Office of the Renewable Energy Regulator

Increasing Australia's renewable electricity generation

SGU Owners Guide

MRET process for Owners of Small Generation Units (SGUs)

Options for gaining financial benefits from your RECs

The Mandatory Renewable Energy Target (MRET) scheme does not provide a rebate. The purchase of a SGU may entitle you to renewable energy certificates (RECs) if your SGU is eligible. These certificates can then be sold and transferred to liable parties on a market based online system called the REC Registry.

For more information about MRET visit - MRET - the basics

There are two options for reimbursement of your RECs under the MRET scheme:

Option 1 - Agent Assisted
Find an agent and assign your RECs to the agent in exchange for a financial benefit which could be in the form of a delayed cash payment or upfront discount on your SGU. A majority of owners take this option.

Option 2 - Individual Trading
Create the RECs yourself. Sell and transfer them in the REC Registry.

RECs defined

The commodity in the REC market is the Renewable Energy Certificate (REC) - each REC represents the equivalent of 1 MWh of electricity generation from an eligible renewable energy source.

The number of RECs that a SGU is entitled to is calculated by determining the amount of electricity the SGU produces over a determined period (called a deeming period) given that the installation and ongoing use of the system will reduce demand on the electricity grid.

SGU process - Options for gaining financial benefits from your RECs

Diagram showing two options for the sgu process

Option 1 - Agent Assisted

A majority of owners of SGUs find it convenient to assign their rights to create RECs at the point of purchase to a registered agent. A registered agent will:

It is important to note that agents list different prices and payment processes for RECs. After buying the RECs from you the agent will register your RECs and usually bundle them with other small generation unit and solar water heater RECs for sale and transfer in the REC Registry.

Before entering into any contractual arrangement to assign your right to create RECs:

If you experience a delay in receiving payment for your RECs contact the agent you have agreed to sell them to.

Option 2 - Individual Trading

Step 1: Determine if your system is an SGU or power station

Compare your system's kW capacity against the following criteria to determine if your system is an SGU or power station

System type System capacity and annual electricity output Installation periods
Small wind turbines No more than 10 kW or a total annual electricity output less than 25 MWh On or after 1 April 2001
Solar (photovoltaic) systems No more than 100 kW and a total annual electricity output less than 250 MWh On or after 14 November 2005
Solar (photovoltaic)systems No more than 10 kW and a total annual electricity output less than 25 MWh Between 1 April 2001 and 13 November 2005
Hydroelectric systems No more than 6.4 kW and a total annual electricity output less than 25 MWh On or after 1 April 2001

If the kW rating or MWh generation for a SGU is above the respective thresholds or if the unit was installed prior to 1 April 2001, it is not eligible to have RECs created for it as a SGU. However, it may be eligible for accreditation as a renewable energy power station. Information on the power station accreditation process is available on the power stations page of the ORER website.

If your system meets the above eligibility criteria go to Step 2.

Step 2: Check if your SGU installation is within the time limit for creating RECs

Time limits for the creation of RECs for SGUs may apply depending on their installation date and SGU type. If the installation date and REC creation time limit for your SGU falls outside of the following thresholds your system is not eligible to create RECs.

SGU installation date Deeming period SGU type REC creation time limit
On or before 6 October 2007 1 or 5 years Wind, solar (photovoltaic), hydro Anytime after installation
On or after 6 October 2007 First deeming period (1 or 5 years) Wind, hydro Within 12 months of the installation date
On or after 6 October 2007 First deeming period (1, 5 or 15 years) Solar (photovoltaic) Within 12 months of the installation date

Step 3: Establish the deeming period for your SGU

If your SGU meets the eligibility requirements you can establish the deeming period for your SGU. RECs may be created for SGUs in batches, for either 1, 5 or 15 year deeming periods, depending on the particular installation. At the beginning of each subsequent deeming period, the Regulator must be satisfied that the SGU is still installed and is likely to remain functional for the next deeming period. The ORER may request evidence to support this claim.

