What Are Renewable Energy Certificates?

Information verified correct on October 28th, 2016

Energy certificates can be sold for cash, or used as rebates against future renewable energy purchases.

Renewable energy certificates are another way to make money from solar. To aid the increase of renewable energy generation the government has put in place a system that allows energy power generators to ‘certify’ their use of power. If you use energy generated through a renewable source, you can claim one certificate for every megawatt hour of energy generated. Your certificates can then be sold for cash, or used as rebates against future renewable energy purchases, to energy companies across Australia.

How do they work?

By 2020 energy companies must prove that they’ve produced 20% of their energy from renewable sources. One way is to buy energy certificates from anyone in Australia who has produced renewable energy. If you produce renewable energy (such as solar power) you can apply to get a renewable energy certificate which you can then sell to an energy company.

How do I apply to get a renewable energy certificate?

There is a little bit of paperwork and red tape required to getting your renewable energy certificates. It’s a lot easier if you can try to go through your solar installer or an energy specialist in your area. It may also be possible for an energy retailer to provide you with an energy certificate when you agree to a feed-in tariff. If neither of these are available to you, then you can do it yourself. Simply visit the Renewable Energy Target section of the Australian Government Clean Energy Regulator site.

The renewable energy target has come under fire for not going far enough, or for allowing companies to essentially pay to pollute, but these fights are usually best had in parliament. For you and millions of other Australians who are simply looking to get the best deal, renewable energy certificates can provide you with another way to get a little something back from your solar and keep a little extra cash in your wallet.

How they work: the complicated, government version

To administer the Renewable Energy Certificate (REC) program, the government has set up the Clean Energy Register (CER). The CER has divided nation energy targets into Large-Scale Renewable Energy Targets (LRET) and Small-Scale Renewable Energy Targets (SRET). To meet these targets companies can buy certificates from large or small providers, either Large-Scale Generation Certificates (LGCs) or Small-Scale Technology Certificates (STCs). Companies must buy a minimum number of these certificates each year to establish that they are meeting energy targets. To meet the 2020 target will require the purchase of 45 million Renewable Energy Certificates.

Background information: Renewable Energy Certificates

In 2001 the Australian Government set a Renewable Energy Target (RET), that by 2020 at least 41,000 GWh of the nation's energy (around 20% of the total national usage) would be generated from renewable sources. This includes  solar, wind, and hydroelectric. After some political wrangling this figure was reduced to 33,000 GWh earlier in 2015.

Shahedul Islam

Shahedul is the publishing assistant for He's Internet savvy and loves to learn new things about finance and technology. He spends most of his time learning about the wonderful world of the internet.

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