Renewable Energy Certificates (RECs)
The Federal Government wants all Australians to look for ways to support renewable energy. One way to do that is by the creation of the Renewable Energy Certificate scheme. This benefit is passed on to you the customer when a Solar Hot Water System is puchased and installed. The amount you receive depends upon the certification, where you live and the size of the system purchased. Contact Chromagen today to find out what you are eligible for!
All about the Australian Government’s Renewable Energy Certificates Solar Rebate Program 1. What are Renewable Energy Certificates?
A Renewable Energy Certificate (RECs) represents 1 MWh (mega watt hour) of renewable electricity generated by a power station or 1 MWh of electricity displaced by a solar water heater. RECs are electronic certificates that reside on a publicly available Internet database (www.rec-registry.com). One MWh is 1,000 kilo watt hours.. 2. Where do RECs come from?
The Australian Government has set targets for the production of extra renewable electricity. Electricity retailers and other purchasers of wholesale electricity (called liable parties) are required to contribute towards annual renewable energy targets. The more electricity a company purchases, the bigger their contribution to purchasing renewable energy has to be.
Each year these liable parties must surrender Renewable Energy Certificates to the government to demonstrate their commitment towards the target. If they fail to surrender RECs they are required to pay a penalty of $40 for each REC they are short of their target. 3. How can I benefit from Renewable Energy Certificates?
The Government's requirement that large electricity purchasers demonstrate that they are buying more of their electricity from renewable energy provides a market for RECs from renewable energy generators and owners of solar water heaters. Liable parties may be interested in buying RECs created from your solar water heater installation. The value of RECs is determined by the demand and supply for certificates and may vary from buyer to buyer and from day to day. 4. Is this a government rebate program?
No. The Government will check your eligibility to create RECs and will allow you to transfer them to others if you have sold them. However, the Australian Government will not buy RECs from you and will not provide any payment with respect to your solar water heater installation. 5. How long do I have to create my RECs?
Certificates must be created within 12 months of the solar water heater installation date. Certificates may only be created on the Internet based REC Registry (http://www.rec-registry.com/) which involves a two step process of entering system details into the registry and proceeding to create the RECs once viewing entered information for accuracy. 6. I have an old electric-boosted solar water heater that has not operated with solar contribution for over a year. I want to replace my old unit with a new solar water heater. Should I calculate the number of RECs that I would be eligible for based on replacing an old electric-boosted solar water heater or a conventional electric water heater?
You should treat it as replacing an electric-boosted solar water heater. The ORER recognises that due to various reasons, such as the loss of anti-freeze fluid used in indirect systems (drain-down), a solar water heating system may lose its capacity to heat water using solar contribution. While the damaged system may continue to deliver hot water using energy from an electric boosting element, it was installed as a solar water heater and is regarded as a solar water heater for the purposes of the measure. Thus a replacement installation of a new eligible solar water heater would be eligible for RECs on the basis of replacing a solar water heater not replacing an electric hot water system. 7. If I replace a gas water heater/oil water heater/wood fired water heater am I eligible for RECs?
No. Only installations of solar water heaters replacing electric water heaters, or electric boosted solar water heaters, are eligible for renewable energy certificates. This is because the mandatory renewable energy scheme is targeted at reducing greenhouse emissions from the use of electricity. 8. What if I did not replace any type of water heater because there has never been a water heater installed previously?
You may be eligible to claim RECs if you have installed an eligible solar water heater listed in the regulations. 9. Am I eligible for renewable energy certificates for my new solar water heater or heat pump water heater?Determining Renewable Energy Certificate (REC) eligibility for solar water heater and heat pump water heater installations¹
From the Office of the Renewable Energy Regulator, March 2006
The Renewable Energy (Electricity) Act 2000 (the Act) and the Renewable Energy (Electricity) Regulations 2001 (the Regulations) allow owners of eligible solar water heaters (SWHs) and heat pump water heaters (heat pumps) to create and sell renewable energy certificates (RECs) or assign their right to create RECs to an agent.
The Act requires liable parties, such as electricity retailers, to purchase and surrender a number of RECs each year to the Office of the Renewable Energy Regulator (ORER) based on a percentage of their electricity consumption.
For SWHs and heat pumps, one REC can be created for each Mega Watt hour (MWh) of electricity displaced by the installation of the new system. The ability for owners to be eligible for RECs provides a financial incentive to install SWHs and heat pumps rather than electrical or gas water heating. Owners can create RECs themselves through the internet based registry system, known as the REC-registry (http://www.rec-registry.com/) or owners find it more convenient to assign their right to create RECs to a agent in return for a financial benefit such as a discount on the purchase price of the system. A list of registered agents can be found on the ORER web site (http://www.orer.gov.au/index.html).
¹ Note: The information provided in this document may be subject to change with amendments to the Renewable Energy (Electricity) Act 2000, the Renewable Energy (Electricity) Regulations 2001, and the administrative processes adopted by the Office of the Renewable Energy Regulator.
Download this Fact Sheet from the ORER 10. How many RECs am I eligible for?
Typically a solar water heater will be eligible for between 10 and 64 RECs, depending on the location and system type. Certificates for solar water heaters can only be claimed once for each installation (equivalent to ten years' displacement of electricity).
To establish how many renewable energy certificates you may be eligible to create for your solar water heater you should check your eligibility by answering the eligibility questions above and refer to the tables in the regulations. 11. When will I get paid for my RECs?
Before receiving any payment for your RECs you must either create them yourself and sell them to another party or assign your rights to create RECs to an Agent. The time taken for you to receive payment is dependent on your arrangements with the buyer. Price and payment date should be the key considerations when negotiating to sell your RECs or your rights to create RECs. If you experience a delay in receiving payment for your RECs please contact the person you have agreed to sell them to directly. The Office of the Renewable Energy Regulator has no powers in the commercial arrangements between buyers and sellers of RECs. Chromagen can ensure fast payment turnaround on your RECs! 12. How do I sell my RECs?
Chromagen is a registered REC agent with ORER and will purchase your REC's at a competitve price.
It is so simple,
- Contact us and will be send you a Chromagen Renewable Energy Certificate (REC) Assignment Form,
- Complete the REC form and send it back to us
- agents for deemed units, who have set up a business in creating RECs from Solar Water Heaters; or
- traders of RECs.
When selling your RECs you should agree on a price and a settlement date. The ORER does not monitor the price of RECs nor does it get involved in disputes between buyers and sellers. Payment for RECs is a contractual matter between the buyer and seller. 13 Do I have to create the RECs myself?
No. Owners of solar water heaters may elect to assign the right to create the RECs to another party, called an 'agent'. In this case, the agent will buy the RECs off you and they will be responsible for creating the RECs. You will have to sign a document stating that you allow another party to create the RECs. You will not be able to create the RECs yourself after you have done this, so you should ensure that you are happy with any benefit (for example, the purchase price of the RECs) which has been offered to you in return for the rights to your RECs. 14 How do I sell my right to create RECs to an agent?
Many owners of solar water heaters find the process of selling their right to create RECs to an Agent much easier than creating and selling registered RECs themselves. This way they avoid having to apply to ORER to assess their eligibility, (paying $20), getting a user name and password in the registry, creating RECs, finding someone to sell RECs to and eventually transferring the RECs.Owners of eligible solar water heaters should contact a range of agents to get the best price and payment arrangements.
Related Links
http://www.orer.gov.au/publications/certificates.html/
http://www.recs.org/ | 
