Electrical systems that generate electricity from renewable sources may be eligible to participate in either the Small-scale Renewable Energy Scheme or the Large-Scale Renewable Energy Target. These schemes create a financial incentive for the build and installation of renewable power stations and systems — participants in these schemes can create renewable energy certificates, which are bought by electricity retailers to meet their renewable energy obligations. Each scheme has its own eligibility and compliance requirements — it is important that potential participants understand these requirements to make an informed decision of which scheme best suits their system specifications, individual circumstances and professional competencies. A system can only receive benefits under one scheme.

Small-scale Renewable Energy Scheme vs Large-scale Renewable Energy Target

The Renewable Energy Target is intended to provide opportunities for renewable energy systems across a range of technologies and scales, and to allow flexibility for new and innovative business models. Two elements of the Renewable Energy Target (the Large-Scale Renewable Energy Target and Small-scale Renewable Energy Scheme) are designed to support the renewable energy industry in combination, with each scheme providing incentives to different sectors.

In particular, solar photovoltaic (PV) systems in the Small-scale Renewable Energy Scheme are intended for:

• homeowners (generating power up to 100 kW), and
• businesses generating up to 100 kW capacity for solar PV from a small renewable energy system, who are primarily seeking to consume the power generated by their premises.

The Small-scale Renewable Energy Scheme is not designed for large projects that have a primary purpose to export or sell the power.

While solar PV systems are the most common form of systems being installed in the Small-scale Renewable Energy Scheme, the above intent also applies to wind (rating of no more than 10 kW, rather than 100 kW) and hydro systems (rating of no more than 6.4 kW). Systems larger than this are intended to be covered by the Large-Scale Renewable Energy Target.

The Small-scale Renewable Energy Scheme also provides support for solar water heater and air-sourced heat pump renewable energy systems. The Large-Scale Renewable Energy Target does not support these technologies. The intent of the Small-scale Renewable Energy Scheme for these technologies is similar to the above electricity-based technologies. The scheme is designed for homeowners and businesses seeking to reduce their energy needs by using renewable energy systems. It is not intended for industrial-scale systems or for the export of energy.

The Small-scale Renewable Energy Scheme has a number of distinctive features designed to assist homeowners and business, including a simple application process and certificates provided upfront based on an estimate of future generation.

By contrast, the Large-scale Renewable Energy Target encourages investment in large projects seeking to export or sell power. Large projects are more complex and subject to a rigorous technical assessment and application process. Accredited power stations must have their generation measured in order to receive certificates. Large-scale generation certificates are issued for generation that has occurred. A higher degree of evidence of renewable generation is required due to the quantity of the certificates being claimed.

It should be noted that the Small-scale Renewable Energy Scheme does not have provisions to gain pre-approval of renewable energy systems and eligibility is only determined once a complete application has been received. The Large-Scale Renewable Energy Target allows for the provisional accreditation of power stations.

What are some the key differences between the Small-scale Renewable Energy Scheme and the Large-scale Renewable Energy Target?

Eligibility to participate in schemes based on system capacity

The following table details system capacity limits for common technologies in both the Small-scale Renewable Energy Scheme and Large-scale Renewable Energy Target.