Rebates
What are RECs?
After a long period of sustained public pressure the federal Government developed the Renewable Energy Certificates (RECs) program as a way to encourage the growth of environmentally responsible energy technology in Australia.
The scheme allows for RECs to be created based on the amount of C02 pollution the generator will supplant during its effective working life. For the purposes of the RECs program this working life is deemed as having a maximum span of 15 years for each RE generator installed.
The base value of the REC is established by the MRET or Mandatory Renewable Energy Target obligations of C02 producing industries. These industries i.e. Coal Fired Energy generation business must purchase and surrender a minimum number of RECs every year over a set period to comply with Government regulation. The scheme started in 2001 and the target end date is 2020.
Some people call it a pollution tax.
Whilst the minimum value of the RECs is established by MRET compliance the maximum value is set by the costs of the Renewable Energy Shortfall Charge. This is a penalty imposed on MRET obliged business that is not able to surrender the regulated number of RECs.
The REC is a tradeable commodity and as such its value fluctuates.
Once created the RECs can be kept by the owner of the RE generator and saved as one would hold on to shares, until the value increases or they can be traded direct or through a broker to an MRET obligated interest.
Some key points to remember with regards to the RECs program.
RECs can only be created under strictly regulated guidelines, these are;
i. All the RE generator components must comply with Australian Standards and have Clean Energy Council approval. In the case of Photo Voltaic (PV) panels used in solar generators the manufacturer and product model must be listed with a registration number on the CEC website.
ii. The design and Installation of the RE generator must be carried out by or under the supervision of a CEC accredited individual.
iii. The RE generator must be installed by a licensed contracting Electrician or licensed Electrician employed by a contracting Electrical firm. It must comply with current Australian Electrical Standards and State Electrical Standards. It must have an associated Electrical Safety Certificate issued on completion of installation.
iv. The RECs can only be created by a person registered with the Office of the Renewable Energy Regulator (ORER). In the case of a PV system each individual Solar Panel must be identified on the RECS allocation form with its serial number.
It is important to remember that the current RECs / MRET program has a finite life; the REC’s will probably have no value at the end of the program.
