So what Are RECs?
RECs are an electronic form of currency which are created for each megawatt-hour (MWhr) of renewable electricity generated or deemed to have been generated from your system for a given period of time (for solar PV its 5 or 15 years). The number of RECs created for your system will depend on its size and location. For example a 1KW system in either Perth or Adelaide will receive 20 RECs deemed for a 15 year period.
Where do RECs come from?
The Commonwealth Government, as a part of its commitment to assisting the switch to renewable energies in Australia (a nice 108 page read: Renewable Energy Target Act 2000) has set a target for 20% of all stationary power to come from renewable energies by 2020. Electricity retailers and purchasers of wholesale electricity (mostly large mining companies & processing plants), are required to submit proof that 20% of their power consumption came from renewable energies. The proof is in the RECs (measured in MWhrs). For instance if an electricity retailer or utility has a wind farm that generates so many MWhrs they can register these and submit them to the government as proof of their contribution to renewable energy each year.
This is where you come in...
What they can also do is purchase your RECs from your newly installed solar power or solar hot water system and add them to their own to meet their quota.
How much money will I receive from RECs?
This depends on the number of RECs your system generates and the market value of the RECs at the time of sale. For example under the current scheme a 1KW system in either Perth or Adelaide will receive 20 REC's over a 15 year period. If sold at the current market value you would receive $46* for each REC which would equal $920 in total. When the Solar Credits Scheme arrives in July you will receive 5 times the RECs. So for a 1KW system in either WA or SA you will now receive 100 RECs. If sold at the current market value you would receive $46* for every REC which would equal $4600 in total.
What affects the current market value?
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. The price fluctuates as organisations attempt to work out how much energy they will provide for the year and hence how many RECS they will have to submit, as well as how many RECS are being generated and registered for trade.
How do I claim my RECs?
As a small PV system will only generate a few RECs per year, when you install your solar power system you are allowed to forward claim your RECs for a period of 15 years. By selling your RECs at the time of installation you can receive a further discount off your solar electricity system. Here at Australsun we'll assist you to fill out all the necessary paperwork so you get your payment swiftly and easily.
*Price based on current market value for RECs as at 06/03/09. REC price subject to change.