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The solar PV subsidy will decline, starting 1 January 2017

The number of Renewable Energy Certificates (REC) that accompany a solar power system is based on the installation location and the amount of electricity in megawatt hours (MWh) that the system will generate over what is known as a deeming period (15 years) or 2030 – whichever comes first.
One REC is equivalent to one megawatt-hour of electricity production over the period.

As the Renewable Energy Target tracks toward 2030, the deeming period for solar photovoltaic (PV) systems under the Small-scale Renewable Energy Scheme will decline.

As mentioned, the deeming period for RECs is 15 years or 2030; whichever occurs first.
Therefore, from 2017 onward, the deeming period will reduce by 1 year for every year closer to 2030.
In 2017, the deeming period will be reduced to 14 years. In 2018, it will reduce again to 13 – and so on.

Renewable Energy Certificates (REC) created under the Small-scale Renewable Energy Scheme (SRES) are called Small-scale Technology certificates (STC)

The number of eligible STCs created for a solar power system can be found with the following calculation:

Zone Rate x System Size x Deeming Period = Number of STCs

For example, a 5kW solar power system installed in Wagga Wagga (Zone 3) is currently entitled to 103 certificates when installed in 2016.

1.382 x 5 x 15 = 103

This would equate to a subsidy of $3914 (103 STCs x Current Value $38 = $3914) for a system installed in 2016.

If installed in 2017 the number of STCs would be reduced to 96 (1.382 x 5 x 14 = 96)

The value of the eligible subsidy will reduce by approximately 7% annually from 2017 onward.

Renewable Energy Target (RET)

Australia's Renewable Energy Target (RET) is a Federal Government policy designed to ensure that at least 33,000 Gigawatt-hour (GWh) of Australia's electricity comes from renewable sources by 2020.

About the Renewable Energy Target
The RET consists of two main schemes:
  • the Large-scale Renewable Energy Target (LRET), which creates a financial incentive for more and larger renewable energy power stations
  • the Small-scale Renewable Energy Scheme (SRES), which encourages owners to install small-scale renewable energy systems such as rooftop solar, solar water heaters, heat pumps, and small-scale wind and hydro systems.

Renewable Energy Certificates (REC)

A Renewable Energy Certificate (REC) is a measurement of renewable energy that can be traded or sold.
Australia's Renewable Energy Target (RET), requires energy retailers to purchase a set quantity of certificates each year, so there is a constant demand for these certificates.

You can be eligible to create certificates under either:
  • the Small-scale Renewable Energy Scheme (SRES), for systems under 100 kW. This is the scheme that applies to residential solar PV systems.
  • the Large-scale Renewable Energy Target (LRET), for systems above 100 kW.

Small-scale Renewable Energy Scheme (SRES)

The Small-scale Renewable Energy Scheme creates a financial incentive for individuals and small businesses to install eligible small-scale renewable energy systems such as solar panel systems, small-scale wind systems, small-scale hydro systems, solar water heaters and air source heat pumps.
It does this through the creation of small-scale technology certificates which Renewable Energy Target liable entities have a legal obligation to buy and surrender to the Clean Energy Regulator on a quarterly basis.

Small-scale Technology Certificates (STC)

STCs are provided under the SRES, and help reduce the upfront cost of installing your solar PV system.
STCs are an electronic form of currency and are allocated to you when you install a solar PV system.
One STC is equivalent to one megawatt-hour of electricity generated by your solar PV system.
The price of STCs changes according to market conditions. The total level of subsidy you receive will depend on a number of factors, including the location and size of the solar PV system and the value of STCs at the time the system was installed.

Small-scale technology certificates can be created following the installation of an eligible system, and are calculated by the amount of electricity a system produces or displaces.

System eligibility

Under the Small-scale Renewable Energy Scheme, eligible small-scale renewable energy systems may be entitled to small-scale technology certificates, which can be sold to recoup a portion of the cost of purchasing and installing the system.

Small-scale renewable systems which may be eligible for certificates include:
  • solar photovoltaic (PV) panels
  • wind turbines
  • hydro systems
  • solar water heaters
  • and air source heat pumps.
Small-scale systems eligible for certificates

Creating small-scale technology certificates

What size subsidy will I receive?

Australia is divided up into zones based on how much renewable energy can be generated by solar PV in a given area.
A system installed in Melbourne or Hobart (zone 4) receives fewer STCs than the same sized system installed in Sydney (zone 3) or Darwin (zone 2). This is because Melbourne and Hobart receive less sunshine, so less solar energy is produced by the system.

Wagga Wagga and surrounding areas generally come under Zone 3.

You can use the REC Registry calculatorto determine your approximate level of subsidy.

There are two ways you can be paid for your STCs:

  • Assign your STCs to a registered agent in exchange for a financial benefit when you purchase your solar PV system. This benefit may be in the form of a delayed cash payment or an upfront discount on your solar PV system (most consumers take this option).
  • Create the STCs yourself by finding a buyer and then selling and transferring them in the Renewable Energy Certificate (REC) Registry.

For more information, contact the Clean Energy Regulator.

Contact Us

Unit 3/23 Nagle St
Wagga Wagga, NSW 2650
Office Number - 0269 710 084
Alex Manley, Commercial Inquiries - 0419 017 775
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