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The Commonwealth Government issues Renewable Energy Certificates (RECs) as part of its Renewable Energy Target (RET) policy.

RECs are a financial tool to facilitate an increased uptake of renewable energy by making it more cost competitive with fossil fuel power generation.

RECs also play a part in boosting the amount of renewable energy produced by electricity generators and retailers to meet their required targets under the RET.

RECs are split into two categories: Small-scale Technology Certificates (STCs) and Large-scale Generation Certificates (LGCs).

STCs apply to domestic and commercial solar photovoltaic (PV) arrays under 100kW, while industrial and utility-scale PV systems or wind farms over 100kW qualify for LGCs.

On top of that, there are different Feed-In Tariff Schemes in Australia which may entitle you to a credit for selling solar energy back to the grid.

Small-Scale Technology Certificates (STCs)

Currently, the Government is helping with the purchase of solar systems by offering an upfront cash rebate which is usually paid to the installer of the solar energy system. STCs are openly traded for a value that fluctuates from day to day. For a 5kW system, you will receive 103 STCs which are currently traded around $38 each, offering an upfront discount of $3,708.

In the past, the number of STCs available would have been around 300 and traded at $36 each meant you would have received a rebate of $10,800. Over the years as the price of solar panels has fallen and so has the rebate. On average, the value of these solar rebates covers around 20-30% of the total system cost.

Industry experts are suggesting that because the cost of solar panels has come down so much, with 5kW systems now available anywhere from $7000 (very low-quality equipment!), they no longer need to offer upfront discounts to stimulate the purchase of these solar panel systems. If people were happy to pay $15,000 for a 5kW system two years ago, then why wouldn’t they pay $10,000 now, with or without the rebate, and coupled with naturally increasing electricity costs.

Other opinions suggest that an ax in this government rebate would provide the necessary funds to continue to finance the 8c and the 44c solar feed-in tariff rebates.

Large-Scale Generation Certificates (LGCs)

GEM Energy is experienced in generating and redeeming LGCs for our clients. As LGCs are not an upfront cash benefit, the process is a little more involved than with STCs, however, in return LGCs provide an excellent secondary income stream for owners of solar systems over 100kW in size.

How does this work?

GEM Energy registers your Solar PV plant with the Commonwealth Government’s Clean Energy Regulator and fits the required hardware such as utility-grade electricity generation metering as well as systems to monitor, collect and store data.

Now GEM Energy begins to generate LGCs on your behalf – one megawatt-hour of electricity corresponds to one LGC. LGCs are accounted for on an annual basis when they are sold to ‘Liable Entities’ by GEM Energy, with their value then transferred back to you. This is what gives you the extra income on top of the electricity value generated by your Solar PV plant.

While the price of STCs has been inconsistent, LGCs have enjoyed a very stable value over time, making them a great investment.

Feed-In Tariff Rebates

Wherever you are in Australia, you will usually be entitled to a credit for selling energy back to the grid, which occurs on the days when you are producing more solar energy than your house is using. For example, you may have a pool and fridge running, using a total of 2kWh of electricity per hour through the daylight hours which is drawing from the grid.

Under a ‘Net Metered’ feed-in tariff scheme, any solar system installed by GEM Energy Australia will take over running your appliances. If you have a 5kW system installed, it will produce more than the 2kWh demand in the middle of the day when it starts to perform at its best, and the remaining excess solar generation will go back to the grid.

You will receive a credit from the power company for that excess solar which is usually around 6c per kWh in all states apart from the NT where it is 1-1, so you sell one kWh for the same value as you currently buy it.

Current Feed-In Tariff Rebate Schemes

This information is provided by the Queensland Competition Authority, on behalf of the Government and Ergon Energy.

44c Tariff

Those customers on the 44c tariff will remain unaffected and continue to receive 44c per kWh for grid export until 2028. Some of the new solar customers will wonder why their tariff is being changed and the 44c tariff is continuing. It is important to remember that some of these people will have paid up to $30,000 for a 5kW system and it is vital that a rebate remains in place for them to recover these costs. The cost of solar 3 – 4 years ago was substantially higher than it is now.

8c Tariff

South East QLD : You may have seen changes to this scheme on the news. If you live in South East QLD, you will be affected more than those on the Ergon network. Instead of the government paying 8c and your retailer a top-up of up to 8c with AGL and Origin etc. you will only receive an amount set by the retailer. AGL currently offers 8c per kWh, Origin 6c and so on. You might expect some fierce competition here as retailers will want to win your business by offering higher tariffs.

Ergon Energy Network : The Ergon Energy network currently offers a rate of rate of 7.448c per kWh for all energy exported into the network up to a maximum of a 5kW inverter. If you have 6kW of solar panels on a 5kW inverter which is very common, you will be eligible for the feed-in tariff. On a single phase, any system up to 3.5kW in size will automatically be approved to export into the network. Anything above 3.5kW will need to be technically assessed to ensure it can be safely connected to the distribution network.