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How does the Renewable Energy Target drive investment in renewable energy?
The Renewable Energy Target works by providing financial incentives to households and businesses to invest in, and generate, renewable energy. Financial incentives are offered in the form of tradable certificates which are calculated by the quantity of renewable energy which is generated. For example: one certificate for one MWh of electricity.
The Renewable Energy Target also requires
liable entities (usually electricity retailers) to purchase and surrender a certain number of tradable certificates to the Clean Energy Regulator each year. The number of certificates they are required to surrender represents the amount of electricity they sell to their customers which has been generated from renewable sources.
This process facilitates the creation of a market which determines the price of certificates.
The Clean Energy Regulator plays an important role in ensuring supply and demand of certificates. We ensure certificates are both correctly created (supply) and that liable entities surrender the correct number (demand).
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But who pays for these 'financial incentives'? The taxpayer?
No. The cost of liable electricity retailers purchasing and surrendering certificates is passed on in electricity bills through tariffs.
According to the
Renewable Energy Target Review Call for Submissions Paper, the cost of purchasing certificates in 2013-14 will make up approximately 4 per cent of electricity bills. This would typically equate to $60 per year, or just over $1 per week for someone with a $1500 per year electricity bill.
However, the Renewable Energy Target Review is also examining whether or not incentivising extra renewable power generation may have any effect on both wholesale and peak energy prices. For example, small scale solar PV is often generating maximum power on hot sunny days when electricity demand is high from use of air conditioners.
For more information about how energy tariffs are calculated, and pricing trends for electricity, see the
Australian Electricity Market Commission website.
The Australian Government
reviewed the Renewable Energy Target.
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When will I receive my payment for my certificates sold through the STC clearing house?
Small-scale technology certificates are sold from the
transfer list on a first listed, first served basis.
If a buyer elects to purchase from the STC clearing house, small-scale technology certificates are sold for a fixed price of $40 (excl. GST).
When your certificates are purchased, you will be notified via email with payment forwarded to your nominated bank account within 3 business days of sale. It's important to ensure your bank details are current to ensure you receive your payment.
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How do I determine the deemed life of my system?
Small-scale technology certificates are calculated based on the life of the system. This differs for solar hot water heaters and small generation units (solar panels, wind and hydro). The following tables define the deemed life of the system life for each system type, based on the installation date.
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For eligible small generation units – solar panels
Small-scale technology certificates may be created for small-scale solar panel systems over one or five years, or a single maximum
deeming period. Most people claim the highest period possible to claim the maximum number of certificates for that system upfront.
| Installation date | The deemed life of the system
(The specified maximum number of that certificates can be created) |
|---|
| Up to and including 31 December 2016 | 15 years |
| From 1 January 2017 | 14 years |
| From 1 January 2018 | 13 years |
| From 1 January 2019 | 12 years |
| From 1 January 2020 | 11 years |
| From 1 January 2021 | 10 years |
| From 1 January 2022 | 9 years |
| From 1 January 2023 | 8 years |
| From 1 January 2024 | 7 years |
| From 1 January 2025 | 6 years |
| From 1 January 2026 | 5 years |
| From 1 January 2027 | 4 years |
| From 1 January 2028 | 3 years |
| From 1 January 2029 | 2 years |
| From 1 January 2030 | 1 year |
| After 31 December 2030 | Nil |
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For eligible solar hot water and air source heat pumps
Unlike small generation units, small-scale technology certificates can only be created once for a solar water heater or an air source heat pump based on the life of the system, which is currently calculated at 10 years.
| Installation date | The deemed life of the system
(The specified maximum number of that certificates can be created) |
|---|
| Up to and including 31 December 2021 | 10 years |
| From 1 January 2022 | 9 years |
| From 1 January 2023 | 8 years |
| From 1 January 2024 | 7 years |
| From 1 January 2025 | 6 years |
| From 1 January 2026 | 5 years |
| From 1 January 2027 | 4 years |
| From 1 January 2028 | 3 years |
| From 1 January 2029 | 2 years |
| From 1 January 2030 | 1 year |
| After 31 December 2030 | Nil |
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For eligible small generation units – small-scale hydro and wind systems
Small-scale technology certificates may be created for small-scale wind or hydro systems annually or in batches of five years on installation. Most people claim the highest period possible (currently five years) to claim the maximum number of certificates for the system upfront.
| Installation date | The deemed life of the system
(The specified maximum number of that certificates can be created) |
|---|
| Up to and including 31 December 2026 | 5 years |
| From 1 January 2027 | 4 years |
| From 1 January 2028 | 3 years |
| From 1 January 2029 | 2 years |
| From 1 January 2030 | 1 year |
| After 31 D;ecember 2030 | Nil |
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I haven't been paid for my small-scale technology certificates
The Clean Energy Regulator does not set the price of small-scale technology certificates and is unable to mediate where:
- owners have not been paid for small-scale technology certificates that have been assigned to an installer or other person with a REC Registry account;
- sellers have not been paid for small-scale technology certificates sold to an individual, business, or agency.
Such issues should be referred to the Department of Fair Trading in your state or territory, if you are unable to resolve the problem with your supplier.
However, if you believe that
small-scale technology certificates have been improperly created against your solar water heater or small-scale solar panel, wind, or hydro installation (for example, the installation is not yet completed), you can report this to the Clean Energy Regulator. Please see the
Reporting Fraud page for more information.
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Can I take my solar rooftop panels with me if I move?
You can, but the removal and re-installation must be performed by a qualified electrician or builder who is certified to perform such a removal, and your power supplier may have requirements about disconnection and re-connection to the electricity supply with which you must comply.
Note that small-scale technology certificates are assigned against a property address, not property owner. Removing panels from a property means subsequent installations at that property cannot claim solar credits against any new installation, although they can claim 1:1 STCs. The new property at which you may wish to re-install your panels will not be eligible to claim small-scale technology certificates.
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Can I claim small-scale technology certificates on a retrofitted water heater?
No. Eligible water heaters must be listed in the
Register of Solar Water Heaters. In order to be listed on the register, the water heater must be a solar or air-source heat pump at the time of listing.
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What's the current price of a small-scale technology certificate?
The financial benefit supplied to you by an agent, or the total price given to you by a certificate broker or trader, can vary from day to day. This is because
small-scale technology certificates (STCs) are traded in the STC market (like the stock market) and so prices vary depending on supply and demand.
To determine the approximate STC market value, it is recommended you search 'STC traders' or 'REC traders' on the Internet as the market price fluctuates daily, based on supply and demand.
The only time the small-scale technology certificate price is fixed is if it is to be traded through the Clean Energy Regulator managed
STC Clearing House. Prices of small-scale technology certificates are fixed at $40 (excluding GST), regardless of what the STC market is doing.
Outside of the STC clearing house, the Clean Energy Regulator does not set the price of small-scale technology certificates nor does it get involved in disputes between buyers and sellers.
Payment for small-scale technology certificates or the rights to create small-scale technology certificates is a contractual matter between the buyer and seller, unless the small-scale technology certificate has been sold within the STC clearing house.
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