solar panels

The Small-scale Renewable Energy Scheme

The Small-scale Renewable Energy Scheme creates a financial incentive for owners to install eligible small-scale installations such as solar water heaters, air source heat pumps, solar panel systems, small-scale wind systems, or small-scale hydro systems. It does this through the creation of small-scale technology certificates (STCs)—which Renewable Energy Target liable entities have a legal obligation to buy and surrender to the Clean Energy Regulator on an quarterly basis.

STCs can be created following the installation of an eligible system, and are calculated by the amount of electricity they produce or displace.


How demand for certificates is created

The SRES places a legal liability on RET liable entities to purchase an amount of STCs each year.

The amount of STCs to be purchased is determined by the small-scale technology percentage (STP), which is set annually in the Regulations.

The STP is calculated on the estimated:

  • value, in megawatt hours, of small-scale technology certificates that will be created for the year
  • amount of electricity that will be acquired by RET liable entities for the year, and
  • the amount of all partial exemptions expected to be claimed for the year.

RET liable entities apply the annual STP to the total megawatt hours of electricity that they acquire from electricity grids. This determines how many STCs they will need to purchase for each quarter of that year.

The Clean Energy Regulator also provides RET liable entities with an estimate of how many STCs they must surrender in a calendar year.

A RET liable entity may purchase the required number of certificates through the open certificate market or the STC clearing house.

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Certificate surrender

RET liable entities must surrender the STCs to the Clean Energy Regulator that they have purchased during the year to prove they have met their obligations under the scheme.

When STCs are surrendered, they are marked as invalid in the REC Registry, and can no longer be sold, traded, or purchased.

RET liable entities are required to surrender STCs in April, July, October and February of each calendar year, to meet their obligations under the scheme

If a RET liable entity does not surrender its required number of STCs in a quarter, a shortfall charge will be applied to all STCs not surrendered. The shortfall charge is currently set at $65 per STC.

Any person with STCs registered in their REC Registry account may also voluntarily surrender their STCs at any time. This includes; owners, Agents, and RET liable entities.

RET liable entities may choose to voluntarily surrender STCs. This surrender is not related to their mandatory liability under the scheme. The voluntary surrender option creates demand in the market for renewable energy, in addition to the requirements set out in the legislation.

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System eligibility

Solar water heater or air source heat pump installations are eligible if the system is new and listed in the Register of solar water heaters managed by the Clean Energy Regulator.

Small-scale solar, wind and hydro systems are eligible if:

Documentation for small-scale systems—to demonstrate your compliance you must retain copies of documentation completed and signed by the owner, installer, and/or Registered Agent (as appropriate), and be able to produce it if requested by the Clean Energy Regulator.

A registered agent is eligible to create STCs if the owner has correctly assigned the right to create the certificates to them and signed documentation can be provided to the Clean Energy Regulator.

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For more information please see the following publications:

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Date last updated: 07 Oct 2014