Large-scale Renewable Energy Target clients to enter their own electricity generation data to fast track creation of their large-scale generation certificates. We will consolidate multiple client log-ins and current limited reuse of data to a single entry point so clients can ‘tell us once’.

By automating existing manual processes we will also free up resources to handle the larger number of applications in the schemes and to focus compliance activities on higher risk areas.

A risk-based assessment of power stations will help identify high risk applications for accreditation and claims for large-scale generation certificates, to support automated validation of certificates.

As well as improving efficiency and data quality, these enhancements will enable much faster access to data reports.

Photo: Royalla Solar Farm, DIF/FRV, Australian Capital Territory

Footnotes

  1. See Glossary for definition

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