Solar Hot Water - Rebates and RECs
Renewable Energy Certificates (RECs)
RECs are electronic certificates, created when an eligible hot-water system is installed. They're traded in a market and are ultimately bought by energy companies, as they count towards the company's compliance with government targets for renewable energy generation.
Each REC represents one megawatt hour of renewable electricity generated; for solar and heat pump hot-water systems, this is equivalent to removing one megawatt hour of generation from non-renewable (such as coal-burning) power stations.
To qualify for RECs, solar and heat pump hot-water systems are tested and certified according to Australian standards and listed on a register. The more efficient the system, the more RECs it creates. The most efficient systems qualify for about 30 RECs or more.
The $$ value of RECs
When you buy and install an eligible system, you have the option of keeping and trading the RECs, but most suppliers offer to buy them from you when the system is installed, providing a kind of discount. This is usually the easiest way to benefit from RECs, but it means you sell them at whatever value applies in the market at that time.
If you decide to keep the RECs to trade later, make sure you get documentation from the supplier stating that the ownership of the RECs has been passed to you. When you come to trade them you may find you need to sell them through an agent, who'll take a commission, possibly wiping out any benefit from higher prices.
RECs vary in value from week to week; at the time of writing the price was about $40 to $50 per REC, meaning you'd get $1200 to $1500 for installing a system eligible for 30 RECs.
As in any market, it's hard to predict long-term price movements. As energy companies start to meet their renewable energy targets by building wind farms, they'll need to buy fewer RECs. But on the other hand, the Federal Government might set tougher targets in future, increasing the demand for RECs. For the average consumer, it's probably best to work out a deal with your supplier at the time of installation and think of it as a discount.
You can subscribe to a weekly bulletin of RECs prices at the Australian Financial Markets Association website. For more details about RECs, also see the Office of the Renewable Energy Regulator website.
Rebates
All our Solar Hot Water products qualify for RECs.
Victoria offers rebates from $900 to $1500 for installations that don't qualify for the federal rebate, such as replacing a gas system with a gas-boosted solar system; there is also a rebate of up to $2500 to help rural and regional Victorian households switch to solar hot-water systems. In WA, rebates of $500 or $700 apply when installing a gas-boosted solar hot-water heater. Further conditions apply to all these rebates; contact your state government for details.
A rebate of $1600 applies for systems installed from 3 February 2009 that replace an electric hot-water system.
For solar hot-water systems installed before that date, the old rebate of $1000 might still be available. Conditions apply to these rebates; see www.environment.gov.au/rebates.
