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What is the SRES/LRET charge that is displayed on some electricity bills and what can you do about it?

This charge represents the cost that electricity retailers may choose to pass on to consumers, to offset the cost of complying with their obligations under the Federal Government’s Small-scale Renewable Energy Scheme (SRES) and Large-scale Renewable Energy Target (LRET).

What is the LRET and SRES?

The Small-scale Renewable Energy Scheme and Large-scale Renewable Energy Target are part of the Renewable Energy Target (RET). The RET is designed to deliver on the Government’s commitment that the equivalent of 20 per cent of Australia’s electricity will come from renewable sources by 2020.

The RET creates a guaranteed market for renewable energy deployment, using a mechanism of tradable certificates created by large-scale renewable energy generators and owners of small-scale solar panel, wind, and hydro systems.  

Demand for these certificates is created by placing a legal obligation on entities that buy wholesale electricity (mainly electricity retailers), to source and surrender certificates to the Clean Renewable Energy Regulator.

The certificates are created by:

• The installation of solar water heaters, solar panels and small-scale wind and hydro systems under the Small-scale Renewable Energy Scheme (SRES).  These are known as Small-scale Technology Certificates (STCs).
• Renewable energy power stations under the Large-scale Renewable Energy Target (LRET).  These are known as Large-scale Generation Certificates (LGCs).

Certificates are traded directly between power stations, RET liable entities, small-scale system owners, and other traders, through a self-regulated open market, where the daily price is set by market supply and demand.

STCs may also be traded for a Government-guaranteed $40/STC via the STC Clearing House, where they may take some time to clear.

As such, the Clean Energy Regulator does not set the price of certificates (unless they are purchased through the STC Clearing House), nor does the Clean Energy Regulator receive any money from certificate sale, purchase, or surrender. 

Why do electricity retailers add the cost of the SRES or LRET to your bill?

Electricity retailers may choose to recover the costs associated with sourcing and surrendering certificates by passing some or all of the cost on to their customers. The amount they pass on is determined internally by the retailer with approval by the electricity regulator in each State or Territory. The amount charged by retailers is neither set by, nor paid to, the Clean Energy Regulator.

The charge may appear as a separate item on an electricity bill, or it may be incorporated in the bill’s total.  How the charge is displayed is determined by the retailer.

What can you do about the charge? 

• Any questions about the charge and its itemisation on a bill should be directed to the relevant electricity retailer in the first instance. 
• If you believe the charge is in error after discussing it with your retailer, you may wish to contact the relevant department dealing Fair Trading or consumer affairs in your state or territory.
• If you are a business, it’s possible that you could purchase STCs and LGCs and transfer them to your retailer to reduce the SRES or LRET charge on your bill.  This will only occur if the retailer agrees to accept STCs and LGCs to reduce your bill.  You must contact your retailer to discuss this option. If your retailer agrees then you will need to create an account in the REC Registry where you can buy and trade STCs and LGCs.  Note the purchase price of STCs and LGCs is handled outside of the REC Registry like any other contract for services.  The REC Registry only provides the platform for which STCs and LGCs are created, registered, transferred and surrendered for voluntary or mandatory purposes.
  Visit  - Buying STCs
           Buying LGCs
• To learn more about the RET, and the basis on which the charges are being levied, please see “About the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES)".
• You may also visit the website of the Department of Climate change and Energy Efficiency, which provides policy support to the RET.