The Australian Government set the Mandatory Renewable Energy Target (MRET) at 2% in 2001
This legislation has now been superceded by the Renewable Energy Target (RET). The expanded Renewable Energy Target (RET) scheme has been established to encourage additional generation of electricity from renewable energy sources to meet the Government’s commitment to achieving a 20% share of renewables in Australia’s electricity supply in 2020, i.e. 45,000 gigawatt hours of renewable energy.
To download a fact-sheet on RET click here PDF Fact Sheet 460kb

RECs are created with the installation of a new solar hot water system, one REC being equal to one megawatt hour of electricity saved. The Renewable Energy (Electricity) Act 2000 allows for RECs to be exchanged for cash at their value according to market conditions. More info about this can be found here.

The amount of RECs attributed to each solar hot water system is based on its performance and is determined by a Government approved testing process.

Power producers purchase RECs at a price determined by availability and necessity.
• If there is an abundance of RECs in the market-place then the amount offered may be lower than if there is a shortage.
• A big buy-up of RECs by power producers at the end of a financial year may be followed by a lack of demand.
• A need to meet the RET (Renewable Energy Target) at certain times of the year may lead to increased demand and therefore increased value.

To download a NSW Government fact-sheet on RECs click here PDF Fact Sheet 146kb

Above is an graph showing the range of price fluctuations in RECs prices