RECs may be created for wind and hydro SGUs either:

RECs may be created for solar (photovoltaic) SGUs either:

Step 4: Determine how many RECs your SGU is entitled to

Different installations of SGUs are deemed to be eligible for different numbers of RECs based on their rated power output (kilowatt capacity) and their geographic location.

To determine the number of RECs for your system is entitled to see:

Step 5: Become a registered person in the online REC Registry

Once you know the number of RECs you are entitled to you will need to become a registered person in the REC Registry, an internet based registry system that:

A registered person can create, sell and transfer RECs in the REC Registry. To become a registered person in the REC Registry you will need to:

  1. Create an account on the REC Registry. See the Apply for an Account link on bottom right of the REC Registry home page.
    Visit - REC Registry
  2. Complete an Application for Registration and send it to the ORER.
    Visit - Application for Registration
  3. The ORER will notify you via phone when your Application for Registration has been approved and explain the REC Registry process.
  4. Pay a $20 registration fee to complete the registration process.
    Please DO NOT send any payment to the ORER with this application form - payment of the $20 registration fee is made via your account in the REC Registry. The application fee is GST exempt.

Step 6: Create RECs through the REC Registry

Once your application has been approved you are ready to complete the registration process online and create RECs for your SGU installation.

Visit - REC Registry

The main details required to create RECs include the following:

The REC registry contains online help screens and a REC Registry Support Desk to assist in the use of the Registry.

Step 7: Wait while your RECs are validated

Once you have created your RECs, they will be audited by an ORER officer to ensure they have been created correctly. This can take up to 4 weeks. When your RECs have passed the ORER audit, they will become 'Registered'. Registered RECs are able to be sold and transferred in the REC Registry, and surrendered either voluntarily or meet a liability under the Renewable Energy Electricity (Act) 2000.

Visit - REC Registry

Step 8: Find a buyer for your RECs. Sell your RECs and transfer them in the REC Registry

If you wish to sell your RECs, it is your responsibility to find a buyer and negotiate the price and other terms of sale. Potential buyers may include:

Price and payment date should be key considerations when negotiating the sale of your RECs. You should ensure that:

Once you have found a buyer and negotiated the terms of sale, you will need to transfer the RECs to the buyer through the REC Registry and arrange payment outside the REC Registry. The ORER does not set the price of RECs nor does it get involved in disputes between buyers and sellers. Payment for RECs or the rights to create RECs is a contractual matter between the buyer and seller.

Other Government schemes involving SGUs

Some installations of SGU may be eligible for rebates through other Federal Government schemes - refer to the rebates page of the Department of the Environment, Water, Heritage and the Arts website for details.
Visit - Department of Environment, Water, Heritage and the Arts Rebates 

Some SGUs may be eligible for other State/Territory Government rebates. Please check the relevant State/Territory Government websites for details.

REC Calculation

Calculating RECs for small hydroelectric systems and small wind turbines

The number of RECs that you are eligible to create for your small hydroelectric system or wind turbine is determined by the rated capacity of the system and the number of hours the system can operate at that capacity (resource availability).

To establish how many RECs you may be eligible to create from your system you should undertake the following steps:

