Australian REC and STC prices (Renewable Energy Certificates)

09/09/11

Origin, AGL and other electricity retailers and large electricity users operate under the RET (renewable energy target) scheme where they need to purchase a percentage of their electricity from renewable sources (actually there is a fixed industry wide target each year in GWh rather than a percentage).  1 REC/STC = 1MWh of renewable electricity.

Buying REC/STCs is the way they meet that obligation.  If they don't meet their obligation they need to pay a fine, equivalent to $40/REC (increased to $65 in 2010), but it's not tax deductible so the real value could theoretically be as high as $57 (increased to $93 in 2010), not counting the reputation cost of being fined.

Since January 2011 installing a PV Solar system, or Solar Hotwater system creates STCs (wind farms still create RECs and before 2011 so did installing PV Solar and Hotwater).  Our website talks about the various number of REC/STCs created for various sizes of systems, based on a 15 year period (15 year REC/STCs need to be created within 12 months of installation - see the ORER website for all the details on how to calculate them etc.). 

For a 1kW PV system in most eastern capital cities you get about 21 STCs, so when the REC/STC price was near $50, this was worth more than $1000.  Since January 2011, apart from being sold for a market price, there has also been a an STC Clearing House where theoretically one could sell their STCs for $40.  However in practice not many have been sold there as it's cheaper for the energy companies to buy them more cheaply in the market.  As of early September 2011 there is a backlog of 6.2 million STCs waiting for sale in the Clearing House.

Most people are happy to assign/sell their REC/STCs to lower their overall install price, but some people disagree.  You can find more information about REC/STCs here

Above is a graph with some historical Australian REC/STC prices based on information we have received over the last couple of years from various REC/STC brokers.  They are the price paid to assign a REC/STC to a broker.  REC/STC brokers take the assignments and then create and sell the REC/STCs for several dollars more.  We don't guarantee this graph is totally historically accurate, but you can see the price can vary quite a bit.  There may be a better graph here.

In September 2011, the REC price is hovering around $26, but can easily jump around by $4 or $5.  The REC multiplier dramatically increased the solar PV contribution to the supply of RECs.