The Renewable Energy Target legislation requires wholesalers of electricity to purchase a percentage of the energy the sell from renewable energy sources.

Renewable energy sources can be wind, solar PV or solar hot water.

In 2009, the Federal Government set the percentage target for renewable energy to 20% by 2020.

The mechanism used to measure the percentage of renewable energy an energy wholesaler purchases is structured around them surrendering certificates which can by purchased from solar energy system owners.

Each certificate that is created and sold represents 1 Mega-Watt-hour of electricity

The 2020 target of 20% is set at 45,000 GWh/year or 45 million certificates to be generated in that year and each year after to the year 2030.

The RET is broken up into two sections. One for large scale generators and the other for small scale generators.

Solar PV systems less then 100kW in power are considered small scale and systems larger than 100kW are considered large scale.

 

Small Technology Certificates

When a house or business installs a solar system, the amount of greenhouse gas emission abatement is estimated by an algorithm set by the regulator of the scheme.

The variables in the algorithm are fairly simple. They break up the country into four zones. Each postcode in Australia has been assessed for how much solar energy and is classified to be in one of the four zones.

Zone 1 represents the sunniest parts of Australia and Zone 4 represents the least sunniest part of Australia.

Below is a map of the four Zones.

The equation for calculating the quantity of Small Technology Certificates (STCs) for a 5kW system in Zone 3 is calculated as follows:

#STCs = 5kW (system size) x 15 yrs (deeming period) x 1.382 (Zone 3 Constant) = 103.65

The #STCs is always rounded down so final number is 103 STCs.

Tindo will offer a point of sale discount if the system owner agrees to assign the STCs to Tindo.

 

Large Generation Certificates

Large Generations Certificates (LGCs) are for solar systems greater than 100kW in size.

The method of measuring the quantity is LGCs generated is straightforward as a regular electricity meter is placed on the output of the solar system capturing all of the generation.

Periodically, the energy recorded on the meter is collated to represent LGCs.

 

Buying and Selling STCs and LGCs

The Goverment has set up the REC Registry to administer the buying and selling of STCs and LGCs.

The REC Registry is an internet-based registry system that supports the Commonwealth Government’s Renewable Energy Target (RET) by facilitating the creation, transfer and surrender of certificates.