  1. Establish your resource availability. If you do not know the actual resource availability, then you must claim for the default amount, which is:
    • Hydroelectric - 4000 hours/year
    • Wind - 2000 hours/year
    If you claim for resource availability above the default amount, then you must provide and retain copies of site-specific audit reports and advise the ORER of the name and contact details of the person or company that conducted the audit.
  2. Establish the rated output of your system in kilowatts (kW). You can find the rated power output of your system in the specifications provided by the system manufacturer. Please ensure that you use the exact figure that applies to your particular make and model.
  3. To calculate the annual number of RECs your system is eligible for you multiply the rated power output (in kW) of your system by 0.00095, multiplied by the resource availability of your system (eg. 8kW x 0.00095 x 4000 (or 2000 for wind) hours/year).
    0.00095
    		 X
    The rated power
    output (in kW) of
    your system
    		 X
    Resource
    availability of the
    system (hours
    per annum)
    		 =
    Annual number of
    eligible RECs
  4. If you calculate that you are entitled to more than 25 RECs per year your system is classified as a potential power station and you must apply to the ORER to become an accredited power station by filling out the application for accreditation of a power station form. If your system is classified as a power station, you cannot assign RECs to an agent.
  5. You have the option of claiming RECs in regular one-year or five-year periods (deeming periods). Multiply the annual number of eligible RECs by one year or five years depending on the period over which you wish to create RECs.
  6. If your calculated number of eligible RECs, over a one-year or five-year period, is:
    1. greater than 1 MWh you must round down the calculated number to the nearest whole number of RECs.
    2. between 0.5 MWh and 1 MWh you are allowed to round up the calculated decimal number to 1 REC.

Calculating RECs for small solar (photovoltaic) systems

Once you have established that a small solar (photovoltaic) system meets the above eligibility requirements, to calculate how many certificates that may be created for it:

  1. Establish your Zone by using Table 2, Ratings and Postcode Zones for Small Solar (Photovoltaic) Systems.
  2. Once you have established your Zone, look up the corresponding Zone Rating in Table 3, Zone ratings for solar (photovoltaic) Systems.
  3. To calculate your system's annual REC entitlement, multiply the Zone Rating by your SGU's rated power output (in kW). You can find the rated power output of your unit in the specifications provided by the manufacturer - please ensure that you use the exact figure that applies to your particular model.
    Zone
    Rating
    		 X
    Rated power output
    (kW) of your solar
    (photovoltaic)
    System
    		 =
    Annual REC
    entitlement
    If you calculate that you are entitled to less than or equal to 250 RECs per year, proceed to step 4. If you calculate that you are entitled to more than 250 RECs per year your system is classified as a potential photovoltaic power station and in order to create RECs you must apply to the ORER to become an accredited power station by filling out the application for accreditation of a power station form. A registered person with an accredited power station can create RECs for eligible electricity generated above the power station's baseline. REC creation for power stations cannot be assigned to an agent.
  4. Choose the deeming period you for which you would like to create RECs: 1-year, 5-years or 15-years, as described in the 'Deeming Periods' section above. (Step 2 and 3) Calculate the REC entitlement for each deeming period by multiplying the Annual REC Entitlement (as calculated in step 3) by the number of years in the deeming period you choose, either 1, 5 or 15.
  5. If your calculated REC entitlement, over a one-year or five-year period, is not a whole number and is:
    1. greater than 1 MWh you must round down the calculated number to the nearest whole number of RECs.
    2. between 0.5 MWh and 1 MWh you are allowed to round up the calculated decimal number to 1 REC.

