Solar hot water system incentives: Renewable Energy Certificates (RECs)
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What are REC's and how do they work to give you money back for using sustainable methods for heating water?
The Federal Government put the REC system in place to help increase the amount of electricity that’s generated from renewable energy sources in normal people's homes.
How do RECs work?
The credits that you get represent a saving of one MW of electricityover a span of a decade(which would otherwise be generated by non renewable sources such as fossil fuels). Like a share on the stock exchange, the value of a REC fluctuates and is sensitive to market changes.
Earn RECs by using sustainable ways to heat water and generate power
If you own a solar hot water system or a heat pump water heating system then you may be able to earn RECs, so long as your system is used as an alternative to using electricity from the National Grid to heat water in your home.
Sell or trade RECs to make cash
Once you’ve generated some RECs then you can trade or sell these or even buy some more. These then offset the cost of buying a solar or heat pump hot water system, making them more accessible for the average homeowner and thus encouraging people to invest in new renewable energy technology.
The number of RECs awarded and the cost of them fluctuates depending on several factors - mainly the climate zone that you live in and how effective your systems are. So the more electricity your system generates the more RECs you’ll be awarded.
You can create and trade these certificates on your own if you like, but you'll also find that it's more common for Registered Agents to do this on your behalf. Usually, the RECs that are generated by the system you purchase are given to you in the form of a discount at the point where you buy the system based on how much each of those RECs are worth at today's prices. The upfront cost of the hot water system is less, but you may find that the value of the RECs increases over time.
In order to be considered eligible to claim REC rebates you must meet certain criteria, however both entirely new systems and replacement systems can be considered under this scheme.
The criteria for claiming RECs
- The system which you want to claim for must be a complete model. A full list of those that qualify can be found on the “Register of Solar Hot Water Heaters”. A complete list of these can be found on the ORER websitewhere you can also find out which zone you live in (affects how many REC's you'll get).
- You need to make your claim within 12 months of installing the new system
- You must have owned the system at the time it was installed in order to make a successful claim.
If you want to make a claim for an REC then you can download the form here.
Investing in Solar makes financial sense
Solar power is one of the best investments that you can make today - so post your job today and talk to a Solar professional about your options and your budget.
Incentives for solar PV systems
Incentives are not just for solar hot water systems - there is also investment and support in solar PV systems in the form of feed-in tariffs that are also structured at a state level.
- More about state level feed-in tariffs
- The difference between Solar Hot Water Systems and Solar PV Systems
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