Renewable Energy Scheme

What is Renewable Energy Scheme?

On 1 January 2011 the Renewable Energy Certificate (REC) market underwent a major change. The Renewable Energy Target (RET) was split into:

Large-Scale Renewable Energy Target (LRET); and
Small-Scale Renewable Energy Scheme (SRES).

LRET covers large-scale renewable energy projects like wind farms, commercial solar and geothermal. LRET includes legislated annual targets and will operate much the same as the current RET, but is separate to SRES. Power and Water has established a program to bulk purchase large generation certificate.

SRES was created as a financial incentive for owners to install eligible small-scale installations such as solar water heaters; air sourced heat pumps and small generation units (small-scale solar panel, wind and hydro systems).

Eligible systems are entitled to a certain number of Small-scale Technology Certificates (STCs) based on the amount of renewable electricity the system produces or displaces. These STCs can be created and sold to buyers. To sell your STCs to Power and Water simply complete the:

What are Small-scale Technology Certificates (STCs)?

An STC is a type of renewable energy certificate for small-scale renewable energy unit.

An STC is obtained for every 1 megawatt-hour (1000 kilowatt-hours) of electricity produced by small generation units unless the Solar Credits multiplier applies.

Solar Credits is a mechanism which increases the number of STCs able to be created for eligible small-scale generation units through the use of a multiplier. Solar Credits apply to the first 1.5kW of all small-scale generation units, including solar, wind, and hydro installations.

For more information on solar credits go to www.orer.gov.au/sgu/solarcredits.html.

What does this mean?

Using a solar hot water or a photovoltaic (PV) system as a renewable source means that it displaces the consumption of electricity that would have been produced by a non renewable source generator.

Owners of eligible systems can sell their STCs to partially offset the cost of installing this renewable energy technology.

Why is this scheme available?

The SRES, under the Renewable Energy (Electricity) Act 2000, places a legal responsibility on electricity retailers to proportionately contribute towards the generation of additional renewable electricity.

Power and Water will purchase STCs from people who have installed eligible renewable generators. This in turn help us meet our annual SRES liability, set by the Federal Government.

How do I sell my STCs?

Owners of eligible small generation units have two options for gaining a financial benefit for their STCs:

assigning the right to create STCs to an STC Agent, in exchange for a discount or delayed cash payment; or
selling the certificates themselves, either through the open STC market (Power and Water) or through the STC Clearing House.

If you wish to sell to Power and Water simply complete the photovoltaic or solar hot water small-scale renewable energy application form.

Power and Water recommends you contact several companies who trade in STCs before agreeing to a price. Please contact customer services for further information on Power and Water's current price for RECs.

Who is eligible for STCs?

To be eligible for this scheme, solar generators are required to be certified against the Australian Standard for design and manufacture.

When a customer installs a solar system they may be able to trade associated STCs with Power and Water. The amount of STCs will depend on the brand, type and size of the system installed.

Installing a solar system is also an environmental plus. By converting to solar you are helping to reduce greenhouse gas emissions by about three tonnes per year. That is the equivalent of taking a small car off the road for the same period.

How do I calculate the number of STCs?

The Federal Government has designed a Solar Water Heater STC Calculator and a Small Generation Unit STC Calculator (small-scale solar panel, wind and hydro systems) to assist you in determining the approximate number of STCs that may be created under SRES.

How do I assign STCs to Power and Water?

Once you have decided to go to solar, all you need do is see a solar system supplier and tell them you are assigning your STCs to Power and Water.

The supplier will then give you the information you need about the system you are buying and the number of eligible STCs.

Power and Water requires customers to attach a copy of the installation report to their application.

Power and Water aims to process applications within 21 days. Delays in processing may occur due to the Office of Renewable Energy Regulator (ORER) requesting a site audit or a query on model and installation type.

Claims must be made within 12 months of installation.

Is this revenue subject to GST?

Revenue from STCs is not taxable for domestic customers.

Commercial customers registered for GST and selling STCs will be subject to GST and must provide a compliant tax invoice with their photovoltaic or solar hot water small-scale renewable energy application form.

Please note that this is general information only and you should seek independent tax advice about your situation. Go to www.ato.gov.au for more information.

What is the price of STCs?

The price for STCs offered by Power and Water may vary.

Power and Water takes no responsibility for loss arising from the market variance in price offered for STCs.

Please contact customer services for further information on Power and Water's current price for STCs.

More information

Complete the photovoltaic or solar hot water small-scale renewable energy application form once your new system is installed.

You can submit the form at any Power and Water customer service centre or fax 08 8923 9545.

For more information go to:

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