Table 2

Ratings and Postcode Zones for Small Solar (Photovoltaic) Systems

Postcode range Postcode range Postcode range Postcode range
from to zone from to Zone from to zone from to zone
0 799 3 2900 2999 3 4474 4476 1 6251 6254 3
800 869 2 3000 3390 4 4477 4478 2 6255 6270 4
870 879 1 3391 3398 3 4479 4485 1 6271 6315 3
880 1000 2 3399 3413 4 4486 4490 2 6316 6357 4
1001 2356 3 3414 3426 3 4491 4492 1 6358 6393 3
2357 2357 2 3427 3474 4 4493 4499 2 6394 6400 4
2358 2384 3 3475 3514 3 4500 4721 3 6401 6430 3
2385 2393 2 3515 3516 4 4722 4722 2 6431 6431 2
2394 2395 3 3517 3520 3 4723 4723 3 6432 6433 3
2396 2398 2 3521 3524 4 4724 4735 2 6434 6439 2
2399 2399 3 3525 3538 3 4736 4736 1 6440 6441 1
2400 2400 2 3539 3539 4 4737 4824 3 6442 6444 3
2401 2404 3 3540 3549 3 4825 4827 2 6445 6459 4
2405 2407 2 3550 3560 4 4828 4828 3 6460 6467 3
2408 2410 3 3561 3569 3 4829 4829 2 6468 6469 2
2411 2414 2 3570 3570 4 4830 5261 3 6470 6471 3
2415 2536 3 3571 3606 3 5262 5263 4 6472 6474 2
2537 2537 4 3607 3617 4 5264 5270 3 6475 6506 3
2538 2544 3 3618 3622 3 5271 5300 4 6507 6555 2
2545 2557 4 3623 3628 4 5301 5429 3 6556 6573 3
2558 2626 3 3629 3657 3 5430 5450 2 6574 6602 2
2627 2629 4 3658 3684 4 5451 5653 3 6603 6607 3
2630 2630 3 3685 3687 3 5654 5669 2 6608 6641 2
2631 2639 4 3688 3724 4 5670 5679 3 6642 6724 1
2640 2820 3 3725 3731 3 5680 5699 2 6725 6750 2
2821 2842 2 3732 3999 4 5700 5709 3 6751 6797 1
2843 2872 3 4000 4416 3 5710 5722 2 6798 6799 2
2873 2874 2 4417 4417 2 5723 5724 1 6800 6999 3
2875 2876 3 4418 4422 3 5725 5733 2 7000 8999 4
2877 2889 2 4423 4423 2 5734 5799 1 9000 9999 3
2890 2897 3 4424 4426 3 5800 6243 3 - - -
2898 2899 4 4427 4473 2 6244 6250 4 - - -

Table 3

Zone Ratings for Solar (Photovoltaic) Systems

Zone Rating
1 1.622
2 1.536
3 1.382
4 1.185

REC calculation examples

Example 1 - Small Solar Photovoltaic Systems

If you wish to create RECs for a 15-year deeming period for a small solar panel (photovoltaic) system installed by a BCSE – accredited installer on 9 March 2009 in the postcode area of 2315, which has a rated power output of 73.8 kW. To determine eligibility:

The system meets all of the eligibility requirements, so we can now proceed to calculate the number of RECs it is entitled to create.

  1. Look up the postcode in Table 2 to establish your Postcode Zone: 3
  2. Look up the Postcode Zone in Table 3 to establish your Zone Rating: 1.382
  3. Multiply your Zone Rating by the kW capacity to get the annual REC entitlement:
    1.382 x 73.8kW = 101.9916 MWh
  4. Multiple by 15 years to get the total REC entitlement:
    101.9916 x 15 years = 1529.874 MWh
  5. Round down the total amount of electricity taken to be generated to the last whole MWh to determine the number of RECs you are eligible to create:
    1529.874 MWh = 1529 RECs
  6. This system is rated at less than 100 kW and has a total annual output of less than 250 MWh per year, it does not need to be accredited as a power station.

Example 2 - Small Wind Turbines

If you wished to create RECs on a 5-year basis for a system that has a rating of 2.9 kW and a wind resource availability of 3,600 hours, you must:

  1. Multiply 0.00095 by the kW capacity and the wind resource availability:
    0.00095 x 2.9 x 3600 = 9.918 MWh
  2. Multiply the annual electricity output by the number of years:
    9.918 x 5 = 49.59 MWh
  3. Round down the total electricity output to the last whole MWh to determine the number of RECs you are eligible to create:
    49.59 = 49 RECs
  4. As a wind resource availability in excess of the default amount has been claimed you must provide and retain copies of a site-specific audit report to support your claim. If you cannot provide such a report then you may only claim for the default amount.
  5. This wind turbine has a total annual output of less than 25 MWh, it does not need to be accredited as a power station.

 

Fact sheet

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