Renewable Energy Credits - RECs

Renewable Energy Credits - RECs for short. In 2001 the government initiated  the Renewable Energy Target which requires energy providers to source a portion of their energy from renewable sources (aiming at 20% by 2020). Energy providers can either invest in their own renewable energy or purchase the renewable energy benefits created by homes, schools or businesses that have invested in renewable energy, such as;

Solar Panels,
  Wind Farms
  Solar Hot Water Systems or
  Heat Pumps

RECs do not have a fixed value, they are traded like shares on the stock market and so vary in price depending on supply and demand. Currently each REC is traded for about $37.

How To Calculate - Renewable Energy Credits RECs
The number of RECs you are entitled to from investing in renewable energies is dependent on

Zone - where you live as this effects the amount of daylight hours available to produce energy
Output - of your system measured in kW (kilo Watts) provided by the manufacturer
Years - RECs can be traded for 1, 5 or 15 year blocks ( up to a maximum of 15 years )


The formula for calculating your total RECs for the life of your sytsem is:
Zone  X  System Output  X  Years (max 15 years)  =  Number of RECs


Zones - Renewable Energy Credits
A solar system installed in say Tasmania will obviously produce much less renewable energy then say the same system installed in North Queensland because of the strength and number daylight hours. 

So as a way to standise RECs across different weather and sunlight condition,  Australia has been broken up into 4 zones.


Example of RECs created for 1.5kw over 15 years would be as follow:

Trading Renewable Energy Credits - RECs
Whilst it is possible for people to trade their own RECs but for the small amount of money involved and the time to register and complete REcs trading paperwork it is probably not worth the effort. In most cases the company that installed your system will get you to assign the RECs to them.

In fact most companies will assume you will assign your RECs to them to trade so will generally quote the system the value of the RECs already deducted.

Solar Credit Scheme
For an investment in solar of around $10,000 a deduction of about $1500 is a relatively small saving, so the Federal Government introduced the Solar Credit Scheme to increase the uptake in solar energy. It basically increases the number of RECs you are entitled to by a factor of 5 on the first 1.5kw. So if you are entitled to say 31 RECs for your system you will now be entitled to receive 31 X 5 = 155 RECs.

Learn more about Solar Credit Scheme