Renewable Energy Scheme

To help meet its goals to reduce carbon emissions and encourage investment in renewable energies, Australia has developed the Renewable Energy Target– a scheme to offer incentives to those individuals and businesses who invest in renewable (electrical) energy sources. The Renewable Energy Target works by allowing both energy certificates to be created for both large-scale power stations and small-scale renewable energy systems. Retailers are then able to purchase these certificates from the consumers of the energy systems and submit them to the Clean Energy Regulator in order to meet the retailers’ obligation to the Renewable Energy Target.

A Plan to Meet Renewable Energy Goals

In 2001 the Mandatory Renewable Energy Target was developed with the goal of receiving two percent of Australia’s electricity from renewable sources to reduce the country’s greenhouse emissions. Later renamed the Renewable Energy Target, the aim rose to include providing 20 percent of Australia’s electricity from renewable resources.

The Renewable Energy Target has two schemes which are overseen by the Clean Energy Regulator. They make provisions for creating incentives for both large-scale and small-scale renewable energy production.

  • Large-Scale Renewable Energy Target– This includes power stations. Their goals is to generate an additional 33,000 gigawatt hours of renewable energy by 2020.
  • Small-Scale Renewable Energy Target– This is aimed at smaller energy systems like those installed in private households. This may include roof-top solar panels and solar hot water systems.
  • The hope is that the large-scale scale systems will provide most of the renewable energy target by 2020 while the small-scale energy scheme will help to support the larger goal.

Large-Scale Renewable Energy Target

The Large-Scale Renewable Energy Target is a program that provides a funds for the creation of power stations that run on renewable energy. Renewable energy power stations provide electricity to a population generated from resources such as solar and wind farms and hydro-electric power stations. These incentives are administered through the creation of large-scale generation certificates.

Certificates are awarded based on the amount of renewable electricity a power station generates. These certificates can then be traded or sold to Renewable Energy Target liable entities. This income is in addition to the electricity that is sold to the grid. Liable entities are legally obligated to buy and surrender large-scale generation certificates. They must surrender their certificates annually.

In order to be eligible to receive large-scale generation certificates, the power station in question must generate power from a renewable source such as solar, wind or hydro power. Electricity generated from fossil fuels or the waste products produced by fossil fuels is ineligible.

Small-Scale Renewable Energy Target

The Small-Scale Renewable Energy Scheme provides individuals and small business owners financial assistance in the form of small-scale technology certificates for purchasing small-scale renewable energy systems. Certificates are awarded to individuals and small businesses that install eligible energy systems such as solar panel systems or geothermal air pumps at their home or business. This may also include solar hot water systems and small-scale wind power systems. These certificates can then be sold to Renewable Energy Target liable entities which, in turn, surrender them to the Clean Energy Regulator quarterly.

Small-scale technology certificates are given based on the amount of electricity a system generates or displaces. Certificates are awarded only after installation of an eligible system has taken place. These certificates can be used to offset a portion of the purchase or installation price.

Feed-In Tariffs

In addition to the small-scale technology certificate offered by the Renewable Energy Target, individuals and small businesses that install small-scale energy systems may also receive a feed-in tariff. A feed-in tariff is what you can earn from the extra electricity you generate that can be fed into the grid.

To find out if you are eligible, contact your local government or energy retailer. If you are eligible to receive the feed-in tariff, they can help you to apply.

Who Purchases Large Scale and Small-Scale Certificates?

There are certain industry groups that are required by law to surrender large-scale and small-scale certificates to offset the production of emissions-producing electricity and meet compliance obligations. These groups are comprised of the following:

  • Liable Entities
  • Power Stations
  • Agents and Installers
  • Manufacturers
  • Industry Assistance
  • Individuals and Small Businesses
  • How to Choose a System

Because the Renewable Energy Target schemes are making it easier for individuals and small businesses to purchase solar panel systems, many home and small business owners are considering making the switch to renewable energy. For those considering purchasing a photovoltaic system, here are a few things to consider.

How much electricity does your home or small business use? The Australian Energy Regulator has an online calculator to help you figure it out.
The system you choose will be determined by a variety of factors such as where you are located, what the weather is like, the amount of sun exposure available to you and how much money you can afford to spend.
In order to be eligible for the small-scale technology credit, both the system you choose and the installer must meet all of the requirements set forth by the Small-Scale Renewable Energy Scheme.
You may assign the right to create your small-scale technology certificates to a registered agent to offset the cost of your system or installation. Registered agents may include retailers, installers and traders of small-scale systems. While the Clean Energy Regulator does not endorse any agent, it does keep a list of registered agents.
Once you have determined your energy needs and found a system that meets the requirements set forth by the Small-Scale Renewable Energy Scheme, you will be ready to have it installed by an eligible technician.

Whether you are part of a large-scale renewable energy power station or are a home or small business owner doing your part to reduce greenhouse gas emissions, it is important to understand Australia’s Renewable Energy Schemes. They can help you to offset the costs associated with the purchase of your system and can even help you to earn money by producing energy for the grid. Ultimately, they can help you participate in Australia’s larger goals to reduce greenhouse gas emissions and create a more sustainable future.