RECs
Renewable Energy Credits
Renewable Energy Certificates (RECs) are a financial instrument designed to increase the proportion of electricity generated from renewable sources and to make renewable energy more cost competitive with fossil fuel electricity generation. RECs can be thought of as the ‘green' component of the energy produced by renewable generators. Some companies such as electricity generators are required to surrender a certain number of RECs based each year under the Mandatory Renewable Energy Target (MRET). Most of these come from wind farms which sell the electricity they produce as well as the RECs. The RECs provide them with an additional income stream that helps make the wind farm viable.
Small scale systems are also eligible and can ‘deem' up to 15 years worth of RECs up front. A fundamental difference between a wind farm and a residential solar power system however is that while the wind farm exports virtually all of its generated electricity and is happy to sell the ‘green' component of it, a residential solar power system owner generally wants to use the ‘green' electricity themselves. Selling the RECs would mean that someone else is using the ‘green' part of their electricity, effectively meaning that despite having a solar power system on their roof, the owner is still coal powered. This is simply because two parties can not both claim the rights to the ‘green' component of a solar power system – this would be double counting.
Solar Horizon's philosophy towards RECs is to inform our customers of what RECs are and the implications of selling them and to then let our customers decide what course of action they wish to take.
Solar Horizon can facilitate the sale of your RECs to a registered REC agent. Since they are a traded commodity rather than a rebate the value changes over time. Currently a solar PV customer could expect to receive around $850 per kilowatt for their RECs.