Solar Water Heater (SWH) Owners Guide
MRET process for owners of SWH and air-sourced pump water heaters
Options for gaining financial benefits from your RECs
The Mandatory Renewable Energy Target (MRET) scheme does not provide a rebate. The purchase of a solar water heater (SWH) or air-sourced heat pump water heaters may entitle you to renewable energy certificates (RECs) if your SWH is eligible. These certificates are then 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
- You must be the owner of the system at the time it is installed to be entitled to assign or create RECs. In some circumstances where the SWHs are installed in new buildings, this can be the builder or property developer.
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 SWH. 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 a solar water heater is entitled to is calculated by determining the amount of electricity the SWH displaces 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.
SWH Process - Options for gaining financial benefits from your RECs
Option 1 - Agent Assisted
A majority of owners of solar hot water heaters find it convenient to assign their rights to create RECs at the point of purchase to a registered agent. A registered agent will:
- Determine whether your SWH is eligible for the MRET
- Determine for you how many RECs you are entitled to under the MRET scheme
- Offer a financial benefit to you. This may be in the form of a cash payment or discount on your SWH.
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 SWH and small generation unit (SGU) RECs for sale and transfer in the REC Registry
- The ORER recommends contacting a range of agents before entering into any contractual agreement.
Visit - List of registered agents
Before entering into any contractual arrangement to assign your right to create RECs:
- Make sure you are satisfied with the financial benefit and date of payment the agent is offering for your RECs.
- Check that details are recorded in writing through a REC assignment form that should be provided by your agent.
If you experience a delay in receiving payment for your RECs or your right to create RECs please contact the agent you have agreed to sell them to.
- 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.
Option 2 - Individual Trading
- As this process is complex a majority of owners assign their RECs to an agent. For information on how to engage an agent see - Option 1: Agent Assisted
Step 1: Determine if your new SWH is eligible
- Find your model on the Register of solar water heaters
Visit - Register of solar water heaters - Check if your model has been installed within the eligibility period for the particular model on the Register of solar water heaters. RECs may only be created within 12 months of the installation date.
SWHs installed on or after 6 October 2007 have a 60-day installation period, ie. The SWH must be completely installed within 60 days from date the first component of the SWH was installed. The installation date is taken to be the day the heater is first able to produce and deliver hot water heated by solar energy. - If your SWH installation meets the above eligibility requirements you are entitled to create RECs. This is regardless of whether the SWH:
- is installed in a new building or an existing building
- replaces, or is additional to, any type of existing water heater.
Step 2: Determine how many RECs your SWH model is entitled to
The number of RECs an eligible installation is entitled to create depends on the following:
- the brand and model of SWH
- its installation date
- the postcode zone in which it is located
The steps to take to determine your RECs once you have this information are:
- Determine your postcode zone by viewing the postcode zones for SWHs document Visit - Postcode zones for solar water heaters
- Download the appropriate Register of solar water heaters spreadsheet Visit - Register of solar water heaters
- Locate the entry/entries for your SWH model.
- Check that the installation date is in an eligible installation period. RECs can only be created within 12 months of the installation date.
- Match the postcode zone to your model. The number of RECs you are entitled to will be listed in the column underneath your postcode zone.
- RECs can only be created once for a SWH and are calculated for the life of the system which is deemed to be 10 years.
Step 3: 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:
- maintains various registers (as set in the Act)
- facilitates the creation, registration, transfer and surrender of RECs
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:
- 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 - Complete an Application for Registration and send it to the ORER.
Visit - Application for Registration - The ORER will notify you via phone when your Application for Registration has been approved and explain the REC Registry process.
- 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 4: 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 SWH installation.
Visit - REC Registry
The main details required to create RECs include the following:
- exact brand and model of SWH
- tank serial number
- number of panels
- installation date
- installation address
- installer's details
- owner's details
The REC registry contains online help screens and a REC Registry Support Desk to assist in the use of the Registry.
Step 5: 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 may 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 6: Find a buyer for your RECs. Sell your RECs and transfer them in the REC Registry
- You do not have to sell your RECs at all, but if you wish to create RECs for your SWH installation you must create them within 12 months of the date of installation of the system.
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:
- large electricity retailers who may need to purchase RECs to meet their REC liability
- registered agents for deemed units, who create and trade RECs from SWHs
- traders of RECs
Price and payment date should be key considerations when negotiating the sale of your RECs. You should ensure that:
- you are satisfied with the financial benefit and date of payment the agent is offering for your RECs.
- details are recorded in writing before entering any contractual arrangement to sell your RECs.
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 SWHs
Some installations of SWH may be eligible for rebates through other Government schemes. For federal rebates 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
State Governments may offer rebates/incentives for SWH installation. Contact your State Government for more information
